BHP to Halt Queensland Coal Mine Operations, Cutting 750 Jobs

BHP, in partnership with Mitsubishi Development, will suspend operations at the Saraji South coking coal mine in Queensland from November 2025, impacting 750 workers. The mine, part of the BHP Mitsubishi Alliance (BMA), will be placed into care and maintenance due to weak returns caused by falling coal prices and higher state government royalties.

BMA Asset President Adam Lancey said both companies regretted the decision but cited “unsustainable coal royalties” and market pressures as the main reasons. While demand for high-quality coking coal remains strong in the medium term, BHP stated that continuing operations in lower-margin areas of the Saraji mine was no longer viable.

Queensland’s coal royalty system, revised in July 2022, increased charges significantly. Royalties now stand at 20% for coal priced above A$175 ($117) per ton, 30% above A$225, and 40% above A$300. This replaced the previous top rate of 15% on coal priced over A$150. The higher taxes have squeezed profits as coal prices normalize after peaking above $600 a ton in 2022 following Russia’s invasion of Ukraine. Coking coal currently trades at around $188.80 a ton.

The Saraji complex produced 8.2 million metric tons of coking coal in the year ending June 2025. Despite the suspension, BMA remains central Queensland’s largest private-sector employer, contributing more than A$6.4 billion to suppliers in the past fiscal year.

The move underscores the pressure Australia’s coal industry faces from volatile commodity markets and rising government levies. BHP emphasized that the decision, while difficult, was necessary to ensure long-term sustainability of its operations in the region.