a day ago
Major Queensland coal mine facing termination with hundreds of jobs on the chopping block
A Queensland coal mine may imminently 'pause' operations, which could result in 500 workers losing their jobs.
The Burton coal mine, 80 kilometres northwest of Moranbah, was first opened in 2022 and despite fierce attempts to ramp up production and lower costs, a mammoth flood season and record low prices have put the facility in a perilous situation.
Bowen Coking Coal Ltd, which owns the mine, released a statement to the Stock Exchange on Friday and revealed that the mine could 'pause' production within a matter of months if additional cash or equity was not immediately sourced.
'If immediate funding efforts are unsuccessful and/or coal market pricing dynamics do not improve, Bowen may seek to temporarily pause operations at part, or all, of the Burton Mine Complex,'' the ASX statement read.
The company has been forced to close a number of its coal mines in recent years including the Bluff mine near Blackwater, with Bowen Coking Coal executive chair Nick Jorss blaming the crisis on soaring state royalties and catastrophically low prices.
'Bowen is the tip of the iceberg of the pain being felt by central Queensland,'' Mr Jorss told the Courier Mail.
'We're not the only ones on the edge. Quite a lot of mines in central Queensland are cash negative, meaning a lot of jobs are at risk."
Mr Jorss, who has worked in the industry for close to two decades, said the company had paid $120 million in royalty taxes to the Queensland government, after the former Labor government introduced a new progressive royalty structure in July 2022.
'This super royalty is an ongoing tax on revenue irrespective of whether mines are making profit or can pay their wages or other costs.' Mr Jorss said, adding 'it's a really sad state of affairs for Queensland.'
The Bowen complex which recently acquired a cash injection was initially given a 10-year life.
The facility produces two million tonnes of coal per year, with the Bowen Basin itself holding the largest black coal reserves in the nation.
Mr Jorss said that despite Queensland still holding the title of the largest producer and exporter of coal in the nation, tax pressures had taken their toll on the industry's ability to be commercially viable and competitive.
'(Former Labor treasurer) Cameron Dick is still playing political games on royalties, but it's impacting real people's lives in central Queensland and beyond,' he said, adding it would be a 'real tragedy if it's taxed out of existence".
Mr Jorss said that if the 500 jobs are cut and operations are ceased then surrounding cities as far as Mackay and Brisbane would feel the pinch due to a lack of local supply.
Industry magnates have slammed the Commonwealth Grants Commission, which allocates GST revenue among the states, for listing Queensland's soaring revenues brought in from commodity royalties as the justification for it to not receive an estimated $5 billion in GST.
Spot prices for coal used to produce steel which is the majority of Burton's output have experienced a steep decline in global prices in the last year, sinking 25 per cent to US$175 a tonne.
Experts have put this down to global instability sparked by US President Donald Trump's sweeping tariff policies and a historic lack of demand in China and India.
Thermal coal used in coal-powered fire stations have also plunged by 25 per since last June to US$66 a tonne as the nation shifts towards a renewables energy grid.
