Analysts have significantly wound back the net asset value of BHP’s joint venture in Queensland coal with Mitsubishi wiping $2.6 billion from the measurement. Production forecasts have also been hit.

BHP imposed the freeze earlier this year after the State Government imposed big increases on the royalties paid by coal producers, which will hit the mining giant’s bottom line.

But added to that, the capital freeze would eventually hit its production, according to RBC Capital Markets.

In its analysis, RBC said it had its production forecasts for BHP “to run flat at 31.5 million tonnes from a previous expectation of growth to circa 35 million tonnes”.

“This also has the commensurate effect on unit costs and we have reduced our sustaining development capex by 25 per cent,” RBC said

“There is potential that this medium-term run rate moves even lower, however, we will leave (it) flat until more holistic guidance is given.

“This is incrementally helpful for met coal prices which, over time, could help to offset.

“Our net asset value for BHP-Mitsubishi Alliance falls to $7.4 billion from $10 billion and drives a 2 per cent fall in group NAV.”

The mining giant remains stunned by the State Government’s moves to increase royalties, which occurred without consultation with the industry, which was not uncommon in revenue related changes.