BHP Billiton shut down both its Norwich Park and Gregory open-cut operations in 2012 once falling coal prices began to eat into profits.
BHP Billiton shut down both its Norwich Park and Gregory open-cut operations in 2012 once falling coal prices began to eat into profits. Contributed

BHP Billiton puts struggling mines in the firing line

THE world's largest mining company has warned it "will not hesitate" to shut down any Queensland coal mine that fails to make money.

BHP Billiton told analysts in Brisbane its focus on cutting costs at its operations was bearing fruit, but there would be no relaxing in its quest for savings.

Its threat on mothballing a struggling operation is not an empty one..

The giant shut down both its Norwich Park and Gregory open-cut operations in 2012 once falling coal prices began to eat into profits.

APN understands BHP coal president Dean Dalla Valle said the company was now recovering from long-term industrial action, higher taxes, and the sky-scraping Australian dollar.

The presentation suggested Norwich Park and Gregory were "temporarily" shut down, although BHP would not discuss the prospect of them restarting production.

Mr Dalla Valle said BHP would improve its position by first using 100% of its rail and port capacity, something it has now achieved.

The company would also be "pulling the productivity lever hard"

Its 13,000 employees and contractors have long been told to "sweat the assets" in an effort to pull the most coal from the ground in an effort to increase productivity.

No new major projects were on the cards for Central Queensland after it spent almost $9 billion on building the Daunia and Caval Ridge mines, and expanding its Broadmeadow project and Hay Point Coal Terminal.

Already, BHP believes $830 million has been cut from its operating budgets across its entire Australian coal network.

"Lastly, we will continue to act decisively to ensure that our mines are cash positive and we will have no hesitation in closing loss making operations," Mr Dalla Valle said.

"Thankfully I'm pleased to say that all of our producing mines are cash positive... despite the significant decline in prices seen this year.

The Construction Forestry Mining and Energy Union has its suspicions that its mothballed mines could be reopened.

District president Stephen Smyth described the threat of shutting a mine with no hesitation as "ruthless".

He said if the company wished to save costs it needed to rein in "wild management inefficiencies".


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