Queensland’s newly announced royalty hike on coal could potentially halt investment attractiveness for other commodities produced in the state, such as cobalt, nickel, copper and rare earth elements, the Minerals Council of Australia (MCA) warns.
A 10-year royalty freeze for coal royalties in the Australian state will be ended on 30 June, to enable new “progressive” royalties “for record Queensland coal prices,” the state government has said. Instead of a 15% royalty rate, there will be a three-tier rate (20%, 30% and 40%) depending on coal prices, Kallanish notes.
“The blatant resources royalty grab will cost investment and jobs,” says MCA’s ceo Tania Constable. “This tax grab is short-sighted and counterproductive over the long term and has the potential to scare off investors in all commodities … Stable and internationally competitive tax regimes are critical to ensuring mining investment continues to grow.”
Constable claims Queensland is the highest taxing mining jurisdiction in the world, with a 40% royalty on revenue together with Australia’s 30% tax on profit. She suggests Queensland’s move will have an impact in the entire Australia mining industry, which already is facing “significant competition” from emerging mining regions in Africa and traditional mining centres in South America and Canada to attract investors.
“While Australia has an established comparative advantage in mining exports, future investment in new mining and minerals processing operations is not guaranteed,” she concludes.
Separately, Queensland Resources Council (QRC)’s ceo Ian Macfarlane also warned the decision “will hit regional communities and businesses hard, as companies are forced to rethink their future investment and employment plans.”
He adds the “misguided policy” will make the sector less internationally competitive.
More free articles from our archive
More Global Prices
Take a Free trial
Get daily steel news redirect to your inbox each day,
along with prices.