Queensland Treasurer Cameron Dick has defended changes to the state's resource royalty scheme after mining giant BHP blamed the rises for pausing new coal investments in the state.
BHP's decision means investment in the proposed Blackwater South coal mine in central Queensland is effectively paused.
Company chief executive Mike Henry made the announcement during the release of its financial results on Tuesday.
He said changes to the royalty scheme in June "were quite sudden".
"[It] didn't involve any engagement with industry which has been a significant increase in the sovereign risk associated with Queensland, which has caused us to say we really can't deploy further capital into that business for the time being and we'll go back and reassess what the plans for the business are going forward," Mr Henry said.
In financial results published to the ASX, the company also stated the royalty changes, along with the long-term outlook for metallurgical coal, could lead to other mine sites closing earlier than "previously anticipated".
"This further cost pressure is expected to discourage investment, operational growth, job creation and local business spending across the state," the report said.
The Queensland Government announced a new coal royalty regime in the 2022/23 budget in June.
Previously, royalties were capped at 15 per cent for prices above $150 a tonne.
From July, new tiers were introduced; 20 per cent for prices above $175 a tonne, 30 per cent for prices above $225 a tonne and 40 per cent for prices above $300 a tonne.
At the time, Treasurer Cameron Dick labelled high coal prices, at times as high as $500 a tonne, as the reason behind the royalty changes.
BHP's financial documents stated the royalties it paid to the state represented about 25 per cent of the budget's non-GST and grants-related revenue.
The Blackwater South project was still going through the approvals process when BHP's investment was paused.
The project is expected to create 750 construction jobs and 1,200 operation jobs at the open-cut metallurgical mine, which will produce 10 million tonnes of coal for steelmaking every year.
Mr Dick took to State Parliament on Wednesday morning to defend the royalty's regime.
He said coal was "delivering to BHP and its shareholders" coal revenue at $22.1 billion.
"Queensland's coal industry is in good health … with strong profits being made," Mr Dick said.
"And I do not begrudge these companies their windfall profits.
"They are entitled to reap their fair share, just as the people of Queensland are entitled to reap their fair share as well."
Blackwater decision 'many years away'
The Treasurer said he noted commentary about the Blackwater South mine, but "BHP's own documentation demonstrates … [it] would not commence until 2029 at the earliest".
"So, a financial investment decision is many years away.
"And I can also confirm … that the Office of Queensland's Coordinator-General has confirmed with BHP that they are proceeding with regulatory approvals for that mine at pace.
"Whatever decision BHP makes in relation to that project, it must be viewed in the context of BHP's 20-year process of withdrawing from coal."
Mr Dick said in a statement: "Other coal companies have already confirmed new bipartisan progressive coal royalty arrangements will not have an adverse impact on mining investment decisions".
Move 'not surprising'
Queensland Resources Council chief executive Ian Macfarlane said the move from BHP "wasn't surprising".
"BHP is a very, very big public company and don't involve themselves in publicity stunts," he said.
"Their statements have to be absolutely down the line on the basis that they're responsible [to] ASIC and also [the ASX]."
He said he believed something like this would happen once the royalty rises were introduced.
"The mining companies that I talk to are reassessing their investments in Queensland," he said.
"Their shareholders are quite rightly outraged that money that they've invested in good faith in companies is now being taken by a state which can't verify or justify what they're spending it on."
Groups call for certainty
Kylie Porter is the head of the Greater Whitsunday Alliance, an economic development organisation that represents the Mackay and Isaac regions, home to several BHP mines.
She said the move from BHP added a level of uncertainty about what the future for the region looked like, but she urged the mining giant, other companies and the state government to come together to work on a solution.
"We need to resolve that so we're able to move forward and get on with the business of what we do, which is underpinning the Queensland and Australian economies," she said.
She said the impact BHP had on the economy across central Queensland could not be underestimated.
