Mining giant BHP has begun the process to sell the Duania and Blackwater metallurgical coal mines that it jointly owns with Mitsubishi in Queensland.
The company reported that its underlying profit for the six months to December had fallen by 32 per cent to US$6.5 billion ($9.4 billion) amid rising costs and a low iron ore price.
The Mining & Energy Union (MEU) has called on BHP to guarantee worker entitlements and on-going community support for the mines in central Queensland.
MEU Queensland President Stephen Smyth said BHP had made a fortune out of central Queensland coal assets and should not cut and run, leaving workers and communities with an uncertain future.
Smyth said: “I have no doubt that another operator can successfully and profitably run the Daunia and Blackwater mines, as there is strong global demand for Queensland coal.
“But BHP has long been the biggest coal mine operator in central Queensland and I believe they owe it to their workforce and the communities that have sustained them to provide some on-going support.
“BHP must guarantee that workers’ entitlements will be protected throughout this process, including their contractor workforce.
“And I call on BHP to make a commitment to providing on-going community support – especially to the town of Blackwater which has supported the Blackwater mine for over 50 years of its operation by BHP.”
Queensland Resources Council (QRC) has asked the Queensland government to urgently reconsider its decision to introduce the world’s highest coal royalty tax, claiming it was a contributing factor in BHP’s decision to sell off the two mines.
QRC Chief Executive Ian Macfarlane said the company again warned the government’s royalty increase makes Queensland uncompetitive in attracting investors.
Macfarlane said: “It is very concerning to see BHP point to the royalty tax increase as a contributing factor in its decision to divest its interests in the Blackwater and Daunia mines in Central Queensland, as part of the joint BMA venture.
“While it’s hoped a new buyer will be found, the decision to sell the mines will create uncertainty for the employees at these two mines, their families, local businesses, and the local communities as the divestment review takes place over the next 18 months.
“BHP indicated the two mines would struggle to compete for capital under its current global investment plans, which is why the Queensland Government should be doing whatever it can to attract investors, not scare them off with the world’s highest royalty tax rate.”
Releasing its six-monthly review, BHP said the Queensland Government’s decision to raise coal royalties to the highest rates in the world meant the fiscal environment was no longer competitive or predictable enough for BMA to make significant new investments in Queensland.
Macfarlane continued: “This again confirms that the State Government’s new royalty rates, introduced suddenly and without industry consultation, has made Queensland uncompetitive.
“BHP’s concerns will be noted by other major investors here in Australia and around the world, which adds to the serious threat the royalty tax increase poses to future investment and jobs in Queensland.
“Queensland’s resources sector is the state’s biggest industry, contributing $94.6 billion to the state’s economy and supporting the jobs of around 450 thousand Queenslanders.
“The State Government needs to urgently reconsider its royalty tax increase before other companies join BHP in divesting their Queensland assets, threatening thousands of future jobs and jeopardising the state’s economic prosperity.”
