A major Queensland coal mine is on the verge of pausing operations, potentially leaving 500 workers without jobs. The Burton coal mine, located 80 kilometres northwest of Moranbah, opened in 2022 but has faced significant challenges, including a massive flood season and record low coal prices.
Bowen Coking Coal Ltd, the mine's owner, has warned that operations may halt within months unless immediate funding is secured or coal prices improve. The company has already closed several mines, including the Bluff mine near Blackwater, citing soaring state royalties and catastrophically low prices as primary reasons.
The Impact of Royalties and Market Conditions
Nick Jorss, executive chair of Bowen Coking Coal, highlighted the $120 million in royalty taxes paid to the Queensland government since July 2022. He criticized the progressive royalty structure, calling it a "super royalty" that taxes revenue regardless of profitability, putting many mines in central Queensland at risk.
Broader Economic Consequences
If the Burton mine closes, the effects could ripple through surrounding cities like Mackay and Brisbane, disrupting local supply chains. The Bowen Basin, home to Australia's largest black coal reserves, is crucial to the nation's coal production, but tax pressures and global market instability threaten its viability.
Global Market Trends
Steel-making coal prices have dropped 25% to US$175 a tonne, while thermal coal prices have also fallen by 25% to US$66 a tonne. Experts attribute this decline to global instability and reduced demand in China and India, compounded by the shift toward renewable energy.
Key stakeholders have criticized the Commonwealth Grants Commission for using Queensland's royalty revenues to justify withholding $5 billion in GST, further straining the industry.
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