‘Alarm bells ringing’: Coal royalty hike to net additional $5 billion

With Queensland’s controversial coal royalty hikes projected to reap six times more than what was forecasted when the government raised the rates, there are concerns regional communities are at risk.

Controversial coal royalties hikes are forecast to reap an additional $5 billion this year, six times what the Queensland Government forecast when it raised the rates, prompting accusations regional communities are at risk.

Queensland Resources Council boss Ian Macfarlane will make the claim on Thursday in Moranbah as the lobby group steps up its campaign against the tax hike.

It follows the outgoing Japanese ambassador Shingo Yamagami last week warning the Japanese companies were now worried about sovereign risk when investing in Queensland for the first time.

Queensland Resources Council's Chief Executive Ian Macfarlane. Picture: Zak Simmonds

Mr Macfarlane said analysis of data from the Office of the Chief Economist’s quarterly report estimated the current coal boom would mean $5 billion in additional royalties will be raised this financial year, instead of the $800 million originally forecast.

“Alarm bells should be ringing for the State Government and for every Queenslander,” he said.

“No industry can withstand such a heavy-handed and sudden tax impost, not even an industry as resilient and significant to the Queensland economy as the coal sector, which represents about 60 per cent of our exports.”

The Chief Economist’s quarterly report found that metallurgical coal prices in recent months had lifted to their highest level since mid-2022, as steelmaking around the world picked up.

It found metallurgical coal export earnings nationally surged from about $24 billion to $72 billion in 2021-22 and were on target to remain well over $60 billion this financial year.

Coal at the Port of Brisbane. Picture: AAP image, John Gass

Mr Macfarlane said without increased royalties, the coal sector still would have contributed $8.3 billion to the state’s coffers but it was now likely to be more than $13 billion.

“When prices are high, the amount of royalties paid by companies increases. That’s how the previous system worked, and it was working well for Queensland,” he said.

He said the impact would be felt in regional communities reliant on coal in five to 10 years as the pipeline of investment dries up.

Mr Dick has previously said coal companies were making “super profits”, with prices soaring in the wake of Russia’s invasion of Ukraine, and that Queensland residents were entitled to a fair share of this.

Australia’s coking coal price reached an average of US$377 a tonne in 2022, but this is expected to fall back to US$160 a tonne by 2028, according to the Office of the Chief Economist’s quarterly report.