The company, which has scaled back its full year coal production forecasts because of heavy rain in central Queensland, has previously said it was reviewing the impact of the royalty hike.

It now appears that review is over and it has concluded it was “unable to invest” in Queensland coal. It has also said the royalty hike would impact the local businesses, suppliers and communities in central Queensland.

The increase in royalties was designed by the Palaszczuk Government to capture some of the money that has poured into coal companies over the past year as global prices broke all records. The top royalty rate was tripled to 45 per cent and BHP has set aside more than $1 billion in case some of its mines have to close down earlier than anticipated.

“The Queensland Government’s decision to raise coal royalties to the highest maximum rate in the world makes Queensland uncompetitive and puts investment and jobs at risk,” BHP said in its production report released today.

“We see strong long-term demand from global steelmakers for Queensland’s high quality metallurgical coal, however in the absence of government policy that is both competitive and predictable, we are unable to make significant new investments in Queensland.

“This increase to royalties will impact the local businesses, suppliers and communities in Central Queensland where we operate.”

Its joint venture coal company, BMA, increased production by 5 per cent in the December quarter as productivity improved, but this was offset by rains in central Queensland.

“Full year production is trending to low end of the guidance range of between 29 and 32 million tonnes as a result of significant wet weather,” the company said.