BHP Mitsubishi Alliance Abandons Major Queensland Coal Project Over Royalty Dispute

The project, expected to generate around 1,000 construction and 500 operational jobs, was given the green light by the state government.

Mining giant BHP's corporate office in Perth, Australia on Sept. 20, 2025. Wade Zhong/The Epoch Times

One of the state’s largest coal-mining entities, the BHP Mitsubishi Alliance (BMA), has backed out of a major project amid tensions over Queensland’s mining royalty scheme.

BMA will no longer develop the 136-hectare Saraji East Project which had been slated for the Bowen Basin near the regional central Queensland city of Mackay.

The project, expected to generate around 1,000 construction and 500 operational jobs, was given the green light by the state government and awaited federal approval.

However, a BHP spokesperson confirmed it was walking away from the mine.

“As previously announced by BHP, we are not committing to investing in any expansion of our operations in Queensland under the government’s unsustainable royalty regime,” they told AAP.

Coal is stockpiled before being loaded on to ships at the RG Tanner Coal Terminal in Gladstone in Queensland, Australia on Jan. 20, 2012. The Terminal plays a vital role in delivering coal supplies to foreign markets. AAP Image/Dave Hunt

In 2022 and 2023, the previous Labor government announced a new framework for taxing revenue from coal extraction amid ongoing issues with state debt.

It meant coal (thermal and metallurgical) produced from July 1, 2022 would be taxed at progressively higher rates depending on where global prices were: under $100 per tonne, over $100, over $150, over $175, over $225, or over $300.

If coal prices were to increase to over $300 per tonne, it could attract up to six tiers of taxes from 7 percent per tonne, up to 40 percent per tonne.

The latest confirmation—and blow to the Queensland mining sector—comes after BHP’s September decision to shutter its Saraji South mine, axing 750 jobs.

And that was followed by a decision by Anglo American and Queensland company QCoal closing two underground units at Cook Colliery near the Bowen Basin, predicted to impact 1,200 workers.

LNP Yet to Walk Back Royalty Scheme

Since winning power, the Crisafulli LNP government has resisted any movement to repeal the royalty scheme—The Epoch Times understands this is due to political sensitivities.

Yet Dale Last, the minister for mines, told The Epoch Times on Nov. 28 the state’s mining industry was going from strength to strength.

“After Labor’s decade of decline sent investment off a cliff, the mining industry is backing our plan that’s restoring investor certainty and sending a clear message that Queensland is open for business—including through the landmark deal announced this week to deliver new international investment into the Broadlea, Carborough Downs and Ironbark coal mines, and fast-tracking the Centurion coal mine extension in Central Queensland,” he said in a statement.

In an earlier statement to The Epoch Times, when BMA declared it would cut 750 jobs, the government said it was moving to cut red tape.

“The Crisafulli government is providing certainty for the coal industry in Queensland with faster decisions, streamlined approvals and a stable royalty regime, exactly as we committed before the election–there will be no changes to Queensland’s royalty regime,” Treasurer David Janetzki said.

Earlier this year, BMA President Adam Lancey said current conditions for mining in Queensland were “unsustainable.”

“We’ve been very open about the challenges facing Queensland’s coal industry as a result of the Queensland government’s coal taxes and royalties,” he said.