There’s been a groundswell of vocal support for the Queensland mining industry over the past few months. From the Courier Mail’s Future Resources Forum in June to the Queensland Mining and Engineering Exhibition (QME) in July and the annual MiningPro Coal Industry Event, which also launched two new advocacy groups: Coal Australia and Jobs for Mining Communities.
All three events were well attended by coal industry advocates, parliamentarians and everyday Queenslanders who make a living from the sector – and who are increasingly heeding calls to be loud and proud about their livelihoods. On the other hand, this buoyancy is offset by a common theme that I’ve seen in conversation and several panel discussions, focusing on the ripple effects caused by the 2022 Queensland government royalty hikes.
With two years of hard evidence on hand, it’s clear as day that Queensland’s resources pipeline, abundant for so many decades, now has serious leaks – many caused by royalties and taxation policies and unresponsive regulatory controls and approvals, exacerbated by a head-in-the-sand public and governmental attitude to our longer-term futures.
What’s coming out of the spout today?
Janette Hewson, Chief Executive Officer for the Queensland Resources Council, revealed the exact state of the pipeline in a Speaker Series discussion about ‘Royalties and the Impact to Queensland’ at QME that I moderated.
She explained that in 2022, just before the royalty hike was imposed, there were 440 million tonnes of potential projects in the pipeline. Today, we’re looking at just 170 million tonnes. Overwhelmingly, major players are only investing in sustaining capital rather than committing to forward-facing projects.
Minerals Council of Australia’s Chief Economist, Dr Ross Lambie, reiterated, “It’s a very leaky pipeline – not much actually makes it through to committed or completed projects. That’s because of the distinctive characteristics of mining investment – large, lumpy capital, long time spans for returns, and volatile prices – these all add up to uncertainty”.
While we all appreciate those factors, we can’t affect many of them as an industry. But one we can address is the stability of Queensland’s policies as they affect the sensitive investment environment. Policy certainty is critical for good outcomes for the national economy, communities, and regions, and the continuing elongation of approvals and unannounced royalty impositions only reduce the output at the end of the pipeline – where so many of our high standards of living are funded from.
Legislative stability will stem the main leaks
During 2023, the QRC presented no less than 64 submissions to the government about the changes. The overriding message – stop moving the goal posts. Amid all else, stability will help to keep the industry healthy and growing into the future. Ms Hewson stressed, “it’s about staying competitive – other Australian states and other resource-producing countries are become simpler and less risky to invest in. If we can’t guarantee stability, we will continue to go backwards”.
Royalties take 32% of revenue from Queensland coal mines
The QME panel included Paul Flynn, Chief Executive Officer of Whitehaven Coal. On one of the few acquisitions in the Queensland coal industry in 2023, he commented, “We’ve doubled our Queensland business with Blackwater and Daunia, but we need a sustainable royalty regime in the state. It’s not just about solving short-term budgetary holes for Queensland. There’s no energy transition without mining, and that includes steel-making coal”.
Similar views were expressed during the recent Courier-Mail Future Resources Forum. Nick Jorss explained that the closure of Central Queensland’s Bluff Mine was a direct result of the royalty grab, absorbing a whopping 62% of the operating margin. Clearly not sustainable by anyone’s standards, and directly affecting the nearby and surrounding communities.
Moving forward to Stability and Simplicity
‘Stability and simplicity’ is the clarion call from industry leaders and policy experts. To make investment more attractive, these two factors should be the first and overriding priorities. Stability and simplicity in policy, such as a whole-of-sector approach, rather than treating bulk materials and critical minerals differently, would make a demonstrable difference. And a straightforward, transparent process to approvals would send a message of respect, along with encouraging a stable environment for investors. The experience of potential and actual investors has been one of ‘red carpet to red tape’, to quote a great analogy from Bravus’ Samir Vora at the Courier-Mail luncheon.
The sustainable future of coal is simple – and attainable. But as Nick Jorss pointed out, “The activists have had the megaphone and they’ve run the dialogue – it’s time for us to take our rightful place and remind people what we actually do contribute”.
Jodie Currie
Director, Bowen Basin Mining Club
