Experts warn over impact of Queensland coal royalties regime on Indian energy security
Queensland's controversial coal royalties regime has triggered warnings from Indian experts that the nation must wean itself off the Sunshine State’s coal.
Hot on the heels of Premier David Crisafulli’s trade trip to India, an opinion piece in an influential Indian newspaper warns that the country must wean itself off Queensland met coal because of the impact of the controversial royalties regime.
A decent chunk of the premier’s trip to India was actually spent spruiking the state’s metallurgical coal credentials with the world’s most populous nation’s growth potential obvious to all.
But in an opinion piece in the Hindu Business Line newspaper by Simon Nicholas and Saumya Nautiyal from the Institute for Energy Economics and Financial Analysis puts it in an Indian perspective.
They say about 90 per cent of its met coal needs are imported, and about half of that currently comes from Australia, of which almost all of that from Queensland, which is an energy security concern for India.
They quote data analytics firm Wood Mackenzie warning that Australia requires over 100 million tonnes per annum of new hard coking coal mine capacity by 2050 to avoid a supply shortfall.
“A factor threatening to worsen this shortfall is Queensland’s contentious progressive royalty regime, introduced in 2022, under which royalty rates increase with the price of coal,” they say.
BHP, Whitehaven and Peabody have been vocal in their opposition with BHP recently saying it won’t invest any “growth capital” into Queensland because of the coal royalties.
Nicholas and Nautiyal say India is well aware of the mounting energy security risks, and is exploring new ways to diversify its coking coal supply.
“To manage supply risks, India’s steelmakers are investing in overseas mines while also scaling domestic production under the government’s Mission Coking Coal,” they say.
“In the long run, India must cut its reliance on coking coal and consider alternative technology routes.
“The government is already developing a scheme to incentivise secondary steel producers to recycle scrap steel in electric arc furnaces, which can reduce reliance on met coal. Further, India can invest in green hydrogen-based direct reduced iron in the long term.”
Surely, a warning about killing the golden goose?
Leasing spat
The managing director of independent tenant representation company PPA Partners Gavin Farmer has taken aim at the office leasing sector claiming that many so-called “tenant advisers” are secretly acting as agents for landlords.
In a stark warning to commercial property players, he says the situation exposes C-Suite executives and their boards to significant probity and audit risk.
“Too many organisations are unknowingly engaging advisers who are commercially tied to builders, landlords or fit-out contractors,” Farmer says.
“That’s not advice – that’s sales in disguise. When the same firm or its related entity represents both sides of a transaction, every element of independence and governance goes out the window.”
According to internal industry estimates based on commercial transaction data and advisory relationships provided by Farmer, about $200m plus in annual lease transactions are influenced by conflicted advisory structures across SEQ.
Farmer says the issue has reached a critical point in Brisbane’s commercial property market, particularly as organisations renegotiate leases or restructure office space in the post-pandemic cycle.
“True tenant representation means you’re never paid by a landlord, never linked to a fit-out provider, and never incentivised to steer the client toward a predetermined outcome.”
More Coverage
Originally published as Experts warn over impact of Queensland coal royalties regime on Indian energy security
Reserve bank keeps rates on hold
