Whitehaven Coal is the latest in a long list of coal companies expressing grave concerns about the impact of increased royalties on their business.
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 $1 billion in capital investment and 500-plus jobs.
Winchester South is the publicly-listed Australian company’s first development in Queensland and will primarily produce steelmaking metallurgical coal.
Whitehaven joins a raft of other companies speaking out against the Queensland Government’s decision to raise coal royalty taxes to the highest rates in the world.
Queensland Resources Council (QRC) Chief Executive, Ian Macfarlane, said 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,” Mr Macfarlane said.
“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.”
Mr Macfarlane said the additional royalty tax the State Government is telling Queenslanders the new regime will raise this financial year (from 1 Jul) has already been generated in the first six weeks, costing the sector about $18 million a day and totalling close to $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,” Mr Macfarlane said.
“It comes at a time our sector has been going from strength to strength because of strong commodity prices, which is what drives the Queensland economy and employment.”
On 16 August, Australia’s biggest mining company, BHP, announced it had paused its investment plans in Queensland due to the sudden increase in State Government royalty taxes.
Mr 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,” Mr Macfarlane 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 $7 billion in royalty taxes – which is four times as much in royalty taxes compared to the previous year,” Mr Macfarlane said.
Under the new system, royalty taxes paid by coal producers this financial year will rise to around $16 billion. Once gas and metal royalties are included in this figure, the total amount of resources royalties to be collected by the Queensland Government will reach about $18.3 billion.
“As commodity prices go up, so do royalties – that’s how the previous system worked,” Mr Macfarlane said.
“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.”
Other mining companies that have spoken out against the Queensland royalty tax increase include Vitrinite, Coronado Global Resources, Bowen Coking Coal, Bravus Mining and Resources, and Anglo American. Click here to read their statements.
