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Resources giant discloses impact of ‘excessive’ revenue raising

Curragh Coal Mine
Curragh Coal Mine

Another multinational mineral producer came forward about the cost of extreme coal levies.

Coronado Global Resources recently predicted it could pay an extra $144.71 million annually due the Queensland Government’s push to impose the “world’s highest coal royalty tax rates”.

“Coronado estimates the second half 2022 impact on earnings from the policy change would be approximately US$50M (A$72.36M) post tax based on current spot prices,” it said in its latest quarterly report.

“Coronado estimates the implied royalty rate for the Curragh mine, assuming a total realised coal price of US$250 (A$361.96) per tonne under the new structure, equates to approximately 20 per cent. Under the legacy royalty structure the implied rate at this price level was approximately 12 per cent.”

The proponent accused the Palaszczuk government of making interstate and offshore coal producers more affordable than their Queensland counterparts.

“While the sector has benefitted from the recent strong pricing cycle, royalties paid to the state government under the now legacy royalty arrangements have also been highly elevated … and the imposition of additional royalties on the coal industry in Queensland puts it at a competitive disadvantage to lower-cost jurisdictions within Australia and overseas,” it said.

“Coronado is disappointed by the increase in royalties and supports commentary from the Queensland Resources Council, which has articulated the risks of raising royalties without industry consultation – and the negative impact these higher taxes will have on investment.”

For now the proponent is considering whether to shift its focus away from the Sunshine State and towards its North American operations.

“Unlike some of our peers, Coronado is a geographically diversified metallurgical coal producer with operations in Queensland and the United States. Our high-quality Buchanan and Logan metallurgical coal mines in the US will not be impacted by this royalty increase,” it said.

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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