Advertisement

Royalties hike blasted as ‘an ambush’ but won’t impact $1b coal project

Whitehaven Coal has poured scorn on the State Government over its huge hike in royalties but said the move would not materially impact its planned $1 billion Winchester South coal project.

Jul 21, 2022, updated Jul 21, 2022
The massive CopperString project would need vast amounts of coal (File image)

The massive CopperString project would need vast amounts of coal (File image)

While the industry has shown no let-up in its attack on the Government over the $1.2 billion hike in coal royalties, Whitehaven chief executive Paul Flynn told analysts last week that the industry needed to be able to capture the big price spikes to make up for the times when coal prices were low.

The Government’s new royalty regime brings in higher rates to capture more revenue during the major price spikes the market has seen this year when records for both thermal and coking coal were smashed.

But Whitehaven said it hadn’t factored in the high prices that were in the Government’s new regime when considering the Winchester South project, near Moranbah

“We haven’t been using a price deck which contemplated the upper ends of the scale that they’re taxing now and so, in that sense, it’s not a material effect on our proposition as far as Winchester South goes. But … you need those spikes to capture a lot of value in a cyclical business,” Flynn told the analysts.

Flynn rejected a suggestion from an analyst that the State Government did not care about coal, but said it expected the electorate would “have a say on that at some point”.

“If the Queensland Government is taking part of the topside away from you then obviously people are going to look differently in terms of how they rate that region as being prospective for further investment, so it’s a general negative I have to say and so it’s going to be quite topical, I suspect even political, over the next year or two.”

However, in response to a question from an analyst, Whitehaven said the impact of the royalties would be about 3 per cent of the net present value of Winchester South.

Flynn said the hike was more about the Government’s budgetary problems and didn’t appear to be a reflection on its views about the mining industry.

“They just think this is an opportunity to fill a hole in the Budget and I suspect the voting populace in Queensland will have a view on that at some point,” he said.

InQueensland in your inbox. The best local news every workday at lunch time.
By signing up, you agree to our User Agreement andPrivacy Policy & Cookie Statement. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Queensland Resources Council chief executive told a Mackay forum yesterday that the industry was “down but not out” after what he described as a royalty ambush.

 

 

 

 

 

Local News Matters
Advertisement

We strive to deliver the best local independent coverage of the issues that matter to Queenslanders.

Copyright © 2024 InQueensland.
All rights reserved.
Privacy Policy