The Queensland government says holding on to mining royalties is not at odds with the federal government’s plans to scrap Labor’s minerals resource rent tax (MRRT).
Queensland Treasurer Tim Nicholls made the comments while officially opening a $2 billion 20-year extension of Rio Tinto’s Kestrel underground coal mine near Emerald, in central Queensland.
“Well no I don’t think so, we made a decision in relation to royalties that said quite clearly the coal in the ground is an asset of the people of Queensland,” he told reporters.
“lt’s a non-renewable resource, once it’s gone it’s gone and it is entirely appropriate for the people of Queensland to see a fair price for it.”
Last month, premier Campbell Newman ruled out another rise in royalties while opening BHP Billiton and Mitsubishi’s Daunia coal mine.
The state taxes have been causing tension between coal miners and the Queensland government.
Mr Nicholls said the fact that Rio Tinto and BHP were still opening new coal mines in the state – BHP will soon open a third at Caval Ridge – was proof the tax regime was not too onerous or a disincentive to resources companies.
“It is yet more evidence that businesses have the confidence to invest, employ and grow here,” he said.
Speaking alongside Mr Nicholls, Rio’s energy chief Harry Kenyon-Slaney said he understood the need for taxes, and said the company was working closely with the government.
But no business liked additional imposts placed upon it, Mr Kenyon-Slaney said.
The extension to the Kestrel mine will add 20 years to its lifespan and increase production of hard coking coal – used in steelmaking – to around six million tonnes a year.
Rio’s energy division posted a $52 million loss in the first half of 2013, and some analysts are predicting tough times for the industry in Australia, due to high costs.
But Mr Nicholls said record tonnages of coal were being exported out of Queensland, and $2 billion in rail expansions by Aurizon and BHP Billiton and Mitsubishi would boost the industry.
Rio Tinto owns 80 per cent of the mine and Japan’s Mitsui the rest.