Queensland’s minerals exploration sector will also feel the brunt of the State Government’s decision to increase coal royalty tax rates to the highest rates in the world, Queensland Resources Council (QRC) chief executive Ian Macfarlane said today.
Speaking at the Queensland Exploration Council’s (QEC) annual Tech Summit in Brisbane, Mr Macfarlane said the exploration industry was right to be concerned about the flow-on effect of the royalty hike on its ability to compete internationally for project capital.
“Without consistent and successful exploration, and the confidence of domestic and international investors, there is no Queensland resources industry,” he said.
“It can take years, if not decades, for exploration companies to gain approvals to explore to get minerals and commodities out of the ground and transported to customers, so maintaining long-term confidence in our sector is essential for investors to make long-term decisions.”
According to a QEC survey last year, explorer sentiment towards access to investment capital was the best in its 11-year history.
Mr Macfarlane said the Queensland Government’s decision to dramatically increase coal royalty tax rates could not have come at a worse time for the exploration, minerals and energy sectors.
“This irresponsible move – made behind closed doors and without any consultation with industry – has damaged our reputation as a safe and reliable destination for investment,” he said.
“The resources sector is Queensland’s number one export industry, supporting the jobs of more than 422,000 people and contributing $84.3 billion to the Queensland economy last financial year, so this is a serious misstep by the government,” he said.
“Exploration is at the heart of this activity, sustaining a pipeline of new resource developments, which in turn creates opportunity, economic activity and a royalty tax stream that helps pay for doctors, nurses, teachers and police, as well as roads and other essential public infrastructure.”
Under the government’s new coal royalty regime, royalty taxes paid by coal producers this financial year will rise from about $7.3 billion under the previous regime – which was almost four times higher than the previous year because of higher coal prices – to around $16 billion.
Once gas and metal royalties are included in this figure, the total amount of resources royalties to be collected this financial year by the Queensland Government will reach around $18.3 billion.
QEC Chair Kim Wainwright said today’s Tech Summit was an opportunity to bring industry together to discuss the latest developments in exploration across the state.
“Like other parts of the resources sector, Queensland’s minerals exploration sector will be impacted by the State Government’s decision to increase royalty taxes on the industry,” Ms Wainwright said.
“Exploration companies look to sell their projects to investors, and if investors see something happening in a region that causes concern, such as a government that has dramatically increased royalties, that presents a reason not to support that project, it’s as simple as that."
"This is at a time when the sector was already tackling a key obstacle to growth – a lack of skilled labour."
“We urgently need more young people choosing a career in resources and exploration."
“Today we’re hearing from more than 20 presenters, who are sharing their stories of innovation in exploration, their challenges and successes and the latest research outcomes.” she said.
“I’m pleased to say 50 percent of today’s presenters are female, and we have a session dedicated to the achievements of four female exploration experts, who each started as graduate geologists and have taken four very different career journeys."
“This demonstrates the diverse range of career pathways available to young people today who choose to study geology and earth sciences.”