BHP coal review after Qld tax hikes
BHP has warned it could review its investment plans in Queensland coal in light of the state’s royalty rate hike, saying it is still assessing the impact of the windfall royalty hit on the life of its mines in Queensland.
BHP said the new Queensland royalty rates, which include three new royalty tiers aimed at capturing extra revenue when the coal price surges, would lift its royalty payments to an effective pretax level of about 19 per cent of the coal price at the port, up 7 per cent from current levels.
Chief executive Mike Henry said on Tuesday the company was still assessing the likely impact of the royalty changes, but said it threatened future investment in the state.
“The near tripling of top end royalties has worsened what was already one of the world’s highest coal royalty regimes, threatening investment and jobs in the state,” he said.
BHP said the review of its BMA operations would include an assessment of its “impact on production, jobs and the communities of Central Queensland”.
“This further cost pressure will discourage investment, operational growth, job creation and local business spending across the state,” BHP said on Tuesday. BHP sold its share of its BMC coal operations to Stanmore Resources this year, and said its BMA operations sold 17.2 million tonnes of coal for the June period, up about 2 million tonnes from a weather affected March quarter.
Annual metallurgical coal sales were well down, however, at 58.1 million tonnes, 9 per cent down on the 2020 to 2021 financial year.
Extraordinarily strong prices for BHP’S high quality coking coal will more than make up for production weakness, with the company reporting an average price of $US439.60 a tonne for its hard coking coal in the June half, and $US366.82 for the full year – more than 225 per cent above the $US112.72 it realised the previous financial year.
Even though coking coal has fallen back to closer to $US250 a tonne, the Queensland government will capture a far greater share of that in the current fiscal year.