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‘Sugar hit’ coal royalties scaring investors away, BHP boss warns

18 Nov 2024

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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 has warned.

BHP Australia president Geraldine Slattery told a Brisbane business leaders’ forum on Monday that Queensland’s coal royalty scheme was the world’s highest, making investment in the Sunshine State a difficult decision.

BHP has five metallurgical coal mines in Queensland – the state that accounts for 56 per cent of the nation’s coal production.

The Goonyella Riverside coal mine in Queensland.Credit:Peter Braig

Royalties have propped up state government coffers since they were reintroduced by the former Labor government 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. The LNP has also committed to the scheme in its four-year forward estimates.

However, Slattery warned the tax scheme would not benefit Queensland in the long term, and would discourage investors 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 told the Queensland University of Technology forum.

BHP’s Geraldine Slattery.Credit:Oscar Colman

“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.

“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. The mining giant’s chief executive Mike Henry told the company’s annual general meeting last month the tax made the state unattractive for investment.

Henry said it was driving the company to work overseas in Chile and other Australian states where it was 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.