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We plan to move more of our own dirt: BMA

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article image A raft of cost-cutting measures have hit the Central Queensland district in recent months.
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BHP Billiton Mitsubishi Alliance asset president Stephen Dumble said the company is committed to a future in Central Queensland, but indicated cost cutting measures would continue.

Giving a speech in Mackay on Friday Dumble said the weakening of demand meant the peak of the cycle had passed.

“In February 2011 we hit the peak in the cycle. The premium hard coking coal index pricing was around $US350 per tonne. Today that same number is about $130,” he said.

A raft of cost-cutting measures have hit the Central Queensland district in recent months, with contractors and mining service companies affected as BMA looks to take more over-burden work in-house.

“We are looking to increase the productivity of our own truck and shovel fleets so we can displace the need for others to move our dirt,” Dumble said.

“We are establishing very clear performance benchmarks with the productivity.

“We are moving increasingly towards larger trucks, larger trucks obviously increase the human productivity.”

Dumble said that the high-cost environment during the peak was not sustainable in the current market, stating the industry mishandled those trying to cash in on the boom.

“We have seen the cost inflate significantly across the entire industry, particularly in the labour and the mining services industry,” Dumble said.

“We have seen our industry overrun by people who all want to chase higher wages, people who were trying to cash in on the boom.

“That is the sort of behaviour that has been created. As an industry, I don't think that we particularly handled it well.”

A spokesperson for the company said BMA was focused on reducing its overheads and operating costs across the business’ which included ‘reviewing contractor arrangements and making the necessary adjustments to ensure operations can remain cost competitive’.

Last week Downer EDI cut 185 jobs from BMA’s Goonyella Riverside coal mine in Moranbah after BMA advised that BMA will be transitioning a portion of pre-strip activity at Goonyella from contractor to owner-operator.

While eighty workers were cut from Crinum underground coal mine in April after mining contractor Redpath reduced its crew numbers.

While a number of contractors were also cut from the company’s Saraji and Blackwater coal mines.

Despite the cuts, Dumble said BMA was committed to maintaining a strong presence in the Central Queensland region, stating the company had billions of dollars worth of investment in the pipeline.

“We have about $10 billion worth of capital projects on the way. We have new mines with Daunia and Caval Ridge,” Dumble stated.

Dumble also said the expansion at Broadmeadow mine also represented an investment of more than one billion dollars.

“We have a long history of this industry in this part of the world, we're committed to the future and we are putting our money where our mouth is,” he said.

Vicky Validakis

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