Queensland Treasurer Cameron Dick has warned BHP that he may cancel the major miner’s leases in the state unless the company backtracks on its decision to pause new investments.
In BHP’s operational review in January of this year, the company said that, while the market for coal is expected to be boosted due to increased demand from China, Queensland had become “uncompetitive” as a result of its controversial tax.
“The Queensland Government’s decision to raise coal royalties to the highest maximum rate in the world makes Queensland uncompetitive and puts investment and jobs at risk,” BHP stated.
“We see strong long-term demand from global steelmakers for Queensland’s high-quality metallurgical coal; however, in the absence of government policy that is both competitive and predictable, we are unable to make significant new investments in Queensland.”
Following the review, BHP said it planned to divest the Daunia and Blackwater coal mines in Queensland.
“Whilst high-quality assets with growth potential, the Daunia and Blackwater mines would struggle to compete for capital under our current capital allocation framework, including given our choices for deploying capital globally,” BHP said in a report at the time.
Now, Dick has urged the miner to reconsider, saying that the Queensland Government would look at cancelling BHP’s leases if it doesn’t complete its investments.
“The strength of BHP’s balance sheet and the impending windfall it will make from selling the Daunia and Blackwater mines shows just what BHP can achieve when it focuses on its core business,” Dick said.
“We want those companies to properly develop the leases that they have been granted by the people of Queensland. If they fail to do so without legitimate commercial reason, our government has the power to act.”