31.08.2022

Australia: Qld Govt’s Royalty Tax flattens Resources Sector

A shock new report confirms the Queensland Government’s decision to impose the world’s highest royalty taxes on coal producers has hit the resources sector for six, with all commodities feeling the pain.

According to data from the Queensland Resources Council’s (QRC) latest State of the Sector report for the June 2022 quarter, more than one quarter (27%) of resources leaders expect to employ less people at existing operations over the next five years as a direct result of the State Government’s royalty hike.

This compares to the same survey six months ago, which found no Queensland CEOs expected to cut jobs over the next 12 months and 35% were feeling confident about increasing employment at their operations.

QRC Chief Executive Ian Macfarlane said the report confirms the industry’s worst fears about the impact of the government’s higher royalty taxes on future investment plans.

“This latest data shows the State Government’s extra royalty tiers have dramatically impacted business confidence and investment plans across all commodities, not just coal projects,” he said.

“The report is a major red flag because it shows how much the royalty hike has hurt Queensland coal projects as well as gas, base metals and critical minerals projects.

“Most resources companies don’t just focus on just one commodity, so hitting the coal sector with higher taxes has had a scattergun effect across our industry and forced a rethink of investment plans.

“Nearly one third (31%) of non-coal CEOs now expect to cut jobs at their existing operations over the next five years, as companies look to invest capital in less-risky destinations.

“This is a very sobering outlook for Queensland at a time people are already feeling under pressure from rising costs of living and higher interest rates.

“The last thing people need to deal with is a downturn in the resources sector, which will impact every Queenslander in one way or another.”

Mr Macfarlane said resources companies with established operations in Queensland can’t pick up mines and relocate them, but new projects or planned expansions of existing sites will be hit hard as companies consider investing in less highly taxed destinations.   

The QRC’s latest report found more than half (54%) of CEOs believe the likelihood of expanding or upgrading their existing operations has decreased because of the royalty hike.

More than half (62%) said the likelihood of new projects had also fallen, with 38% saying the chance of undertaking new projects had dropped by more than 25%.

“This is a big hit to industry investment plans for a State Government that's constantly talking up an expanded new economy minerals sector, and to Australia’s future energy and resources security,” Mr Macfarlane said.

Mr Macfarlane said the State Government’s coal royalty hike will cost the sector far more than the $5.5 billion projected by the Queensland Treasury for 2022-23.

Using the latest forecast coal prices from independent analysts such as Westpac (from 18 August 2022), coal royalties could reach $12.1 billion in 2022-23, with $4.4 billion generated from the new royalty tiers.

QRC modelling based on earlier coal price forecasts from the Office of the Chief Economist, predicts coal royalties will reach $16.1 billion this financial year, with $6.7 billion generated from the new tiers.

Mr Macfarlane said the impact of Queensland’s now uncertain resources investment environment is already being felt, with Australia’s largest mining company BHP announcing it would pause investment plans in Queensland due to the sudden increase in state royalty taxes.

“And this is unlikely to be the last project to be affected. It’s a very difficult situation for our sector, when only four months ago we were being thanked by the State Government for playing a key role in Queensland's economic recovery from COVID-19.”

A CEO sentiment survey in the QRC report found the top three concerns keeping Queensland resources leaders awake at night right now are (1) the global macroeconomy, with some CEOs pointing to a looming recession and the impacts of the Ukraine war as a major concern; (2) high input costs which has jumped from sixth place to number two since the December 2021 quarter; and (3) the problem of attracting and retaining skilled employees, which has fallen from the number one position for the first time since the June 2021 quarter.

Source: QRC

#Queensland Resources #mining policies #mining economy #economy #resources business #Mining #surface mining, quarrying #underground mining

                     

30.08.2022

Gold Fields and ABB pioneer digital Mining in remote Chilean Desert

• Order for ABB Ability™ Genix Industrial Analytics and AI Suite adds to extensive electrification, automation and digital solutions at Salares Norte project  
  
  

26.08.2022

Qld Resources Council welcomes Mining Lease Approvals for New Acland Mine

The Queensland Government’s approval today of mining leases for New Hope Group’s New Acland Stage 3 coal mine project has been welcomed by the Queensland Resources Council (QRC).  

26.08.2022

Endomines reports new, high-grade drill results from the Pampalo gold mine

Endomines report drill results from the underground core drilling program carried out in the spring/summer 2022 at the Pampalo Gold Mine in Finland. The drill program consisted of fifty tree (53) diamond drill holes for a total of 4 330 m.  

25.08.2022

Epiroc signs Agreement to acquire South African Mining Equipment Manufacturer

Epiroc, a leading productivity and sustainability partner for the mining and infrastructure industries, has signed an agreement to acquire AARD Mining Equipment, a South African mining equipment manufacturer.