Let's bust some myths about Queensland's coal mine royalty rates! The truth is, the industry's claims don't add up.
You might have heard that Queensland's coal royalty rate is a whopping 40%. Well, prepare to be surprised, because that's not the full story.
Queensland's royalty system is a bit like a sliding scale, with different rates depending on the coal price. And here's the kicker: the average rate based on 2024 prices was a mere 20%. That's right, not 40% as some mining companies and industry groups would have you believe.
But here's where it gets controversial... The royalty rate change implemented in July 2022 addressed a disconnect between royalties paid and coal prices during the price spikes of 2021 and 2022. Prior to this, the highest rate was 15% for coal over AU$150 per tonne. So, when prices skyrocketed, the royalties didn't keep up, which is a bit unfair, right?
Let's look at the numbers. Between 2020 and 2022, Queensland coal prices increased by a massive 246% per tonne, but the old royalty rate only saw a 60% increase in the amount owed. The new rates, however, brought the increase in royalties more in line with the price increase, at 236%.
So, what does this mean? Well, it means that the 2022 change brought the royalty rate back in line with the coal prices, ensuring a fairer system. As prices fell in 2025, so did the royalties owed (as shown in Figure 1).
Now, about that 40% rate you keep hearing about. It's not applied to the entire value of the coal, contrary to what some media outlets might suggest. The 40% rate only kicks in when coal is sold above AU$300 per tonne, and only on the balance above that amount. So, if a miner sells coal at AU$350 per tonne, the total royalty rate applied is 24%, not 40%.
This is similar to our income tax system, where the first AU$18,200 is tax-free, and then different tax brackets apply to the remaining income. It's a fair and progressive system, right?
The 2022 changes only increased the royalty rate for coal sold above AU$150 per tonne, leaving the rate for lower-priced coal unchanged. So, if companies are blaming worker layoffs and financial woes solely on the royalty rate change, it raises some questions. Why aren't their business models sustainable when coal prices are below AU$150 per tonne? And what about all the other rising costs they face, like labour shortages, higher financing costs, and environmental obligations?
And this is the part most people miss... Despite these challenges, the Australian coal mining industry's income remained higher in 2024 than in 2021 and 2022, before the Queensland royalty rate change. Foreign direct investment in Australian mining has also continued to rise, with AU$44 billion invested between 2020 and 2024 (Figures 3 and 4).
So, while there might be some rising pressures on the industry, the data doesn't support the claim that Queensland royalty rates are the primary cause of decreased income and investment. In fact, it seems like other risk factors, like rising costs and changing market dynamics, are having a much bigger impact.
What do you think? Are the industry's claims about royalty rates fair, or is there more to the story? Let's discuss in the comments!
