PERTH (miningweekly.com) – The Queensland Resources Council (QRC) has again called on the state government to “urgently review” its coal royalty hike after mining major BHP again warned that the move made the region uncompetitive.

“The Queensland government’s decision to raise coal royalties to the highest maximum rate in the world makes Queensland uncompetitive and puts investment and jobs at risk,” BHP said in its interim results released on Thursday.

“We see strong long-term demand from global steelmakers for Queensland’s high quality metallurgical coal, however in the absence of government policy that is both competitive and predictable, we are unable to make significant new investments in Queensland. This increase to royalties will impact the local businesses, suppliers and communities in Central Queensland where we operate.”

The comments echoed earlier comments made by the miner which said that its BMA metallurgical coal operations would be "reassessing" future investment in the state following the royalty hike last year. In the same statement, the miner warned that considering BHP’s long-term outlook for metallurgical coal commodity prices, which reflect a range of drivers of commodity demand and supply, along with the significant increase in coal royalties in Canada, the end of operations at the BMA sites could be "earlier than previously anticipated".

“It’s a classic case of a government killing the golden goose in exchange for a short-term tax hit,” QRC CEO Ian Macfarlane said on Thursday.

“You can’t over-tax an industry, let alone Queensland’s most important economic driver, and expect business to continue as usual. We know other mining companies are also reviewing their investment exposure in Queensland.”

Macfarlane said resources companies pull their weight economically and socially in Queensland, and have done for decades.

“Our mining and energy sector is the number one contributor to the state economy, number one regional employer and number one export industry. We support the jobs of 450 000-plus Queenslanders and 14 000-plus businesses, who all pay taxes to help fund doctors, nurses, teachers and other government services. 

“Last financial year, our industry contributed a record A$94.6-billion to the state economy, which included a record A$9-billion in royalties collected under the previous royalty tax regime.

“Unfortunately, this could all be about to change. Queensland’s coal royalty taxes are now completely out of step with the rest of the world, and even within Australia,” he added.

“Some of the world’s biggest mining companies, and this includes BHP, Glencore and Peabody, have now backed off or are rethinking their investment in new projects, as they reassess the stability of our local investment climate and the state government’s attitude towards the resources sector.”