BHP to suspend operations, cut jobs at Australian coking coal mine

Core Viewpoint - BHP will suspend operations and cut 750 jobs at its Queensland coking coal mine due to low prices and high state government royalties impacting returns [1][2][3] Group 1: Company Actions - BHP Mitsubishi Alliance's Saraji South will be placed into care and maintenance from November 2025, with a production of 8.2 million metric tons of coking coal in the year to June 2025 [1][2] - The decision to suspend operations is a response to the unsustainable coal royalties imposed by the Queensland Government and current market conditions [2][3] Group 2: Market Conditions - Coking coal prices, which peaked above $600 a ton post-Russia's invasion of Ukraine, have normalized to around $190 [4] - Medium-term demand for hard coking coal remains strong, but maintaining operations in lower margin areas is not sustainable under current conditions [3] Group 3: Regulatory Environment - Queensland raised coal royalties in July 2022 to 20% for prices above A$175 ($117) per ton, with a top tier of 40% for prices over A$300, significantly increasing the financial burden on mining operations [3] - The Mining and Energy Union recently won a Federal court ruling that affects pay rises for contracted workers, leading to increased salaries for around 1,800 employees by A$20,000 to A$30,000 on top of an average coal salary of A$120,000 [4][5]