Royalty hike blamed for BHP's Queensland mine sell-off

Royalty hike blamed for BHP's Queensland mine sell-off

More investment is leaving Queensland providing further evidence the State Government’s controversial coal royalty hike has made the state uncompetitive.

This extract is taken from an article written by Madura McCormack for The Courier Mail on February 22th:

Queensland’s controversial coal royalty hike has made the state “uncompetitive”, mining giant BHP has warned as it announced a decision to sell-off two mines. 

BHP announced on Tuesday it had decided to sell-off the Daunia and Blackwater coking coal mines, which it owns as part of its Queensland-based joint venture BMA, as the projects would “struggle” to compete for capital moving forward. 

In Queensland, BMA paid $2.3bn in royalties in the first six months of the financial year, more than double the $1.1bn bill in the same time frame for 2021/22. The state government, in the budget last year, added new coal royalty tiers to rake in extra revenue during periods of exceptionally high global coal prices. 

The Queensland Resources Council warned BHP’s concerns and decisions to divest would be noted by “other major investors” as it called for the state government to reverse the controversial royalty hike. 

BHP chief executive Mike Henry said the sell-off was part of the ongoing “consolidation of the portfolio towards the highest quality coal” but the royalty increase had been “quite a radical shift” which had increased the risk and “worsened the economics” of mines not at the top tier. 

Queensland Resources Council chief executive Ian Macfarlane seized on BHP’s divestment notice as confirmation the royalty hike had made the state “uncompetitive”. 

“BHP’s concerns will be noted by other major investors here in Australia and around the world, which adds to the serious threat the royalty tax increase poses to future investment and jobs in Queensland,” he said.