The Anglo-Australian company plans to expand production of metallurgical coal by 50% over the next three years in Queensland state, Kloppers said after the release of the company’s full-year earnings results. However, plans to develop the Peak Downs coal assets to add 2.5 million metric tons a year have been put on hold as the industry grapples with sharply lower prices for the commodity and higher costs, Bloomberg reported.

BHP and venture partner Mitsubishi Corp., which jointly own mines in Queensland, earlier this year closed the loss-making Norwich Park coal mine in the state. BHP said it is pushing ahead with the US$2.1 billion Caval Ridge coal project, which is on schedule to begin production in 2014 and will add 5.5 million tons a year of export metallurgical coal.

Kloppers said a combination of low coal prices and high capital costs prompted BHP to pause development of Peak Downs. “That will be one of the first things that we look at when we see demand conditions and cost issues change again,” he said.

Months of rolling strikes at the BHP-Mitsubishi mines and cost pressures knocked about US$1.1 billion from underlying earnings in the year to June 30.

The venture and three labor unions agreed the outline of a new workplace agreement in July, and remain in negotiations to reach a settlement.