Coal Australia boss Stuart Bocking says LNP making ‘right noises’ over Queensland royalties

The coal sector’s peak body says it is having ongoing discussions with the Queensland government as it seeks to roll back a bruising royalty scheme.

Labor’s controversial decision to effectively tax coal super profits helped rake in $15.3bn in revenue in 2022-23 – five times more than expected.

The coal sector’s peak body has ramped up its lobbying efforts to roll back the bruising Queensland royalty scheme introduced by the previous Labor administration.

Coal Australia chief executive Stuart Bocking said the sector was working constructively with the LNP government to get them to better understand some of the impacts of the “unsustainable” royalty regime.

“It is early days in terms of their time in office but what I would certainly say is that they want to see the sector thrive,” he said.

Mr Bocking said state Resources Minister Dale Last “had been very, very good” and there were “some very positive noises from Premier David Crisafulli about the importance of coal mining”.

“So they’re certainly making all of the right noises, which is very important, and we’ll continue to consult and work constructively with the government,” he said.

“It was the previous Labor government that introduced (the hike) and I think ultimately this is an issue for (state) parliament to deal with. They’ve all got to come together and perhaps recognise that some mistakes were made.

“We didn’t consult properly and the sector is now hurting because of rising production costs.”

Mr Crisafulli said last month that the Queensland coal industry could expect a smoother approvals process and no policy surprises, but it was sticking with the controversial royalties regime. The LNP had repeatedly promised to not make any changes to revenue-raising coal royalties in the first term of government.

Labor’s controversial decision to effectively tax coal super profits helped rake in $15.3bn in revenue in 2022-23 – five times more than expected – with the royalties from coal dropping to $5.8bn in 2024-25, according to the mid-year budget update.

Mr Bocking said the royalty scheme combined with rising production could send some operators to the wall.

Bowen Coking, headed by veteran Queensland coal miner Nick Jorss, entered a trading halt this month after saying depressed coal prices and the royalty scheme implemented could force it to temporarily shut its flagship Burton mine west of Mackay. At risk would be 500 jobs.

Coal prices have fallen 21 per cent in the quarter of this year, reflecting weak import demand from key markets including China and India. That is increasingly impacting the bottom line of Queensland operators such as Bowen Coking.

“We’re already seeing instances where mines have closed,” he said. “BHP has been very forthright in saying there’ll be no new investment from them in Queensland, whenever the royalties remain where they are. Obviously, the Burton mine has also been under very heavy pressure.

“So the scenario is that this is an unsustainable regime that needs to be fixed. Now, my view is that the LNP government is the government, but frankly, this is an issue for the Queensland parliament.”

Mr Bocking said regional towns such as Emerald, Middlemount and Moranbah not only rely on mining but many associated smaller businesses are dependent on those mines. “As soon as they start to pull back, those knock-on effects are felt very, very dramatically,” he said.

He said Queensland now had the highest mining royalty rates anywhere in the world, with companies losing money but still paying royalties to the government. “What the regime simply hasn’t taken into account is the sharp rise in the cost of production,” he said. “You can look at some of these ventures that are losing money and potentially not paying income tax but they’re still required to pay royalties because the royalties are levied on sales revenue rather than on profits.”

Originally published as Coal Australia boss Stuart Bocking says LNP making ‘right noises’ over Queensland royalties