‘New royalty burden killing investment’: But demand for Qld commodities high

Mining and energy companies remain confident about continued strong demand for Queensland’s commodities, despite policy and regulatory uncertainty.

Mining and energy companies remain confident about continued strong demand for Queensland’s commodities.

But around three quarters of CEOs say the predicted impact of royalties over the next five years had decreased the likelihood of investment into expansion plans and new projects.

This story is part of The Courier-Mail’s special Future Queensland: Resources series that reveals the truth about the contribution the much-maligned resources industry makes to Queensland. You can read all of our coverage on the special topic page here.

The Queensland Resources Council’s latest quarterly State of the Sector report gauging industry sentiment has found that government policy and regulatory uncertainty remains the biggest concern for the state’s resources sector for the third consecutive quarter.

It found 77 per cent of CEOs said the impact of coal royalties had decreased the likelihood of expansions at their existing operations – a significant increase on the 54 per cent in July 2022.

More than three quarters of CEOs also said the likelihood of new projects had decreased, up from 62 per cent in 2022.

“New royalty burden is killing investment,” one CEO said.

“Full capital strike on any expansion activities, sustaining capital only,” another said.

The QRC’s survey gleaned responses from about 30 chief executives of medium to large resource companies.

QRC CEO Janette Hewson said industry concerns about the damage being caused to the state’s reputation as a stable place to invest by inconsistent regulation and sudden policy changes, particularly the world’s highest coal royalty tax rates, needed to be heeded.

Bravus' Carmichael Mine Site.

“As the State Election approaches, our message to all political parties is that balanced, stable and consistent policy settings are critical to securing the investment that will ensure the resources sector can continue to underpin Queensland’s economic prosperity in the decades ahead,” Ms Hewson said.

“The royalties increase has added to rising operating costs which have been identified by member companies as another significant concern for the industry.”

The State of the Sector report also showed the resources sector’s commitment to reducing emissions and waste.

Half of CEOs said their companies already used renewable energy to power parts of their operations and 67 per cent planned to make further investments to reduce emissions.

“Companies are continually looking at new ways to reuse or recycle with 36 per cent saying they’ll be making further investments on new initiatives,” Ms Hewson said.

Janette Hewson attended the Future Resources Roundtable at the Courier-Mail offices in. Brisbane. Pics Adam Head

While, 56 per cent of CEOs believe the global decarbonisation transition will lead to increased and sustained demand for Queensland commodities, including steelmaking coal which is used for wind turbines, solar panels and electric vehicles.

“The global energy transition is presenting new opportunities for all Queensland’s resources, from coal, gas, metals and critical minerals,” Ms Hewson said.

“As the recent State Budget confirmed, everyday Queenslanders depend on a strong resources

sector to support our state through challenging times.

“If we have the right policy settings that encourage investment our industry can continue to provide that support for many decades to come.”

Originally published as ‘New royalty burden killing investment’: But demand for Qld commodities high