VIDEO: Calls to change Queensland’s coal royalty scheme

STACEY MALLETT, MALLETT MINING, DIRECTOR:  We've had a rough start to the year. We’ve seen added layers of scrutiny around procurement processes. We've also seen some movement with more so the mining contractor market where some of those projects may not be going ahead or have wrapped up early or have not been continued.

ALEXANDRA BLUCHER, REPORTER: Mallett Mining provides parts to coal mines for the massive trucks that scatter the landscape around Moranbah in central Queensland.

STACEY MALLETT:  Are they paying rent on both bottles straight up? Is that $150 including GST?

ALEXANDRA BLUCHER: Director Stacey Mallett is worried as some mining companies have started cutting hundreds of local jobs. 

STACEY MALLETT: Thinking about a community like Moranbah and dozens of other towns like us that really rely on the mining industry for that social support, for the business support and really bringing and attracting people to the area. It definitely creates some uncertainty. 

ANDREW BOYD, QMETCO, MANAGING DIRECTOR:  How much stock do we have in the ground at the moment?

Overall the industry's doing it very tough. I don't think there'd be many producers, if any, that are making cash in the current environment. 

ALEXANDRA BLUCHER: South of Moranbah, QMetco employs 700 people to dig up metallurgical coal for export to steelmakers.

Managing director, Andrew Boyd, says while prices are historically not too bad, an increase in costs is putting pressure on the company.

ANDREW BOYD:  The things that are really hurting us are cost escalation. So our costs over the last four years have gone up by about 50 per cent.

We've had a significant increase in coal royalties to the state government as well, so those two cost impacts are making most producers marginal at the moment. 

So this calendar year 2025 we're forecasting to lose money, probably lose in the vicinity of $50 million and at the same time we'll be paying about $75 million in royalties to the state. 

ALEXANDRA BLUCHER: Over the past three years, coal royalties have earned more than $30 billion for Queensland’s coffers. 

The former Labor government changed the scheme in 2022 to a tiered system that increases taxes on miners’ revenue when the price of coal goes up.

That ranges from 7 per cent of earnings at $100 per tonne to 40 per cent of earnings on the amount earned above $300 per tonne.

TONY WOOD, GRATTAN INSTITUTE:  Coal royalty is basically the fee that a government charges a coal company and not just coal, any mineral resource, for the right to access a resource like coal, which is our property as Australians.

ALEXANDRA BLUCHER: The price for coking coal is just under 200 US dollars or $300 Australian dollars per tonne - down from the surging prices when the scheme was introduced. 

Moranbah mine worker and local councillor, Simon West, says the royalty scheme is crucial for regional Queensland. 

SIMON WEST, LOCAL COUNCILLOR AND MINE WORKER:  The coal royalty scheme as it stands now is good for local community and it's good for our local infrastructure.

Moranbah couldn't afford to build and pay for its own brand-new hospital - mining royalties did that.

ALEXANDRA BLUCHER: Simon is also on the national executive of the mining union and a member of the Labor Party.

He says he’s not worried about his job.

SIMON WEST:  Mining is a cyclical business. Coal mining companies, I would imagine can predict the highs and lows better than you and I think they're well adapted to preparing for and dealing with those lows.

ALEXANDRA BLUCHER: Last week BHP Mitsubishi Alliance – or BMA – announced 750 jobs would go in its Queensland coal operations.

The Saraji mine will be placed into care and maintenance - a mine that was previously mothballed in 2012 and only reopened in 2022. 

Other miners, including Q Coal, Anglo American and Bowen Coking Coal have also announced job losses. 

DAVID CRISAFULLI, QUEENSLAND PREMIER:  The commitment I took to the election I honour, entirely. 

ALEXANDRA BLUCHER: Despite heightened pressure from the industry, and from some federal LNP politicians, the Queensland Premier David Crisafulli has consistently said there’ll be no change to the royalty scheme.

However, last month the Premier finalised a deal with Bravus – formerly known as Adani – to defer its royalties. In exchange, the company is investing $50 million to expand operations. 

The Premier says the government’s position on the royalty scheme itself won’t change. 

DAVID CRISAFULLI: We’re going to set strong environmental frameworks, approvals will be given in a timely fashion, and you won’t have changes to regulation and taxation. 

Now on the back of that I believe we can create a culture where there is an ability for them to invest.

ALEXANDRA BLUCHER: Tony Wood from independent public policy think tank - the Grattan Institute - argues the royalty scheme is working as intended.

TONY WOOD:  The total royalty payments for the last financial year were between $5 (billion) and $6 billion. That's a lot of money, but the previous year it was more like $10 billion. Now most of that money was spent on essential Queensland infrastructure, and so therefore, I think Queensland has benefited from that extra high royalty. 

You could debate whether or not that was fair or not, but I think as a principle, I can't see much to criticise. 

ALEXANDRA BLUCHER: The industry has made it clear it won’t stop lobbying the government for change.

JANETTE HEWSON, QUEENSLAND RESOURCES COUNCIL, CEO:  We'd like to sit down and work with government on a way forward. We are open to collaborating with government on what can deliver a more balanced royalty return for the state but also ensure that companies have money left over so that they can continue to invest here. 

TONY WOOD:  Companies are often threatening that if you do this, whatever it might be, to us then we are going to leave town. Eventually, if things get really bad they might. 

But equally the government's got to often stare these companies down because often there's a whole range of things that are affecting their profitability. 

And if they can lean in on a government to give them a tax holiday to give them relief on something, then of course they will and that's not unique to coal companies.

ALEXANDRA BLUCHER: Back in Moranbah, locals want their voices front and centre in the debate.

SIMON WEST:  My personal position is the way the current royalty scheme is set up, it is beneficial to the communities in which coal is mined. 

STACEY MALLETT:  I think what I'd personally like to see is some reform, some consultation with industry and a coal royalty scheme that makes sense and is sustainable.