“We are hearing similar concerns from our project partners, industry peers, investors, customers and suppliers, as well as Central Queensland communities where the impact will be most acute,” Basto said.

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“Investment decisions about future developments and operations are made many years in advance, and are heavily influenced by investment certainty – or the lack of it – so while the impact may not be felt for a few years, it will come as companies and investors look to invest capital elsewhere in Australia or overseas.”

Previously, Queensland’s highest coal royalty rate was 15 per cent for coal sold above $150 a tonne. Under the new regime, which took effect on July 1, the state applies a royalty rate of 20 per cent for coal price above $175 a tonne, 30 per cent for prices above $225 a tonne, and $40 per cent for prices above $300 a tonne.

Treasurer Cameron Dick last month said multinational coal companies had benefited from royalty arrangements that had been frozen by successive Queensland governments for nearly a decade.

“Few industries in the world have enjoyed such a long period without change – but from July 1, the 10-year freeze comes to an end,” he said. “It is time for new arrangements to be implemented – arrangements that reflect coal prices in excess of $500 per tonne, not the $150 per tonne for which the existing royalties were designed.”

Coal usually ranks as the country’s second-largest export commodity, but prices for the fossil fuel have been rocketing this year as Russia’s invasion of Ukraine drives buyers across the globe to scramble to secure non-Russian coal supplies.

In a sign of the enduring near-term demand for coal despite accelerating global action on emissions, data from the Australian Bureau of Statistics revealed earnings from coal shipments jumped to $14.7 billion during May, briefly surpassing iron ore for the first time in 13 years.

Queensland’s new royalty regime is forecast to deliver the state an additional $1.2 billion in royalties. “All of that $1.2 billion, and more, will be going into regional Queensland,” Dick said.

Analysts had been expecting Queensland to lift its royalties, but the size of the increase and lack of consultation could set a “concerning precedent”, some said, especially as more governments sought to balance their post-pandemic budgets.

Investment bank UBS said other mining regions like Chile, Peru and Canada may be “emboldened” by the tax increase, which could affect investment in commodities and force higher prices.

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