BHP says it will review the planned lifespan of its seven central Queensland mines after the Palaszczuk government unexpectedly hiked coal royalties.
At current spot prices, the taxes, which were levied last month, effectively increase the royalty rate seven percentage points, to 19 per cent.
“The near tripling of top end royalties has worsened what was already one of the world’s highest coal royalty regimes, threatening investment and jobs in the state,” BHP chief executive Mike Henry said.
The mining giant says the hike damages the state’s reputation as a stable place to invest and will make it harder for Queensland to compete against other global jurisdictions in attracting new projects.
As part of a joint venture with Mitsubishi Development, BHP mines coking coal from seven mines across the Central Queensland’s Bowen Basin. The BHP Mitsubishi Alliance has 14,000 employee and contractors and spent $6.1 billion on suppliers in FY2021, many located in Central Queensland, BHP said.
In an operational update released on Tuesday, the company also said an unplanned smelter outage, labour shortages and COVID-19 absenteeism caused it to miss its full-year nickel production target but it hit iron ore and thermal coal guidance.
BHP produced 76.8 kilotonnes of nickel from its WA operations in fiscal 2022, down 14 per cent from a year ago, after issues with its oxygen plant led to a 15-day smelter outage.
There was also significant COVID-19 related absenteeism in the March quarter, although less so recently.
Mr Henry called it a “strong fourth quarter to cap off a year of significant progress.
“Our performance for the year has been underpinned by safe, reliable operations and firm demand for our commodities.”
Iron ore volumes in WA were at a record and Queensland coking coal delivered strong performance for the quarter in the face of significant wet weather, Mr Henry said.
But RBC Capital Markets analysts Tyler Broda and Kaan Peker called it a “weak” quarterly update that would take the shine off a fairly monumental year for BHP with the sale of its petroleum assets.
Still BHP shares were up 0.3 per cent to $37.09 at 1146 AEDT.
(Australian Associated Press)