Is The Cancellation Of A $2 Billion Qld Mine A Sign Of Things To Come?

Glencore’s decision to withdraw from plans to develop a $2 billion coal project south-west of Emerald is a sign of things to come, says Queensland Resources Council (QRC) Chief Executive Ian Macfarlane, in the wake of the State Government’s decision to impose “excessive” new royalty taxes on coal producers.

Glencore’s Valeria project south-west of Emerald would have created 1400 construction jobs and 1250 operational jobs.

QRC Chief Executive Ian Macfarlane said Glencore had made it clear the Queensland Government’s royalty hike was a factor in its decision to cancel the project.

“Companies take into account a broad range of factors when considering multi-decade, large-scale investments in projects like this, and regulatory stability is one of those factors,” he said.

“Glencore has commented that ‘abrupt decisions like the Queensland super royalty hike have damaged investor confidence, increased uncertainty and raised a red flag with key trading partners’, which is consistent with the QRC’s position from day one – this royalty hike will affect long-term investment in this state.”

Mr Macfarlane said previous Queensland governments have offered stable and consistent investment environments for resources projects, but that was no longer the case in Queensland.

“The Queensland Government does not appear to appreciate the impact of its decision to lift coal royalty taxes to the highest rates in the world,” he said.

“Short-term political decisions like this make it harder for companies to invest here and send a signal to shift their focus to other destinations that offer better returns to investors.”

Mr Macfarlane said the QRC has repeatedly warned the government of the long-term impact of its decision to over-tax coal producers on investment in resources projects across the board, not just coal.

“Unfortunately, our concerns have fallen on deaf ears,” he said.

“We now have a situation where major mining companies such as BHP, Peabody and Glencore are rethinking their investment plans for Queensland, which means every Queenslander loses out in terms of new jobs and business opportunities and the flow-on benefits from that.

“Sudden changes in the rules for investment discourage investors from future job-creating projects, which should be a major concern for any government."

Federal Member for Dawson, Andrew Willcox echoed the concern, saying the recent decision from Glencore to can their $2 billion investment into a mine in Queensland shows the cracks beginning to appear in Queensland’s coal sector.

“One of the biggest tragedies in the withdrawal of the Glencore Project, are the job opportunities that will be lost.  Regions like ours are built on these jobs. They bring so much local investment and boost our local economy,” Mr Willcox said.

“Mining companies are used to the boom & bust cycle.  So in good times like these, they use profits for further exploration, upgrade their mining equipment and rehabilitate previous mines sites which creates job opportunities within our region.

“Instead, the coal royalties hike squashes further development, which will affect our region when coal prices reduce”.

Mr Willcox criticised the State Government for making decisions that impede regional communities.  

“The profits being generated in Central Queensland should be reinvested in Central Queensland and not spent in the southeast corner”.

“This is happening again and again, and the people of Dawson are sick of it, especially when their roads are crumbling, the health infrastructure is failing and critical services aren’t being maintained,” Mr Willcox said.

“When we have city centric, and suburban obsessed governments, the whole nation suffers. Regions like Dawson do so much to generate the nation’s wealth, but we are being flat out neglected by a government who is happy to shout their own praise and boast of their budget, having little regard for those who bring about the profits.

“Labor needs to govern for the entire state of Queensland, not just for the cities of the SE corner.  They need to start looking after our rural and regional powerhouses.”

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Federal Member for Dawson, Andrew Willcox is concerned that high coal royalties will result in the withdraw of future coal projects in Queensland