State misses $554m from royalties due to legal loophole

A LEGAL loophole means many mining giants do not have to pay the state millions of dollars in royalties on coal they mine.

Rio Tinto's Kestrel Mine, north-east of Emerald, pays Anglo-Pacific instead of the State Government for some blocks of land it mines under the century-old legislation.

Anglo-Pacific predicted its gross royalty income from Kestrel for 2014 would be about $3.4million.

But a BHP Billiton spokesperson said the land it mined, including Daunia and Caval Ridge near Moranbah, did not fall into this category.

It is understood some Bowen Basin mines appear to have used this loophole for decades.

In the 10 years up to December 29, 2009, the state missed out on $554million in royalties from Queensland mines because that was paid to private owners.

Queensland University of Technology economist Mark McGovern was calling on the government to change the law as the Treasurer looked for more money for the coming state budget.

Dr McGovern said the state had ownership of resources on behalf of Queenslanders.

He said the current legislation could help explain why, even while mines were doing well, the government's deficits had been so bad.

Dr McGovern said the cost-benefit analysis needed to be reviewed.

"The state should be reviewing this as a priority," he said.

"If it's not state-owned, what's the gain? Why are there exceptions to the general rule?"

Queensland Treasury could not give the figures for each mine that was operating on land and paying private royalties, rather than State royalties.

It was explained as "commercial in confidence". APN was told it would be given updated figures on how much in private royalties had been paid in the past five years, only to be told a week later it was not possible.

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