BHP boss Edgar Basto issues jobs warning from coal royalties increase

The mining giant boss has added to a swelling wave of criticism over the state government’s sudden introduction of new coal royalties, saying Central Queensland will be the biggest loser.

BHP boss Edgar Basto has slammed the state government’s new coal royalty regime, warning the tax hikes will lead to a long-term jobs drain from Central Queensland.

“The Queensland government’s decision to impose a new tax on some of the state’s biggest employers without consultation is the antithesis of considered policy in Queensland’s interest or the national interest,” he said.

“It is a backward step and damages both Queensland’s and Australia’s reputation as a place to invest.

“Investment decisions about future developments and operations are made many years in advance and are heavily influenced by investment certainty – or the lack of it.

“So while the impact may not be felt for a few years, it will come as companies and investors look to invest capital elsewhere in Australia or overseas.

“That will mean less development, less local spending, less innovation, less training and fewer jobs.”

BHP president minerals Australia Edgar Basto, pictured in Moranbah. Picture: Contributed

Mr Basto’s blunt comments add to the criticism lobbed at the government from Japanese ambassador to Australia Shingo Yamagami, who warned the royalties could threaten Queensland’s reputation as a safe and predictable investment destination.

Mr Basto referenced Mr Yamagami’s comments and said “deep concern” over the royalties was widespread.

“We are hearing similar concerns from our project partners, industry peers, investors, customers and suppliers, as well as Central Queensland communities where the impact will be most acute,” Mr Basto said.

BHP mines for metallurgical coal at the Goonyella Riverside, Broadmeadow, Daunia, Peak Downs, Saraji, Blackwater and Caval Ridge mines in the Bowen Basin and has thousands of workers across Queensland.

The new royalty regime adds three tiers to the existing tiered structure, with companies to now pay 20 per cent on the dollar when coal prices exceed $175 per tonne, 30 per cent on the dollar when prices climb beyond $225 per tonne and 40 per cent when they exceed $300.

“Each of these new tiers applies only on the margin, so at a coal price of $302 per tonne, the 40 per cent rate would only apply to the last $2,” Treasurer Cameron Dick said on the release of the state budget in June.

“For a decade, multinational coal companies have benefited from royalty arrangements that have been frozen by successive Queensland Governments,” he said.

“Few industries in the world have enjoyed such a long period without change.

“It is time for new arrangements to be implemented … arrangements that reflect coal prices in excess of $500 per tonne, not the $150 per tonne for which the existing royalties were designed.”

The new tiers came into effect on July 1 and Mr Dick has defended the policy in the wake of mounting criticism.

Queensland Treasurer Cameron Dick speaks in parliament during budget week in June. Picture: Tertius Pickard

In budget week, Mr Dick argued the new royalties would help pay for better services in the regions, including the new Moranbah Hospital announced in the budget.

“Our new progressive coal royalties will fund new and better hospitals in regional Queensland, in places like Moranbah in the electorate of Burdekin,” Mr Dick said.

Mr Dick has also said the business relationship with Japan remains strong but his government had an obligation to funnel more of the state’s resource wealth to the people.

“Our relationship with Japan is one that’s strong, it’s valuable and it’s important and that’s been the nature of our relationship with Japan for many decades and it will continue to be a strong, valuable and important relationship for many decades to come,” he said.

“But the truth of the matter is these resources belong to the people of Queensland.

“The people of our state deserve a fair deal for their resources.”

Originally published as BHP boss Edgar Basto issues jobs warning from coal royalties increase