Mining firms to cut jobs to meet coal royalties
QUEENSLAND coal company chief executives expect to slash jobs to meet the increased coal royalties announced in the recent State Budget.
A survey of chief executives by the Queensland Resources Council showed that cost-cutting measures would not only include axing employee and contractor jobs, but also cutting rail, port and exploration costs.
QRC chief executive Michael Roche said the increased royalties came at a time when the industry was already under pressure from the high Australian dollar, rising labour and materials costs and falling commodity prices.
"The combination of 30% company income tax and the new royalty rates will mean Queensland will carry an effective taxation rate of 50% on a typical coking coal operation," Mr Roche said.
"This gives us the dubious honour of being the highest taxing coal jurisdiction globally."
QRC has called for an indexation of coal royalty thresholds, predicting royalties would increase annually if the thresholds were not indexed.
But Mr Roche said he was encouraged by Queensland Treasurer Tim Nicholls' comments at the weekend that he wanted to work constructively with the industry.
"While the current difficulties for the industry are part of the normal cycle, albeit exacerbated by a stubbornly high Australian dollar, issues such as increasing royalties and threats of further federal taxation increases do nothing to encourage continued investment in Australia's resources sector," Mr Roche said.
He said that his members had welcomed the establishment by the government of the new Resources Committee of Cabinet to deliver tangible cost-reducing and productivity-boosting reforms.