Glencore, BHP and Whitehaven Coal are pushing for mine approvals to become a priority for the NSW Government after it was announced that coal royalties would increase from July 2024.
NSW announced this week it would increase its coal royalties to 10.8 per cent for open cut mining, 9.8 per cent for underground mining and 8.8 per cent for deep underground mining.
The previous rates stood at 8.2, 7.2 and 6.2 per cent respectively.
NSW Treasurer Daniel Mookhey told reports the decision would help clear the state’s budget. It is the first time coal royalties have been changed in 14 years.
However, some major miners have expressed concerns, saying that the decision would make it hard to have confidence in making investments in the sector.
“The overall impact of this cost increase on top of other recent state and federal policy changes makes doing business harder and more uncertain,” a BHP spokesman told the Australian Financial Review.
Whitehaven chief executive Paul Flynn expressed concerns that the increase would amount to a drop in confidence in the sector.
“Today’s decision will unquestionably add to inflationary pressures impacting our sector and adds to a range of unhelpful policy interventions… that undermine confidence in our future,” Flynn said.
Glencore agreed, asking the NSW Government for more clarity on future coal mine investments.
“The NSW Government now needs to provide policy clarity for the treatment of future coal mine investment and approvals as part of delivering on its coal royalty expectations,” Glencore said.
In December last year, Glencore pulled out of its $2 billion Valeria project in Queensland, citing significantly increased taxes as part of Queensland’s coal royalties.