‘Threatens jobs’: BHP’s damning assessment of QLD’s tax hike

One of the world’s biggest miners has savaged Queensland’s royalties hike as ‘threatening jobs and investment’, sparking speculation around the future of the state’s mines.

The future of central Queensland mines is at risk, raising the spectre of early closures, as one of the world’s biggest mining companies warns the state government’s new royalty regime “threatens investment and jobs”.

A damning assessment of the controversial new tax scheme was contained in BHP’s end of year operational review.

In his first statement on the royalties hike, the mining giant’s CEO Mike Henry said it was “near tripling of top end royalties” in what he called “already one of the world’s highest coal royalty regimes”.

BHP chief executive officer Mike Henry. Picture: Aaron Francis/The Australian

Mr Henry warned the company was assessing just what the hike would do to the life of its mines.

“BHP is assessing the impacts on (BHP Mitsubishi Alliance) economic reserves and mine lives as a result of the increase in coal royalties by the Queensland Government,” Mr Henry said.

BHP’s end of financial year operational report found coal mining production dropped almost 10 per cent in the past financial year, due to significant wet weather and Covid absenteeism.

This is despite average coal prices of $347 a tonne for metallurgical coal and $366 a tonne for hard coking coal, increases of 225 per cent on the previous financial year.

Under the scheme announced at the budget, companies now pay 20 per cent on the dollar when prices exceed $175 per tonne, 30 per cent on the dollar beyond $225 per tonne and 40 per cent when they exceed $300.

In a sign of continued anger from the industry at the royalty hike, the report stated the move would discourage investment, operational growth, job creation and local business spending across the state.

“The new tax damages Queensland’s reputation as a stable place to invest, and will make it harder for the state to compete against other global jurisdictions in attracting major new investments that would deliver longer term value to communities and the state economy,” the report stated.

Queensland Treasurer Cameron Dick. Picture: NCA NewsWire/Tertius Pickard

Treasurer Cameron Dick has previously defended the scheme, saying the resources sector is booming and the companies will still enjoy high profits.

“If prices go higher, any additional royalties generated would only be a fraction of the additional profits that coal companies would enjoy,” he said earlier this month.