The New South Wales Government has announced that if reelected, it will freeze coal royalties for the duration of the national coal price cap, relieving the state’s coal producers from the impacts of the policy.
The suspension of royalties means that coal mining companies in New South Wales will be exempt from any rate hikes until June 2024.
New South Wales Deputy Premier, Paul Toole, announced the commitment, stating he was confident that the decision would not impact the budget.
“Coal is generating billions of dollars back to the NSW economy … that goes towards hospitals, police, education,” Mr Toole said.
“I’m confident that it’s not going to be impacting on them.
“We know that there are record prices when it comes to thermal coal for exporting at this point in time, so we know that there is more going back into NSW.”
Mr Toole said the decision would provide security to coal mining companies during the price cap and state-imposed coal reservation policy.
“I want to make sure that those businesses that are directly or indirectly associated with coal in this state have certainty,” Mr Toole said.
“Coal mining is significant, it employs a lot of people in these areas and it helps drive economic activity.”
New South Wales Mineral Council CEO, Stephen Galilee, has welcomed the move.
“The commitment will be welcomed by coal mining families and communities across NSW, and it is hoped it will receive bipartisan support ahead of the approaching NSW election,” Mr Galilee said.
The commitment also coincides with the release of the mid-year New South Wales Budget Update, showing mining royalties expected to deliver $6 billion in revenue to the State Government in this financial year.
“This is $2 billion higher than previous Treasury forecasts, representing a significant windfall for the NSW Government this year due to high global coal export prices,” Mr Galilee said.
“The current royalty rates are clearly working to deliver higher returns for the people of NSW when global coal prices are higher.”
New South Wales mining royalty revenues have grown in recent years, rising from $1.4 billion in 2020-21 to $3.7 billion in 2021-22, and now to $6 billion in this financial year.
This means mining royalties are set to contribute six per cent of total New South Wales Government revenues this financial year, up from 1.6 per cent in 2020-21.
