The Queensland government is working with BHP after the mining giant slashed 750 jobs across the state due to the “unsustainable impact” of its mining royalties.

The BHP Mitsubishi Alliance (BMA) will also mothball operations at Saraji South, one of Australia’s largest mines, in the Bowen Basin from November in what is the site’s second shuttering.

It will review its own FutureFit Academy in Mackay, a training centre that helps young people enter the industry.

The mining giant blamed its decision on the high royalties on business returns when it told workers of the changes this morning.

BMA asset president Adam Lancey said the group did not want to see jobs lost and operations paused, but these were “necessary decisions in the face of the combined impact of the Queensland government’s unsustainable coal royalties and market conditions”.

“The simple fact is the Queensland coal industry is approaching a crisis point,” he said.

“This is now having real impacts on regional jobs, communities and small businesses.

“The uncertainty this creates for our people and our communities is not taken lightly, and we will do everything we can to support them.”

Premier David Crisafulli inherited mining royalty rates from the former Miles government and has refused to introduce any amendments to the legislation, which he says is locked in until at least 2029-30.

The royalty rates are a percentage of the average price per tonne of a mineral sold that mining companies must pay, with coal delivering billions of revenue for the state government.

Deputy Premier Jarrod Bleijie said the government was “not at war” with the mining sector but added that the LNP promised not to change the royalty regime before being elected.

“We’ve stuck by the election commitment, so it’s no surprise to BHP, a multibillion-dollar company. That was our commitment to the people of Queensland,” he said.

Bleijie labelled BMA’s review into the FutureFit Academy in Mackay as “unAustralian”.

“I think they should keep investing,” he said.

“They have made billions of dollars from the resources owned by Queensland taxpayers and Queenslanders, and they should keep investing in the future of young people who want a job in a mine or a resource sector in Queensland.”

Treasurer Jim Chalmers said the state government is in discussions with BHP.

“We know that this is a commercial decision. We’ve seen the reasons that the BHP leadership have given for this decision, and my understanding is that the state government is in discussions with them because BHP has identified some state policies leading to this decision,” he told reporters this afternoon.

“Our resources sector is really important to our economy, state economy, the national economy.”

The Mining Energy Union said BHP blaming royalties was “disingenuous” as higher prices lead to higher rates of royalties and said the company was “sulking” over having to share profits with the state.

“Coal prices have come back to more normal levels, but to fear-monger about a ‘crisis’ in coal is misleading and frankly shameful behaviour from BHP,” Mining Energy Union Queensland president Mitch Hughes said.

“Our high-quality coal belongs to all Queenslanders, not to BHP.

“If BHP want to focus on other parts of their business, they should get out of the way and let someone else operate these great central Queensland mines.”

Hughes went further to accuse BHP of using workers as “pawns” in its disagreement with the Queensland government.

“Workers need facts, certainty and security – not alarmism,” he said.

BHP’s underlying attributable profit was $15.27 billion in the 2024-25 financial year, excluding the $10.5 billion it paid in Australian taxes, royalties and other payments.

BHP fighting government on second front

While BHP battles the royalty system in Queensland, the company is also fighting to prevent the federal government from adopting a cashflow tax proposed by the Productivity Commission in an interim report.

The commission has suggested all companies receive a five per cent cashflow tax and small to medium-sized businesses receive a 20 per cent reduction in their corporate tax.

BHP responded to the proposal this week, saying Australia’s largest companies would “ultimately bear a higher effective tax burden”.

“This is counterproductive,” it said.

BHP said the cashflow tax would be a “disincentive” and threatened to pull investment from Australia.

“We are a proud Australian business and we want to be able to invest more here, but the reality is that capital flows globally and our Australian pipeline of growth projects would be less competitive for capital,” it said.

“Inevitably, this will mean more of our available capital will flow overseas rather than into projects in Australia.”