BHP boss lashes Qld over coal royalty hike

Two global mining giants have declared they will pull investment from Queensland over the state government’s coal royalty hike.

Mining giants BHP and Anglo Coal has delivered fierce attacks on the Queensland government’s coal royalty hike, saying it has made the state unpredictable and unstable for investors.

BHP chief executive Mike Henry, in a fiery speech at the World Mining Congress in Brisbane witnessed by global resource heavyweights, warned the impacts of making Queensland a risky place to do business will extend past coal and into critical minerals — held by the state government as the “next mining boom”.

“We will not be investing any further growth dollars in Queensland under current conditions,” he said.

Mr Henry’s comments were backed by Anglo American chief executive Duncan Wanblad, who also spoke at the conference on Tuesday.

Anglo also has a big coking coal business in Queensland. While the company has not joined BHP in threatening to quit investing in the state, speaking on the sidelines of the Congress, Mr Wanblad said the royalty hikes would certainly have an impact on Anglo’s future investment decisions.

“It is not just a principle issue – like this is the highest tax jurisdiction in the world, and therefore we won’t be investing anymore. It’s just actually that we will invest where we can get the best returns for the shareholders,” he said,

“That’s the ultimate stop in terms of investments, whether the returns can be won at a reasonable risk profile or not.”

The state government’s controversial decision to hike coal royalty rakes amid historic high prices took centre stage at the global convention, overshadowing Premier Annastacia Palaszczuk’s announcement of a new critical mineral strategy.

The BHP boss wasn’t the only one to take a jab at the state government’s royalty regime, with the Minerals Council of Australia also decrying “short term tax grabs” as a path to “long-term failure”.

Mr Henry praised the policies of certain states and the federal government’s new critical minerals strategy, but warned other actions of governments were making the nation “less competitive”.

He singled out Queensland’s royalty rate hike in 2022 as an example of government’s acting “unpredictably and unreasonably” to the detriment of investment in the long term.

“No industry engagement, no effort to understand and no interest in understanding,” Mr Henry said.

BHP CEO Mike Henry said BHP would not invest “any further growth dollars in Queensland under current conditions”. Picture: Thomas Graham

“The outcome and the process have meant for BHP that we have opportunities to invest for better returns and lower risk elsewhere around the world, as well as here in Australian states like Western Australia and South Australia.

Ms Palaszczuk shrugged off BHP’s criticism by underlining investment in the state had increased in recent times, and Queensland’s export market was increasingly healthy.

She said there were other companies willing to invest and the state had an “abundance of minerals” which the world wanted.

There is an estimated $500bn in resources stored within the Mount Isa-centred North West Minerals Province.

But Mr Henry warned Queensland wasn’t in the “box seat” to take advantage of the critical mineral mining boom as it had other commodities like metallurgical coal, and what was needed was the right “policy settings”.

This entailed making the state economically attractive and lower risk, and if that wasn’t done “pretty quick smart” the opportunity “will pass us by and you’ll see capital flowing to other (nations)”.

A whopping $15.3bn coal royalties windfall — three times what the government had expected — helped pay for relief measures in the latest state budget, including at least $550 in energy rebates for every Queenslander.

Overall the coal royalties changes will rake in $7.2bn for the state over four years, up from the $1.2bn Treasury had initially forecast in last year’s budget.

Rivers of coal gold delivered Queensland the biggest budget surplus of any state government anywhere in the nation — at $12.3bn — in the 2022/23 financial year.

Treasurer Cameron Dick has been spruiking the government’s coal royalties decision — telling the World Mining Congress in his speech on Monday that it was supporting the transition to clean energy.

He also said the cash had helped “cut state debt” and pointed to a monthly business survey from NAB which showed Queensland continued to enjoy the “strongest business conditions” among the big three states.

Under the state’s strategy, miners trying to find Queensland’s next untapped critical mineral-rich vein can do it rent free for the next five years.

This would save a project like the Richmond-Julia Creek Vanadium Project about $75,000 a year. The project 45km northwest of Richmond is expected to create about 100 construction and 200 operational jobs.

The move will cost the Queensland government $55m in forgone revenue.

Meanwhile, BHP has also used the World Congress of Mining to take a swipe at the Federal Labor government as it refused to deny jobs cuts to “future-proof” its business.

BHP Queensland coal boss Mauro Neves confirmed the company could reduce its workforce across the Bowen Basin as it grapples with controversial Same Job Same Pay reforms.

But Mr Neves, who spoke alongside BHP CEO Mike Henry in Brisbane, said rumours of 1300 imminent job cuts at its mines were “inaccurate”.

“We are always looking at opportunities to be more productive, I won’t deny that,” he said.

“But there is nothing like those numbers.

“There is no announcement to be made, it is just the natural course of business.”

The Same Job Same Pay reforms going through federal parliament aim to end pay discrepancies between labour-hire and direct hire workers on mine sites.

Mr Henry has said the measure would add some $1.3bn to its yearly wages bill.

Mr Neves said the reforms were not “natural”.

“We are continuously looking at opportunities to grow productivity and legislation should foster that productivity, should create flexibility, (and) should recognise pay levels are related to experience and productivity,” he said.

“Different workers have different productivity in the workforce, that is the very nature of everyone’s job.

“Any legislation that tries to defeat what is the natural course of business, is not helpful and doesn’t drive productivity.”

In Queensland, BHP operates the Daunia, Blackwater, Broadmeadow, Goonyella, Caval Ridge, Peak Downs and Saraji mines with a complex mix of labour-hire and direct-hire workers.

The ratio between the two changes from site-to-site but out of Goonyella’s roughly 2500 employees, it is understood some 1000 are direct-hire while 1500 are a drawn from BHP’s Operational Services provider, labour-hire companies and contractors.

Mining and Energy Union Queensland district president Stephen Smyth said BHP needed to engage with the union before implementing major workplace changes.

“I think at this point it (job cuts) is a rumour,” he said.

“But who knows what they are going to do.

“They (coal companies) are that ruthless, to make a point, they would lay off workers over Same Job Same Pay,” he said.

Industrial Relations Minister Tony Burke has been contacted for comment.

Originally published as BHP boss lashes Qld over coal royalty hike