Bowen Coking Coal Enters Liquidation, Threatening 500 Jobs
Mine Operations Continue Amidst Administration Process
A significant mining firm controlling a vital steel-making coal mine in Queensland’s Bowen Basin has entered liquidation, placing approximately 500 jobs at the Burton Coal Complex in jeopardy. The move follows substantial claims exceeding $29 million from a former contractor.
Administrators Appointed to Stabilise Operations
Mark Holland and Shaun Fraser of McGrathNicol have been appointed as voluntary administrators for Bowen Coking Coal. Their statement indicated that the company’s operations would continue on a “business-as-usual basis” while a sale or recapitalisation is explored. The Burton Mine Complex operations are expected to remain uninterrupted during this period. A meeting of creditors is scheduled by August 8.
Negotiations Fail, Leading to Administration
Bowen Coking Coal acquired the Burton Coal Complex, located north of Moranbah, in 2021. The mine had been operated by Indonesian contractor BUMA Australia for the past two years, with its agreement set to expire on June 30, 2025, necessitating the owner-operator model.
On June 15, Bowen Coking Coal informed investors it had received a letter of demand from BUMA Australia for outstanding invoices totalling $15,288,017. The company subsequently announced its failure to reach agreements with its two primary creditors: BUMA Australia and the Queensland Revenue Office (QRO).
The company’s board cited the decision to appoint administrators as a consequence of the QRO rejecting a request to defer royalty payments. The board highlighted the “challenging environment for the coal industry in Queensland,” attributing the difficulties to increased costs, declining global coal prices, and higher royalty rates introduced by the Queensland government in 2022.
Coal Industry Faces Growing Pressures
The Queensland Resources Council (QRC) commented on the increasingly difficult operating conditions within the coal sector.
“The announcement will cause deep uncertainty for hundreds of Queensland workers and their families who face the prospect of losing their jobs if the Burton Mine closes permanently.”
—Janette Hewson, Chief Executive, Queensland Resources Council
Janette Hewson noted that falling coal prices, down nearly 17% year-on-year, are significantly impacting the industry. She further stated, “Energy and production costs have risen significantly for coal producers while coal prices are stubbornly low and Queensland producers are paying the world’s highest coal royalty tax rates.”
“QRC is aware of other mining companies operating in Queensland experiencing difficulties attributable to the same factors.”
Globally, seaborne metallurgical coal prices have seen volatility, with benchmarks fluctuating based on supply disruptions and demand from steelmakers. For example, in late 2023, prices for premium hard coking coal dipped below $200 per tonne, a significant drop from earlier highs, impacting producer profitability (Source: Argus Media). BUMA Australia has declined to comment on the situation.
