MELBOURNE (Reuters) -BHP will suspend operations and cut 750 jobs at a Queensland coking coal mine it shares with a unit of Mitsubishi, blaming low prices and high state government royalties that have dented its returns, it said on Wednesday.

BHP Mitsubishi Alliance's (BMA) Saraji South, part of the Saraji Mine Complex, will be placed into a period of care and maintenance from November 2025, it said in a statement. BHP owns the mine jointly with Mitsubishi Development, a unit of Mitsubishi Corp.

The Saraji complex produced 8.2 million metric tons of coking coal in the year to June 2025.

"As joint owners of BMA, BHP and Mitsubishi Development do not want to see operations paused or jobs lost, but these are necessary decisions in the face of the combined impact of the Queensland Government's unsustainable coal royalties and market conditions ," BMA Asset President Adam Lancey said in a statement.

BHP said while medium-term demand for the company's hard coking coal was strong, maintaining operations in lower margin areas of the mine footprint was not sustainable under current conditions.

Queensland raised royalties in July 2022 to 20% for coal priced above A$175 ($117) a ton, 30% for prices above A$225 and 40% for prices over A$300. Previously, the top tier was a 15% royalty on prices over A$150 a ton.

Prices of coking coal, which soared above $600 a ton following Russia's invasion of Ukraine in 2022 have normalised, last trading at $188.80.

BMA is the largest private sector employer in central Queensland and in the 2025 fiscal year paid more than A$6.4 billion to suppliers, it said in a statement.

($1 = 1.4959 Australian dollars)