The bank’s economics team said metallurgical coal price forecasts had been reduced but would still be about $US206 a tonne ($A303 a tonne). That was well below the $US600 a tonne they reached in 2022.

Last year the State Government hiked its royalty regime from a rate of 15 per cent, payable on that part of the average price per tonne exceeding $A150. The new royalties kick in at 20 per cent for prices above $A175 a tonne, to a top tier of 40 per cent on that part of the average price per tonne that was more than $A300.

The shakeup of the royalties was expected to deliver the Government about $13 billion this financial year, according to the Queensland Resources Council. That was $8 billion more than estimated in the last Budget.

The move has been blamed for a major fall in Queensland’s global standing as a mining province in the Fraser Institute’s latest survey.

Nevada took out the number one position. Western Australia, which topped the ranking last year, ranked 2nd this year. Saskatchewan continues to be on the podium, dropping slightly from a rank of 2nd in 2021 to 3rd this year. Rounding out the top 10 are Newfoundland & Labrador, Colorado, Northern Territory, Arizona, Quebec, South Australia, and Botswana. The United States, Canada and Australia each have three jurisdictions in this year’s top 10, followed by Africa (1).

The resources sector has also been impact by the increase in the Federal Government’s petroleum resources rent tax for offshore gas projects in today’s Budget which is expected to bring in an extra $2.4 billion.

Westpac’s analysis includes iron ore prices at $US100 a tonne but with clear downside risks.

Thermal coal was expected to be about $US185 a tonne.

Westpac said that since April there had been a significant correction in commodity markets led by a 22 per cent fall in metallurgical coal prices.