BHP to steer clear of new investment in Queensland
BHP chief executive Mike Henry said the global miner would not make any new greenfield investment in Queensland after the state’s controversial new coal royalty regime made it too risky to invest.
While Treasurer Cameron Dick has threatened to cancel BHP’s mining leases in Queensland unless it continued to invest in the state, the BHP boss acknowledged the company would continue to expand its existing operations to take advantage of strong metallurgical coal prices.
Queensland Treasurer Cameron Dick said mining leases would be cancelled if not used. Jamila Toderas
The Labor government and the mining giant have been locked in a war of words since Mr Dick blindsided the resources sector when he introduced three new tiers of coal royalties in July last year.
BHP is in the process of selling two of its Queensland mines, Daunia and Blackwater, but has kept its most valuable coking coal mines, including Goonyella, Riverside, Peak Downs and Saraji.
Mr Henry said the challenge remained that Queensland’s royalty regime, which required BHP to pay another $700 million last financial year, made other states or countries a better investment destination.
“I don’t think we are saying anything particularly controversial; lower returns, higher risk means other investments become more attractive,” he said after BHP released its results on Tuesday.
“The only thing I would note is we are continuing to invest in these Queensland businesses. BMA [BHP Mitsubishi Alliance] is investing over a billion dollars a year in keeping these operations going because we do see the business as attractive.”
In its statement to the ASX, BHP said the coal royalty hikes had negatively impacted the “investment economics” of Queensland and increased sovereign
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