The BHP Group Ltd (ASX: BHP) share price is in focus after news that 750 jobs are being cut at one of the ASX mining share’s project.
BHP is one of the world’s biggest miners with projects across resources like iron ore, copper, potash, coal and nickel.
750 jobs to be cut
According to reporting by various media, including the ABC, there will be 750 jobs cut at a Queensland coal mine owned by BHP Mitsubishi Alliance. This is a 50:50 joint venture between BHP and Mitsubishi Development.
The Saraji South mine at Dysart will reportedly be mothballed from November. Saraji was opened in 1974, it’s an open pit coal mine located near Dysart in Queensland’s Bowen Basin. BHP says Saraji is one of Australia’s largest mines, by recoverable coal reserves.
It was reported that the impact of Queensland’s coal royalties were partly to blame for the decision about the mine.
Queensland has coal royalties across three tiers for miners the higher the coal prices go. It’s a 20% royalty at $175 per tonne, 30% at $225 per tonne and 40% if the coal price exceeds $300 per tonne.
The ABC reported that BMA asset president Adam Lancy said in a statement that the company didn’t want to cut jobs and said the following:
…but these are 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.
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.
Final thoughts on the BHP share price
This may be a difficult decision for the workers involved and the production from that project.
However, coal is not the major earnings generator for BHP – iron ore and copper make much more profit – so I wouldn’t buy or sell BHP shares based on this news.
At the right time, BHP can be an effective investment but it doesn’t seem like commodity prices are at a low, when I normally get more interested in miners. There are other ASX dividend shares I’d rather buy at this stage.
