BHP axes hundreds of jobs in Queensland due to the state’s ‘high royalties’

ABC NEWS (Australia)

Mining giant BHP is cutting more than 700 jobs in Queensland. The company is pointing to the Queensland government's mining taxes as a prime reason for the sackings.

Transcript

00:00Certainly it's a blow to the workforce, but certainly the community of Dysart and the

00:05broader region announcing lots of these jobs, but from our perspective it's a little bit

00:10disingenuous for BHP to be laying on the coal royalties.

00:14Are some workers already affected?

00:16Has the company kind of started laying off people already?

00:19Yeah, well we were woken up this morning by the news that this was going to occur.

00:24They have started cutting some jobs in the head office and across some of their other

00:28operations across Queensland prior to this announcement.

00:32So this will continue now through consultation with the union and BHP around the next steps.

00:39And so how many jobs are likely to go in that Dysart area?

00:44At this point we understand it's around 70 jobs, production jobs.

00:49Majority of those are operational services employees.

00:52We're hoping that they can be picked up and given full-time work in the Sriraji area.

00:56And certainly our focus is on those employees, their families and the community as a whole

01:00to make sure they're not strung on the scrap heap by this decision.

01:03Yeah.

01:04So for our viewers who might not be familiar with Dysart, how many people live there and

01:09what kind of impact could this have on a little community like that?

01:11Well look, there's no doubt that in Dysart it's a mining community.

01:15It has been for over 50 years.

01:17The largest employer is BHP or BMA.

01:20There's another, a number of other mining companies, but it'll have a massive effect.

01:25When you take one family out of a community, you break those friendships and relationships.

01:30But certainly if you take a number of families out in excess of 70, it's going to have a massive

01:34effect on the services all the way through.

01:37Schooling, local businesses and it's a ripple effect.

01:40So it'll certainly be affected and we want to make sure that that doesn't happen and we're

01:44doing everything in our power to make sure that these people are redeployed in permanent

01:47roles.

01:48And how might that work?

01:50Where are the other closest mines that they might be able to work at?

01:54So this mine was actually originally called Norwich Park and it shut in 2012 and then it was

01:59reopened in 2020.

02:00So we're hoping that these workers can be transferred across to the Siraji mine, which is the existing

02:05lease next door.

02:06BMA own it.

02:08And we think there's plenty of vacancies there where these workers could go into in permanent

02:11roles and continue on working and living in the Dysart area.

02:16Now, you've already touched on this, but what do you make of the company's explanation

02:20that this is because of the high royalties paid to the state government and the increasing

02:24cost of doing business?

02:26Look, the royalties are driven by coal price.

02:28So the price has come off the boil a bit, but as of today, caking coal is still at $184

02:36US a tonne on the spot market.

02:37A lot of these contracts for BHP or BMA are long term contracts, but the coal royalties price

02:43is driven, as we said, it's driven Australian dollars and it's when the price goes up, the royalties

02:48go up.

02:49So the profits go up.

02:50So, you know, we think it's a little bit disingenuous that they're blaming this royalty scheme.

02:53It doesn't kick into $175 Australian dollars.

02:57They've worked under the scheme for a long, long time.

02:59So we think it's just, unfortunately, they're using workers as pawns in this game or this

03:05argument with the government around the royalties, and it's very disingenuous in our view.

03:10Do you know how much, like what percentage they do pay?

03:13At this point, once it gets above $175 Australian, the rate does go up and there's a varying tiers

03:22within the rate dependent on a scheme.

03:24So it is a little bit complex, but the rate of the royalties is an increase from what it's

03:30been in the past.

03:31But it's a minimal increase, and I can't emphasise enough, it's driven by a price increase,

03:36which in turn is driven by the profits that the company is making.

03:39So they are really having a bit of a go at the government around this royalty scheme,

03:46which we fully support, and we think it's good because it puts money back into regional

03:49Queensland.

03:50So you really think that the company should be able to handle the royalty system as it

03:55is set up now?

03:56Yeah.

03:57It wasn't a problem.

03:58They'll get $900 US a tonne for the coal.

04:02This royalty scheme's been in place for a long time, and the scheme is in there originally

04:06was when it was from $1 to $150, then $175.

04:10So at the end of the day, this royalty scheme, they've been paying it and the prices are up.

04:15Then the scheme comes off, or the royalty comes off because the price drops.

04:20So it's just the ebbs and flows of what happens with prices, and they can buffer this royalty

04:27increase.

04:28And I'm unsure why they're banging on about how much it's affecting their business.

04:32It's just, as I said, it's something that the Queensland Government needs to intervene

04:36and be talking with the company around this.

04:39But again, the money goes back into regional Queensland's where you want it spent.

04:42And what about the company saying that there's just generally an increasing cost of doing

04:46business?

04:48Yeah, I think everyone in the average life, the average person sees the cost of living's

04:52gone up.

04:53But don't forget, companies like BMA also get the diesel fuel rebate.

04:56They get a lot of benefits, as well as a multinational company.

05:02So, you know, I believe that, like anything, when you're running a business, we're talking

05:07about a large business, and you're always looking at how you can manage your costs.

05:11And that's what they should be doing.

05:12But it shouldn't be at the expense of workers losing their jobs, community suffering, and

05:16the general economy of Queensland being affected.

05:19Is there any danger, any likelihood of strike action in support of workers or not?

05:25No, not at this stage.

05:26Obviously, we'll work through with BMA or BHP around the consultation process, because

05:32this is a major workplace change.

05:34Our aim is to, let's hope it's a smooth transition and these workers are put into other positions.

05:39But one of the fallouts of this is those workers in the head office based in Brisbane who've

05:44lost their jobs.

05:45There's quite a lot of them.

05:46So I think sometimes that gets lost in the mix is those that don't live in the community,

05:51but elsewhere that have also lost their jobs as well.

05:53So there'll be, unfortunately, a flow and effect with that as well.

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