A multinational mineral producer will postpone plans for a new coal development in Queensland’s Central Highlands region because of extreme levies.
BHP recently delayed constructing its new $1 billion Blackwater South Coal Project (about 230km west of Rockhampton) due to the State Government imposing the “world’s highest coal royalty tax rates”.
“There has been a significant increase in the sovereign risk associated with Queensland which has caused us to say, ‘Well, we really cannot deploy further capital into that business for the time being’,” CEO Mike Henry said according to the Australian Associated Press.
The project involves building a new coal operation next to BHP Mitsubishi Alliance’s (BMA’s) Blackwater Coal Mine in Stewarton. It is proposed to extract as much as 10 million tonnes of coal per annum for up to 90 years.
The development could also sustain BMA’s existing mining province, creating up to 750 construction jobs plus a further 1200 operational positions in the process.
The proponent revealed recent efforts to secure federal approval did not necessarily mean a final investment decision was made.
“[Regulatory approval] gives you the option to make a decision to invest,” Henry said according to the newswire agency.
“Since then we have had changes to the Queensland royalty regime that were quite sudden and did not involve any engagement with industry. We will go back and reassess what the plans for the business are going forward.”
The remarks came after a taxpayer-funded advertising campaign promoted new tiered royalty rates of up to 40 per cent once the average coal price per tonne exceeds $300.
“As Queenslanders we own the coal that is extracted from our state [and] that is why mining companies pay us royalties when they sell it. Lately the price of coal has risen greatly [and], in times of boom, we want to share the boom,” the campaign video said on YouTube.
“When coal prices and company revenue increases the royalty will also increase [and], when world prices are low, the royalties will reflect this. It is fair [and] it is a return for all Queenslanders to support our jobs, services and lifestyle.”
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