PERTH (miningweekly.com) – The Minerals Council of Australia (MCA) on Tuesday lashed out at the Victorian state government over a three-fold increase on royalties paid by the brown coal industry.
State Treasurer Tim Pallas over the weekend revealed the new royalty rate, which would be detailed in the state budget this week, would apply from January 1 and would generate an additional A$252-million over a four-year period.
Pallas said that the increase in the royalty rate would bring Victorian royalties in line with those applied in New South Wales, Queensland and Western Australia.
However, MCA executive director for Victoria Megan Davison said that the Victorian coal industry could not be compared with its counterparts in New South Wales and Queensland, as Victorian coal was not an export commodity.
“Linking royalties paid by Victorian coal companies to other states is short sighted and fails to understand that Victorian coal is not an export commodity as it is in both New South Wales and Queensland,” Davison said.
She pointed out that the Victorian brown coal industry was a vertically integrated sector where electricity suppliers extracted brown coal for their own generation use.
“There are no exports of brown coal and to equate the Victorian coal industry with that in New South Wales and Queensland, where the majority of black coal production is exported, is wrong.
“There is no doubt that energy suppliers will be forced to increase costs to consumers in Victoria as a result of this decision. Claims that electricity producers have the capacity to absorb this royalty increase fail to understand the reality of the electricity market.”
Davison said that with brown coal generation supplying 24% of the national electricity market, it was expected that consumers in other states could be affected by price rises as a result of this massive royalty hike.
“The expected increase in electricity costs will hit Victorian businesses hard, especially the manufacturing sector where uncertain economic conditions are already placing the industry under strain.
“This decision has nothing to do with paying a fair share and everything to do with a revenue grab.”