Investors hit pause due to coal tax hike – Macfarlane

Column by Queensland Resources Council chief executive Ian Macfarlane The Queensland Government’s decision to ambush the coal industry and introduce a new, 40 per cent coal royalty tax rate in last week’s state budget – with one week’s notice - is a massive red flag for investors in Queensland. Hitting coal producers with three new ‘super tax rates’ is not just a red flag for coal miners, or miners in general. Queensland Resources Council chief executive Ian Macfarlane. It’s a red flag for all stakeholders of Queensland’s new resource projects. It's now clear to investors we have a state government that changes the rules – behind closed doors and without consultation - when it decides it wants more income. This sets a dangerous precedent because it dramatically increases the commercial risks associated with investing in Queensland. Investors have now hit pause, while they reassess the profitability of current and future projects under this new, higher-risk operating environment. We know this because that’s what companies are telling us. Coronado Global Resources says imposing extra royalties on its Queensland business puts it at a competitive disadvantage to lower cost jurisdictions within Australia and overseas. Bravus Mining and Resources says the State Government’s decision to impose higher royalty taxes will seriously impact the competitiveness of the sector, and jobs that come with resources projects are now more likely to occur in places other than Queensland. Yancoal says the increase in coal royalties will force it to closely reconsider the viability of any future investment in the expansion of its Queensland operations, given the industry’s cyclical nature and that investment decisions typically have a 20-year plus horizon. The company says the resources sector requires a predictable fiscal regime to make informed investment decisions, and this decision by the Queensland Government is inconsistent with its responsibility to support and encourage such a regime. The last word goes to Anglo American, which says the new tax will place a heavy burden on the sector and Queensland mining regions. Anglo’s steelmaking coal business competes for capital against other options within its global diversified mining portfolio, and the company says Queensland’s new, extraordinary, progressive tax tiers will hurt the business case for new investment. Queensland coal producers now pay the highest coal royalties in the world, and already paid the highest in Australia. How much is enough for this government?

Investors hit pause due to coal tax hike – Macfarlane

Industry Queensland

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