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 in the wake of the Palaszczuk Government’s decision to impose excessive new royalty taxes on coal producers, the Queensland Resources Council said today.
Glencore’s Valeria project south-west of Emerald would have created 1400 construction jobs and 1250 operational jobs and was projected to operate for 37 years.
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.
“Japan’s Ambassador to Australia Yamagami Shingo has also made it clear the relationship between Queensland and Japan has been damaged by the way in which the royalties were unilaterally introduced, without any consultation with industry or investors.
“Sudden changes in the rules for investment discourage investors from future job-creating projects, which should be a major concern for any government.”
Mr Macfarlane said the QRC will continue to be open to a meeting with the government to discuss a more balanced approach to supporting the state economy without jeopardising the industry’s future.