PERTH (miningweekly.com) – Coal miner Whitehaven Coal has joined the chorus of discontent around the Queensland government’s decision to increase coal royalties in the state.
Whitehaven this week said that the company did not support the changes to the royalty rates, saying it undermined Queensland’s reputation as an investment destination.
In response to a query at the company’s June quarter results, MD and CEO Paul Flynn said it was difficult to speak "too nicely" about the rate hike.
“I think that’s very negative one way or the other [and] the lack of consultation and just the dramatic nature of it; it’s clearly not a royalty, it’s a tax. So, look, we hope certainly there’s no change to the position in New South Wales and we’ll be making sure that the New South Wales government leading up to the election in March next year understands the critical role that the resources sector plays in New South Wales and the need for further investment requires certainty in that regard.
“So, the unpredictable nature of things such as [what has] occurred in Queensland, don’t really foster the confidence necessary to commit billions of dollars in capital to the likes of projects that this industry typically spends,” he added.
Whitehaven has been developing the Winchester South open-cut coal mine project near Moranbah in Central Queensland since the beginning of 2019, which involves nearly A$1-billion in capital investment and 500-plus jobs.
Winchester South is the company’s first development in Queensland and will primarily produce steelmaking metallurgical coal.
Queensland Resources Council (QRC) CEO Ian Macfarlane said Queensland Treasurer Cameron Dick’s continued claims that consultation about the royalty increases took place with industry are incorrect.
“The Treasurer needs to look up the definition of consultation. Simply telling the QRC or a coal company that rates are going up – just before they were announced in the budget and without providing any details about the scale of the increase – is not consultation.
“After months of trying to secure a meeting with the Treasurer to discuss royalties, when we finally got in to see him, we were told the increase was happening and that was it. There was no opportunity for negotiation or discussion about the impact on our industry.”
Macfarlane said the extra amount of royalty tax the state government is telling Queenslanders the new regime will raise this financial year has already been generated in the first six weeks, costing the sector about A$18-million a day and totalling close to A$800-million so far.
“This is an astronomical amount of money to rip out of the resources sector in a short space of time. It’s a terrible situation to have been placed in by our own state government,” he said.
“It comes at a time our sector had been going from strength to strength because of strong commodity prices, which is what drives the Queensland economy and employment.”
Diversified miner BHP earlier this week announced plans to pause investment in Queensland on the back of the royalty hike, and said that the end of its coal operations in Queensland could be "earlier than anticipated".
Macfarlane said the Queensland government has harmed Queensland’s international reputation as a safe place to invest in resources projects.
“Coal companies, large and small, are saying to us they’re going to have to put a hold on investments for now and see what happens with the state government around royalties,” he said.
“There was no need for the government to impose a ‘super tax’ on coal because Queenslanders were already benefiting from higher coal prices under the previous royalty regime.
“Under the previous system, last year Queensland coal companies paid more than A$7-billion in royalty taxes, which is four times as much in royalty taxes compared to the previous year,” he said.
“As commodity prices go up, so do royalties, that’s how the previous system worked.
“The state government is effectively killing Queensland’s golden goose – the resources sector – and placing at risk the economic and employment future of the state.”