3rd Coal Miner Threatens to Downscale Operations in Queensland, Hundreds of Jobs at Risk

QCoal is the latest miner moving to cut back operations in response to Queensland’s high mining royalty scheme.

Coal is stockpiled before being loaded on to ships at the RG Tanner Coal Terminal in Gladstone in Queensland, Australia on Jan. 20, 2012. The Terminal plays a vital role in delivering coal supplies to foreign markets. AAP Image/Dave Hunt

Independent Queensland mining company QCoal has announced it will close one of its two underground units at the Cook Colliery near Blackwater in the state’s Bowen Basin.

The announcement comes amid a difficult week for the state’s mining industry with hundreds of jobs potentially at risk after two other companies said they would close down projects.

Just on Sept. 18, Anglo American announced it would cut its workforce by 200 positions, and a day earlier, BHP said it would scrap 750 roles.

All companies have blamed Queensland’s elevated mining royalty fees for making it unsustainable to continue mining in the state.

Under the previous Queensland Labor government a new complicated mining royalty scheme was introduced targeting coal production in the state amid higher global commodity prices and as the state’s debt continued to grow.

It meant coal (thermal and metallurgical) produced from July 1, 2022 would be taxed at progressively higher rates depending on where global prices were: under $100 per tonne, over $100, over $150, over $175, over $225, or over $300.

If coal prices were to increase to over $300 per tonne, it could attract up to six tiers of taxes from 7 percent per tonne, up to 40 percent per tonne.

The then-Miles Labor government openly stated it had shored up the rules to make it difficult for any subsequent government to repeal, requiring “parliamentary consideration.”

QCoal Says $25 Million Already Paid Despite No Profit

QCoal says its Cook Colliery has paid $25 million in royalties to the Queensland government since its March 2022 reopening despite never making a profit.

The mine has changed hands a number of times in recent years, with previous owner Caledon Coal Group being put into liquidation in 2017.

Bounty Mining then purchased the project before QCoal took over in 2020, reopening the sites two years later.

QCoal says the move to close a unit was a “measured reaction” to increased costs and market pressures.

“Unfortunately Cook Colliery has been affected by high production costs, high taxes and royalties and low coal prices and its ongoing operation at its current levels is unsustainable,” a QCoal spokesman said on Sept. 19.

The company says consultation with workers will take place over the coming weeks.

Cook Colliery is operated by Core Crew on behalf of QCoal and employs about 170 workers.

Core Crew says consultations may result in redundancies and changes to existing positions.

Following BHP’s announcement, Queensland Treasurer David Janetzki confirmed to The Epoch Times that the government would not seek to change the state’s mining royalties regime.

However, federal Nationals Senator Matt Canavan has called for a review.

“The worry now is that more jobs could be lost the longer we keep the world’s highest taxes on coal,” he said following BHP’s announcement.

“Governments have become addicted to the revenue, but if the mines shut, 40 percent of zero equals zero,” he said.

The Epoch Times contacted the Queensland government regarding QCoal’s announcement.