The worse than feared hike in coal royalties recently announced in Queensland budget means more job losses, the risk of further mine closures, and the near certainty that numerous major new coal projects will not see the light of day, Queensland Resources Council Chief Executive Michael Roche said. “The Newman Government inherited from Labor the highest coal royalties in Australia but their own hike could see Queensland grab the dubious honor of being the highest taxing coal jurisdiction in the world,” Roche said. “The combination of company income tax and the new royalty rates will mean Queensland carries an effective taxation rate of 50% on a typical coking coal operation.”
Queensland’s tiered structure will charge 12.5% on coal prices between A$100 – A$150/metric ton (mt) and 15% on coal priced above A$150/mt. The current structure charges a 10% royalty on coal priced above A$100/mt.
Roche fears the new royalty structure would drive coal industry investment away from Queensland and into the arms of competitors. “For some existing high cost coal mines, the new royalty structure could be the final straw,” Roche said.
Roche also dispelled the notion that coal companies will be able to offset these new state taxes against federal Mineral Resource Rent Tax (MRRT) obligations. “The MRRT is a federal tax on super profits, and right now, it’s hard work to find a coal mine in Queensland making a profit, let alone a super profit,” Roche said.