Fears of the mining boom’s end gained further strength after 900 coal mining jobs were slashed by global giants BHP Billiton and Xstrata’s Australian operations.
At least half of the job losses are expected to hit Queensland’s coking coal industry because of plummeting prices related to softening steel demand from China.
About 300 positions are from central Queensland’s Gregory open-cut mine operated by the BHP Billiton Mitsubishi Alliance (BMA).
BHP will stop production at the 33-year-old mine on October 10, saying it was no longer profitable although it could re-open if prices lifted.
Production costs had exceeded revenue from product sales, the company said in a statement.
Xstrata Coal will cut 600 jobs but would not say which of its NSW Hunter Valley mines or Queensland’s Bowen Basin operations would be affected.
On Monday both companies blamed falling coal prices, high costs including wages and a strong Australian dollar for their decisions.
While the plunging iron ore price received publicity last week, metallurgical coal – also a steel input – is selling for $US158 ($A152.96) a tonne – down from a record $US330 ($A319.47) a little over a year ago.
The union representing coal workers attacked the companies in what they said was a typical and ruthless response to a price-cycle downturn.
Neither of the companies had consulted the union before Monday’s announcement, Construction, Forestry, Mining and Energy Union, general secretary Andrew Vickers said.
The union blamed, in part, a ruthless management philosophy of BHP chief executive Marius Kloppers to close mines if there was any temporary slump in profitability.
“They sack our people, our members and get rid of jobs, that’s their answer to every problem,” Mr Vickers told AAP.
“They don’t sack CEOs when they make multi million if not billion dollar cock-ups like Kloppers has done with BHP in his reign.”
BMA’s mines have been the scene of industrial action all year related to a new enterprise agreement, with the group also shutting the Norwich Park mine this year and an expansion at Peak Downs cancelled.
Queensland Premier Campbell Newman asked workers in the state’s coal industry to be realistic about wage increases amid a jobs purge, but he won’t rule out a mining royalty increase.
“I do sort of ask everybody involved in the coal industry to recognise now that prices are off, it’s not a time to be asking for huge increases in prices from sub-contractors, or indeed high pay rises for employees,” he said.
BMA Alliance president Stephen Dumble said the business would work closely with its workforce and look for opportunities to redeploy affected employees to other BMA operations.
Xstrata Coal said the job cuts would be made as it scaled back high-cost production at some of its mines but overall Australian production volumes would not be reduced.
Its growth and expansion projects in NSW and Queensland would go ahead.
Resources Minister Martin Ferguson recently declared the mining boom over, after BHP postponed expansion projects including Olympic Dam in South Australia, worth a combined $US50 billion ($A48.41 billion).
Fortescue Metals recently shelved nearly $US1.6 billion ($A1.55 billion) of expansion plans and cut about 1000 jobs because of the weak iron ore price.
Fat Prophets resources analyst David Lennox said the boom in bulk commodities such as coal and iron ore was well and truly over and the larger miners would shut unprofitable mines.
