Queensland Treasurer Cameron Dick has spoken in Parliament to defend the State’s coal royalties regime after backlash over BHP ‘shelving’ the $1 billion Blackwater South project.

BHP in its FY2022 announcements yesterday repeated its position that Bowen Basin coal venture BHP Mitsubishi Alliance (BMA) was reassessing future investment decisions as a result of the royalties increase.

When questioned later on the Blackwater South project, BHP chief executive officer Mike Henry said the business would not be investing in Queensland for the foreseeable future.

“(Since beginning the approvals process) … we’ve had the changes with the Queensland royalty regime, which were quite sudden, didn’t involve any engagement with industry – which has been a significant increase in the sovereign risk associated with Queensland, which has caused us to say, we really can’t deploy further capital into that business for the time being and we’ll go back and reassess what the plans for the business are going forward,” he told reporters.

Mr Dick highlighted the fact the comments came as the company enjoyed a bumper profit, charged up by surging coal revenue.

BHP’s own documentation showed it had not proposed starting construction at Blackwater South until 2029, meaning a final investment was years away, he said.

Mr Dick said the company had already indicated it was in the process of withdrawing from coal and last year placed development plans for the Saraji East and Red Hill mining projects in the Bowen Basin on hold.

Since the new royalty regime was introduced, Mr Dick said Whitehaven Coal had confirmed its new Winchester South mine was unaffected and Peabody Energy confirmed its proposed North Goonyella mine was financially attractive.

Companies like Bowen Coking Coal had share prices trading higher than in May 2022, before new royalties were announced, and Stanmore Resources had just stumped up more than $400 million in cash to acquire the last 20 per cent of BHP’s former joint venture with Mitsui, BMC, he said.

“Queensland’s coal industry is in good health with strong profits being made and I do not begrudge these companies their windfall profits,” Mr Dick said.

“They are entitled to reap their fair share, just as the people of Queensland are entitled to reap their fair share as well.”

BHP records show the royalties it paid in Queensland increased 56 per cent between FY21 ($2.9 billion) and FY22 ($4.4 billion). They represent about 25 per cent of the State Budget’s non-GST and grants-related revenue.

BHP has warned that BMA mines could close early as a result of the increased royalties in combination with the long-term outlook for metallurgical coal commodity prices given factors including the latest climate-related announcements from key markets.

“Following the announcement of the change to the Queensland royalty regime from 1 July 2022, we will assess the impact on BMA economic reserves and mine lives, as well as the impact on production, jobs and the communities of Central Queensland,” it stated in the full-year results report.

“This further cost pressure is expected to discourage investment, operational growth, job creation and local business spending across the state.”

Member for Gregory Lachlan Millar said the reckless actions of the Palaszczuk Labor Government were costing jobs in Central Queensland.

“The Treasurer broke his promise of no new or increased taxes and this was the result – 2000 jobs gone and the Treasurer does not care. What other jobs is he happy to destroy?

“This affects every business in our community, whether it’s the local bakery, café or hairdresser and it means nothing to Cameron Dick.”