(EnergyAsia, September 13 2012, Thursday) — BHP Billiton said its equal joint-venture operation with Japan’s Mitsubishi Corp would cease production at its Gregory open-cut coal mine near Emerald in Queensland state from October 10.

BHP Billiton Mitsubishi Alliance (BMA) made the decision following a continuing operational review of the Gregory Crinum operations, which determined that the Gregory open-cut mine production was no longer profitable in the current economic environment of falling prices, high costs and a strong Australian dollar.

The company will try to relocate the 297 staff and contractors working on Gregory which produced 2.8 million tonnes of coking coal in the year to June to its other mines. The mine started up in 1979.

BMA Asset President, Stephen Dumble, said production costs for the Gregory mine exceed the revenue from product sales, necessitating its closure.

“The Crinum underground mine will continue to operate along with the Gregory coal handling preparation plant. The remaining operations will be made more competitive by the removal of the high cost Gregory production.

“We understand that this decision will have an impact on our employees, their families and the Emerald community. We will work closely with our workforce and look for opportunities to redeploy affected employees to other BMA operations.

“We will also work with community stakeholders throughout the process.”

BHP said the continuing operational review will identify additional measures to further reduce operating costs, making remaining underground production more profitable. BMA will also continue to review its remaining portfolio of assets to ensure that each operation can be cost competitive and profitable across the price cycle.