Coal mining
Coal mining Supplied

Cap Coast businesses excluded from BHP's new payment terms

MINING giant BHP's decision to extend the number of postcodes considered "local", qualifying more than 600 Queensland businesses for preferential 30-day payment terms, has been well received across the region.

The announcement follows a similar move by Peabody Energy last week and applies to all small businesses in Australia with an annual turnover of less than $10 million and 20 full-time equivalent employees.

Larger businesses in the 4700-4702 postcodes, which include Rockhampton, Gracemere, Marlborough and Stanage, may also be eligible, but not those on the Capricorn Coast.

A BHP spokesman said getting payment terms right meant striking a balance between supporting suppliers local to its operations and competing globally.

"We have conducted a thorough review to ensure we have the right balance in the changes we're announcing," they said.

One of the company's biggest Central Queensland suppliers is Yeppoon-based Coal Train and Undamine Industries, which can have a large number of contractors on site at BHP's Broadmeadows mine.

Although not included in the new policy, CEO Karla McPhail said it was "excellent" the company was reviewing its payment terms.

"We certainly appreciate the complexities of the mining industry," Ms McPhail said.

"30-day terms make it much easier for businesses to operate. It takes payroll, ATO and superannuation pressures from employers."

Keppel MP Brittany Lauga said the decision followed calls from the state and federal governments to revise the procurement policy as some local small and medium sized businesses were seeing 60-90 day payment terms.

"We know that cash is king for small business and it was really hurting small businesses in our area," Mrs Lauga said.

"I think this is great news but there are still a number of other resource companies working in this region that need to follow suit and I'm calling on other companies, like Glencore, to consider their policies as well.

"BHP also needs to consider its local buy policy, which restricts supply from local businesses in the Rockhampton region, even though Rockhampton is the closest large centre to Blackwater's BHP mine.

"Businesses in Rockhampton are excluded from being able to provide services and supplies to BHP's Blackwater mine because it is excluded from the local buy policy, and that needs to be addressed."

Federal Member for Capricornia, Michelle Landry said the policy would benefit a great number of small businesses throughout Central Queensland and was part of a broader movement toward fairer treatment of sub-contractors in the mining sector.

"This is very welcome news and signals BHP's intent to continue their role as a good corporate citizen," she said.

"Small businesses are the back bone of our economy, but they can be fragile if not treated fairly by big business.

"The Parliamentary Inquiry uncovered some grave issues in the Bowen Basin's mining sector - one of the region's greatest sources of employment.

"I am very pleased to see BHP follow Peabody and Adani's lead ... it will mean a great deal for local businesses that have to fork out thousands each year in financing costs waiting for big jobs to be paid by mining houses."