Mining boss warns Queensland on coal royalty impacts
The head of mining giant BHP has warned Queensland’s steep coal royalties are a short-term “sugar hit” that discourages investment in the Sunshine State.
The billions of dollars generated by Queensland’s hefty coal royalty rates are a short-term “sugar hit” that isn’t in the state’s long-term best interests, a mining boss warns.
BHP Australia President Geraldine Slattery says Queensland’s coal royalty scheme is the highest globally – 43 per cent more than other jurisdictions – making the Sunshine State a difficult investment decision.
Queensland is the coal capital of Australia, accounting for 56 per cent of the nation’s production.
Progressive coal royalty tiers were legislated by the former Labor government and the Liberal National Party government has also committed to the scheme in the four-year forward estimates.
BHP has five metallurgical coal mines in Queensland with royalties propping up state government coffers since being reintroduced in 2022.
In 2022-23, the coal royalties delivered a $15 billion return to Queensland’s budget while in 2023-24 it was $9 billion.
Slattery warned the tax scheme will not benefit Queensland in the long term but will discourage investors who are seeking more cost-effective alternatives.
“The sugar hit of revenue won’t leave the state better off in the long run if investment is driven elsewhere,” she will tell the Queensland University of Technology’s business leaders’ forum on Monday.
“In this, I am not advocating for policy critique for the sake of it – rather I am suggesting that a partnership approach between business and policymakers will likely create better outcomes for all.
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“But it starts with making our views known in a respectful way, rather than grumbling on the sidelines.”
It is not the first time BHP has come out swinging against the state’s coal royalty scheme with the mining giant’s chief executive telling the company’s annual general meeting last month the tax makes the state unattractive for investment.
Mike Henry said it was driving the company to work overseas in Chile or in other Australian states where it’s cheaper but he hoped future governments would reconsider the scheme.
The Queensland government has previously confirmed it was committed to progressive coal royalties, which require parliamentary intervention to be changed, over the next four years.
“We will retain coal royalties across the forwards as repeatedly promised,” Treasurer David Janetzki said before the October state election.
