Prime Minister Tony Abbott says coal shouldn’t be demonised because it is vital for the future growth and prosperity of the world.

Prime Minister Tony Abbott has declared that coal is good for humanity at the opening of a new Queensland mine, talking up the resource’s future after China’s shock decision to impose a tariff on Australian coal.

“It’s very important that we sustain our faith in coal,” Mr Abbott told BHP workers and dignitaries gathered for the official opening of the Caval Ridge mine, southwest of Moranbah, on Monday.

“Coal is vital for the future energy needs of the world. Energy is critical if the world is to continue to grow and prosper,” Mr Abbott said.

“So let’s have no demonisation of coal.

“Coal is good for humanity. Coal is good for prosperity. Coal is an essential part of our economic future here in Australia.”

The $4 billion open cut mine will export up to 5.5 million tonnes of hard coking coal per year, exported from the Hay Point terminal, some 200km from the active site.

China has made a surprise decision to introduce a levy on Australian coal, reportedly a three per cent tariff on coking coal imports and six per cent on lower grade thermal coal, to boost its local industry.

Mr Abbott said it highlighted the importance of free trade negotiations with China, which he hoped to “land” at or before the G20 summit in Brisbane in November.

The mining giant remained profitable but the tariff was “concerning”, BHP Billiton’s coal president Dean Dalla Valle said.

“It’s something we’re watching closely, I have to say we’re disappointed,” he said.

But he said it was too early to tell what impact the tariff may have on the company and the industry.

The Caval Ridge mine has attracted criticism over its 100 per cent fly-in fly-out workforce of over 500, drawn from Brisbane and Cairns.

The region was still reeling from BHP’s recent decision to cut 700 permanent jobs from across the Bowen Basin, CFMEU mining and energy district president Stephen Smyth said.

But of BHP’s eight Bowen Basin mines, two adopted a fly-in fly-out workforce while the remaining six employed locals, Mr Abbott said.

Mr Dalla Valle said each of the Bowen Basin mines needed to compete globally.

“It’s very difficult. These decisions to actually downsize and to make sure that each mine stays competitive, because if a mine’s not competitive, then job security is not present.”