BHP to Shutter Coal Mine, Cut 750 Jobs Due to High Royalties, Low Prices — Update

By Rhiannon Hoyle

BHP Group will shutter one of the coal mines it runs in Australia with Japan's Mitsubishi Corp. and lay off roughly 750 workers, in response to soft coal prices and high royalty rates in Queensland state.

BHP, the world's largest miner by market value, said Wednesday that it will from November suspend the Saraji South mine, part of the Saraji Mine Complex run by BHP Mitsubishi Alliance. The BMA joint venture is Australia's largest exporter of steelmaking coal, which the companies ship mostly to mills across Asia.

BHP said it will also conduct a strategic review of the BHP FutureFit Academy in the city of Mackay, putting a cloud over one of its major training centers for people seeking to work in the mining industry.

Officials in Queensland sharply increased royalty rates on coal profits in 2022, saying they were trying to ensure maximum benefit from their resources. Queensland's royalty rates are the highest in the world, said BHP.

The company said that it is unsustainable for BMA to keep mining lower-margin areas of its pits under current conditions. In fiscal 2025, BMA had an effective tax and royalty rate of 67%. Royalties and other government payments cost BMA roughly eight times the net profit it made.

"The simple fact is the Queensland coal industry is approaching a crisis point," BMA Asset President Adam Lancey said in emailed remarks.

The companies "do not want to see operations paused or jobs lost, but these are necessary decisions in the face of the combined impact of the Queensland Government's unsustainable coal royalties and market conditions," Lancey said.

BHP isn't alone in finding the market backdrop challenging. In July, Bowen Coking Coal, which runs the Burton Mine Complex, said it would enter voluntary administration after the Queensland Revenue Office rejected a short-term deferral of royalties as proposed by the company.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

September 16, 2025 22:43 ET (02:43 GMT)