Largest Coal Company Warns Queensland Industry at Risk Under State’s Tax Policy

Queensland has what some in the resources industry dub the ‘highest taxes in the world.’

A digger loads a dump truck with coal in an open cut mine owned by Premier Coal in Collie, Western Australia, on June 24, 2024. Susan Mortimer/The Epoch Times

Australia’s largest coal producer has criticised the Queensland government for its insufficient industry engagement and negotiation and resource tax policies that it calls ““narrow-minded.”

Queensland has continuously raised taxes and royalties on mining, leading to criticism from those in the industry and foreign investors, including the Japanese government.

Most recently, it passed a law that royal rates cannot be altered without consideration by the parliament.

In an address to the Queensland Resources Media Club, BHP Mitsubishi Alliance (BMA) Asset President Adam Lancey described the Queensland government’s sudden policy and fiscal changes that were made without proper consultation as “unpredictable and unreasonable.”

He warned that this would put the whole mining industry in Queensland at risk and drive future investors away.

“Capital is global. It will flow to where the risk-returns ratio is most attractive,” he said. “Where governments act unpredictably and unreasonably, they increase risk for investment.”

He stressed that meaningful consultation is needed to strike the right balance on the rates.

So far, the Queensland government already enjoys compelling progressive coal royalties, which have been described by some in the resources sector as the highest taxes in the world. Fluctuation occurs during periods of high prices.

Lancey noted that the mining sector contributed over $116 billion to the state economy in the 2023 financial year.

Meanwhile, the Queensland government received $15 billion in coal royalties in 2022-23 and $9 billion in 2023-24.

“After the changes the government introduced—without discussion or consultation—an additional $9.4 billion has been collected from the coal industry,” Lancey said.

BMA was taxed more than 58 percent in Queensland.

Lancey compared the Queensland government with the New South Wales (NSW) government, saying they engaged in meaningful consultations with the coal industry to reach a good balance.

“When the NSW government proposed their own changes to coal royalty rates, they took the time to engage with industry and sought to understand the impact these changes would have,” he said.

Lancey described the recent policy decision as “short-sighted” and a “sugar-hit,” which would force major coal producers and investors to look elsewhere for more opportunities, such as Western Australia and South Australia.

He added that longer approval rates for mining extensions are another headache that can be solved by streamlining the process.

With Queensland state elections fast approaching on Oct. 26, Lancey called on the winning political party to have a meaningful discussion with the coal industry to develop better policies, especially regarding the tax area.

At this stage, the Liberal National Party is tracking ahead in the polls to win the election. If so, it will end Labor’s three terms in government.

According to Coal Australia, coal is reliable power that plays a pivotal role in steel production and aids in development and infrastructure.

Coal remained Australia’s second-largest export and contributed $99.3 billion (US$66 billion) to the national economy in 2022-23.

AAP contributed to this article.