BHP’s operational review for 2022/23 has reiterated its opposition to the near tripling of top-end coal royalties by the Queensland Government and its plans to halt investment in new projects in the state.

“Given the negative impact this (royalties increase) has on investment economics and the increase in sovereign risk, we will not be investing in any further growth in Queensland, however we will sustain and optimise our existing operations,” it stated.

The company’s metallurgical coal operations in Queensland produced 58Mt over the past financial year – in line with the 2021/22 results despite significant wet weather experienced in the first three quarters.

This was due to strong underlying operational performance, in particular, continued improvement in truck productivity at Goonyella and Daunia following the completion of their transitions to autonomous fleet, BHP reported.

Production for the period was further supported by a drawdown of raw coal inventory and improved labour availability compared to the prior period.

Production for the 2024 financial year is expected to be 56-62Mt.

Queensland Resources Council chief executive Ian Macfarlane said BHP was not the only company reconsidering its future investment in Queensland due to the royalties move.

He said the State Government needed to reconsider its decision to impose the world’s highest coal royalty taxes before more damage was done.

“BHP’s CEO Mike Henry told delegates to the World Mining Congress in Brisbane last month that the company won’t be investing in any further growth in Queensland and that message has been repeated in BHP’s update to the ASX,” Mr Macfarlane said.

“The company’s decision is based on Queensland becoming ‘the highest coal taxing regime in the world’ after the State Government raised royalty rates to five times that of New South Wales without any industry consultation.

“BHP’s ASX statement goes even further, warning about the increase in sovereign risk, which should set alarm bells for the Queensland Government.

“This is a blunt warning to the international investment community about the risks of committing to new projects in Queensland. When BHP talks, international investors and multinational companies listen.”