The $27b mining injects into Qld as royalties war escalates

Mining and resources projects pumped $27bn into Queensland businesses across the past financial year, amid a war over royalty tax increases.

Mining and resources projects pumped $27bn into Queensland businesses across the past financial year, amid a war with the state government over royalty tax increases.

A Queensland Resources Council report revealed more than three in every four dollars of purchases made by mining and energy companies in the 2021-22 financial year was spent with a business in Queensland.

The new data, released exclusively to The Courier-Mail, reveals 77 per cent of all purchases by 57 QRC member companies last financial year was spent locally, totalling $26.8bn.

However, the figure is $900m lower than last year’s record 82 per cent result.

The companies spent $34.9bn on goods and services across the 12 months, with $7.6bn or 22 per cent spent interstate or in New Zealand and $500m or 1.5 per cent on overseas purchases.

QRC chief executive Ian Macfarlane said companies made a “concerted effort” to spend locally and support Queensland businesses.

“There’s no better way to build a strong social license to operate with the Queensland community than for resources companies to provide opportunities for local businesses to be part of our industry’s extensive supply chain,” he said.

“Local suppliers are absolutely critical to the long-term success of the resources sector because they understand our needs and can collaborate with companies on improvements, often at lower cost than other suppliers.

“Using local suppliers reduces transport costs, minimises greenhouse gas emissions and offers better supply chain resilience, which we’ve seen the value of during periods of global disruption due to the pandemic.”

Mackay Resource Industry Network chair Tim Magoffin said the report proved the importance of the resource sector in regional Queensland.

Davin Bretherton (front) with Daniel Gilbert and Michelle Huwiler at Wulguru Rail Maintenance

“These individual businesses have invested heavily to make sure that these dollars stay in Queensland,” he said.

“The new state government royalty scheme has potential to discourage the long-term investment that drives this economic activity.

“It’s another reason for the government to be careful not to kill the goose that continues to lay the golden eggs.”

Wulguru Group director Bob McKay runs a heavy engineering company in Townsville, and said mining and resources projects were critical to his business’s viability.

“The prosperity that those companies provide flow on to other businesses that work with us so it's an important part of the local economy and our business,” he said.

Mining and energy companies also spent $93.8m with 108 Indigenous businesses in Queensland across the financial year, a 13 per cent increase compared to the previous year, according to the QRC.

The state’s peak resources council has been engaged in an escalating war against the state government over changes to royalty taxes in the June 2022 budget.

While the council has warned future investment is at risk, Treasurer Cameron Dick argues the royalties belong to Queenslanders and will help fund critical services

Mr Macfarlane said the outlook for expenditure in the mining sector remained strong, with almost one quarter of chief executives revealing they expect to increase spending with local suppliers over the next 12 months, and 6 per cent of CEOs expecting it to decrease.

“This is a clear sign local suppliers who rose to the challenge during Covid-19 are using their increased capabilities to push for new opportunities to provide goods and services to Queensland’s mining and energy sector,” he said.