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.
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It's the latest and last in a series of incremental increases from nine per cent over more than a decade since they were legislated by the Rudd-Gillard Labor government in 2012. With the latest bump, a 30-year-old earning $60,000 would have an extra $20,000 in super by retirement, according to the Association of Superannuation Funds Australia. It will add about $300 each year to the superannuation of a worker on a $60,000 salary, or $500 for someone on a $100,000 salary. "The system foundations are cemented for young, working people to have a comfortable retirement," ASFA chief executive Mary Delahunty said. "It's a moment all Australians should be proud of." The association says the cost of a comfortable retirement increased 1.6 per cent in the past year, while the cost of a modest retirement rose 1.7 per cent. A "comfortable" retirement includes top-level health insurance, a reasonable car and leisure activities. The cost of either outcome was increasing slower than Australia's current 2.4 per cent headline inflation but retiree budgets remained under pressure from rising food, energy and health costs. Couples on average need $73,900 annually for a comfortable retirement, while most singles needed $52,300 per year, ASFA says. For a modest retirement covering the basics, couples needed $48,200 each year, singles $33,400, or for renting couples, $64,250, and $46,660 each year for singles who rent. The figures underlined the importance of increasing Australia's housing stock, Ms Delahunty said. "They also illustrate how super can be the difference between hardship and stability later in life, especially for renters." For some workers, the extra contribution will come from their existing pay package, according to CPA Australia's superannuation lead Richard Webb. "It's a good idea to check with your employer to see how they view the changes and what it means for you," he said. Workers on contracts with a total remuneration package could see a slight drop in their take-home pay, while those on award or enterprise agreements would likely receive the contribution on-top of their current pay. When compulsory superannuation was introduced in 1992 - in part to reduce government spending on the Age Pension - only one in 10 Australian retirees listed super as a source of income. Nine in 10 people between 30 and 50 now have super. Government spending on the Age Pension is projected to fall from 2.3 per cent of gross domestic product in 2020 to two per cent by 2062/63, despite a doubling of the over-65 population and a trebling of over-85s over the same period. However the super guarantee increase wouldn't help those who missed out on paid work for extended periods, Super Consumer Australia chief executive Xavier O'Halloran said. "(For) people who have caring responsibilities or who have been locked out of the unaffordable housing market ... increasing SG further won't address those inequalities," he told AAP. Mr O'Halloran said there was more that could be done to support people struggling in retirement, when a significant portion of their autumnal years' savings were made. "Right now, there are no minimum standards for retirement products like there are for MySuper," he said. "There is also no performance testing of retirement products, so super funds can still sell poor products."
Sky News AU
6 hours ago
- Sky News AU
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.
