BHP’s “sovereign risk” warning over Qld Govt’s coal royalty tax a serious concern

  • Posted 20 July, 2023
  • Media Releases

20 July 2023

“The company’s decision is based on Queensland becoming ‘the highest coal taxing regime in the world’ after the State Government raised royalty rates to five times that of New South Wales without any industry consultation.

“BHP’s ASX statement goes even further, warning about the increase in sovereign risk, which should set alarm bells for the Queensland Government” Mr Macfarlane said.

“This is a blunt warning to the international investment community about the risks of committing to new projects in Queensland. When BHP talks, international investors and multinational companies listen.”

Without investment in new projects, thousands of future jobs in the resources sector are under threat over the next decade.

The Queensland Resources Council (QRC) says the State Government cannot ignore a warning from one of the world’s biggest mining companies over the threat to sovereign risk from Queensland’s snap decision last year to impose the world’s highest coal royalty tax.

QRC Chief Executive Ian Macfarlane said BHP’s operational update to the Australian Stock Exchange today confirmed the company won’t be making new investments in Queensland.

“BHP’s CEO Mike Henry told delegates to the World Mining Congress in Brisbane last month that the company won’t be investing in any further growth in Queensland and that message has been repeated in BHP’s update to the ASX,” Mr Macfarlane said.

“The Queensland Government might like to talk up the new jobs in the resources sector over the last two years, but these are the result of major investment decisions made five to 10 years ago,” Mr Macfarlane said.

“We know BHP is not the only company reconsidering its future investment in Queensland.

Without major new projects coming on stream to replace mines that have reached their end-of-mine life, jobs will steadily disappear over the next five to 10 years and regional communities will be hardest hit by this decline in resources investment.

“The State Government needs to reconsider its decision to impose the world’s highest coal royalty taxes before more damage is done and the move away from investing here becomes more widespread.

“Companies have plenty of options within Australia and overseas when it comes to committing billions of dollars into new resources projects and it’s clear the Queensland Government’s currently uncompetitive policies are forcing them to look elsewhere.”