‘Moving away from coal for 20 years’: Treasurer hits back at BHP

Queensland Treasurer Cameron Dick has questioned the reasoning behind mining giant BHP’s announcement it would shelve a $1 billion Central Queensland coal mine following the state’s controversial royalties regime.

Queensland treasurer Cameron Dick has doubled-down on his claim BHP’s shock decision to halt plans for a $1b coal mine is linked to the mining giant withdrawing from coal, and not as a result of the state government’s controversial new royalty tax.

A day after the company told the ASX it would pause plans on the Blackwater South metallurgical coal mine near Emerald, Mr Dick told the Queensland Parliament the state’s “coal industry is in good health”.

“Whatever decision BHP makes in relation to that project, it must be viewed in the context of BHPs 20-year process of withdrawing from coal,” Mr Dick said.

“It’s important to note that BHPs own documentation demonstrates the Blackwater South mine would not commence until 2029 … so a financial investment decision is many years away.

“I can also confirm that the Office of Queensland’s Co-ordinator-General have confirmed with BHP that they are proceeding with regulatory approvals at pace.”

BHP CEO Mike Henry made the shock announcement about the mine, which was predicted to create 2000 jobs, to the stock market on Tuesday as the global mining giant released its results for the year.

BHP Mitsubishi Alliance also noted in its results that it could close some mines earlier due to both the royalties increase and the long-term outlook for metallurgical coal shifting as key countries announce new climate policies.

BHP CEO Mike Henry. Picture: Supplied

But Treasurer Cameron Dick hit back, saying the company had been moving away from coal “for the last 20 years” and that the proposed project’s construction is not due to start until the end of the decade.

The Blackwater South metallurgical coal mine, near Emerald, is currently going through approval processes.

But Mr Henry said this should not be mistaken for a decision to invest.

“We’ve had the changes with the Queensland royalty regime, which were quite sudden, (and) didn’t involve any engagement with industry which has been a significant increase in the sovereign risk associated with Queensland,” he said during a press conference.

Queensland Treasurer Cameron Dick. Picture: NCA NewsWire / Dan Peled

“(It) has caused us to say, we really can’t deploy further capital into that business for the time being and we’ll go back and reassess what the plans for the business are going forward.”

The mine was expected to be a $1 billion investment, create up to 750 construction jobs and 1200 operation jobs over a 90-year life as it extracted coal for steelmaking, with a construction start date of 2029.

Mr Dick said he congratulated BHP and its workers for achieving record profits “thanks to Queensland coal assets”.

“While BHP has been moving away from coal mines for the last 20 years, other coal companies have already confirmed new bipartisan progressive coal royalty arrangements will not have an adverse impact on mining investment decisions,” Mr Dick said.

“BHP’s own submission to the Queensland Coordinator-General says construction on the Blackwater South project would not start before 2029, so a final investment decision would be many years away.”

BHP completed its sale of its 80 per cent stake in BHP Mitsui Coal to Stanmore Resources earlier this year.

It is the latest salvo fired at the Queensland Government over the royalty regime by BHP.

Mr Henry has previously warned the royalty changes “threatens investment and jobs”, while BHP Mitsubishi Alliance asset president Mauro Neves reached out to the Electrical Trades Union saying the tax would undermine the industry’s ability to deliver jobs.