The Queensland government in Australia announced to raise coal royalty by adding three new tiers to the current system on June 21. The decision has stirred different opinions and sent shares of Stanmore Resources, Bowen Coking Coal plunging by 21% and 47% respectively.
Starting from July 1, new tiers would apply of 20% for coal priced above A$175/t, 30% for prices above A$225/t, and 40% for prices above A$300/t.
Current tiers charged 7% royalty for coal prices over $100/t, 12.5% for prices ranging from A$100-150/t and 15% for above A$150/t.
But Minerals Council of Australia chief executive officer Tania Constable said she believed the move could place jobs at risk. "This tax grab is short-sighted and counterproductive over the long term and has the potential to scare off investors in all commodities," she said.
The move is believed will harm Queensland's international competiveness, said Ian Macfarlane, chief executive of the Queensland Resources Council. He also criticized that the new regime will have minimal economic benefits for the state, but potential damage to the industry, as 80% of the extra royalties raised will be redirected to Canberra over the next five years anyway.
Kylie Porter from the Greater Whitsunday Alliance, the economic development agency for the Mackay, said the government's move could impact coal sales, and push buyers away to other sellers due to high coal prices in Queensland.
Local coal mining bodies also slammed the new royalty regime. The changes meant 60% of Anglo American's profit will be handed to government, said the company's Australian CEO Nick Barlow, who commented that coal royalty rates in Queensland are already among the highest in the world.
The company runs Moranbah North and Grosvenor mines.
"The cost of doing business in Queensland is already high enough. The increased costs will discourage the state's investment, income growth, employment rate and local enterprises expenditure, " said Edgar Bastoe, the president of BHP Australian Mining.
(Writing by Rebecca Liu Editing by Tammy Yang)
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