BHP under union fire amid plans to sell Qld coal mines
Mining giant BHP says it plans to off-load two of its “low quality” metallurgical coal mines in central Queensland as union leaders accuse the company of driving down working conditions at the operation.
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MINING giant BHP says it plans to off-load two of its metallurgical coal mines in central Queensland amid a slide in prices for the steel-making commodity.
Announcing a 4 per cent decline in annual profit Tuesday, BHP said it would look at divesting its interest in BHP Mitsui Coal (BMC), which operates the Poitrel and South Walker Creek mines in the Bowen Basin. BMC is 80-per cent owned by BHP and 20 per cent by Japan‘s Mitsui and Co.
The union representing workers at the mines meanwhile said it would welcome new owners, claiming BHP has overseen a decline in working conditions at the operations.
BHP said the BMC mines were low cost but produced low-quality coal that was less in demand than the hard-coking coal increasingly used in steel mills across Asia.
“Given our focus on hard-coking coal, these assets could better compete for capital outside of BHP,” the company said in its results announcement. Options for divestment could include a demerger or a sale of the mines.
CFMEU Mining and Energy Queensland president Stephen Smyth said the union was looking forward to working with the new owners at Poitrel and South Walker Creek to “restore fair working conditions.”
“BHP has been an industry leader in casualising permanent jobs in the Queensland coalfields and is now driving down wages through its in-house labour hire provider Operations Services,” said Mr Smyth. “Whoever buys these mines, we’ll fight for workers’ jobs, rights and safety.”
BHP denied working conditions at the mines have deteriorated. “Operations Services offers market competitive rates, which are well above the relevant awards and compare favourably to others in the industry,” the company said.
“ Operators and maintainers earn more than $100,000, and have the added benefits of stability, paid parental leave, annual leave and sick leave, performance bonuses and access to the company share program.”
The company said that to date it has permanently employed nearly 3000 people – half are from regional communities, a third are female and more than a tenth were indigenous
BHP said metallurgical coal prices had weakened markedly amid the global economic shutdown caused by COVID-19 and faced a “difficult and uncertain period.”
Even against the backdrop of the “decarbonisation of the global economy,” metallurgical coal would remain an essential input in steel-making process for a long time but the focus would be on cleaner fuel.
BHP chief executive Mike Henry said the company was moving to concentrate its coal portfolio on high quality coking coals. “This has the greatest potential upside for quality premiums as steel makers seek to improve blast furnace utilisation and reduce emissions intensity,” Mr Henry said.
Operations at the two coals mines would continue unchanged and no final decisions had been made about their future. The divestment process may take up to two years to complete.
BHP said it also was reviewing options to divest its New South Wales Energy Coal and and its Cerrejon coal venture in Colombia.