A coal industry "crisis" has led to hundreds of job cuts and a long-running mine to be mothballed, sparking criticism of a controversial royalty scheme.

BHP Mitsubishi Alliance has been branded "un-Australian" by the Queensland government after announcing the layoffs, with a union accusing the mining giant of spreading fear.

The alliance took aim at Queensland's coal royalty scheme after confirming 750 job cuts across the state and its decision to place a Bowen Basin mine into care and maintenance from November.

"These are necessary decisions in the face of the combined impact of the Queensland government's unsustainable coal royalties and market conditions," alliance asset president Adam Lancey said on Wednesday.

"The simple fact is the Queensland coal industry is approaching a crisis

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