CMFEU and QRC lock heads over QLD mining taxes

CFMEU district president Stephen Smyth has hit out at a recent QRC survey of mining companies, saying that it does not portray ‘the realities’ of company’s investment intentions.

Smyth says mining companies who took part in the survey saying they would cut expenditure and reduce production, made official reports to the Bureau of Resources and Energy Economics (BREE) of their intention to continue investment and increase production into the future despite recent price declines.

“Reports of the death of Queensland mining industry have been greatly exaggerated,” Smyth said.

“While much has been made by what mining company bosses have told the QRC, what those same bosses have reported to the official resources bureau paints an entirely different picture.

“Many of those companies claiming they’ll reduce operations are continuing to invest. And while some speculative projects – and some mines with higher costs – are cut back, firmly committed investments and expansions will continue.

“This is yet another example of why we must pay attention to what mining companies do rather than what they say.”

The Resources and Energy Quarterly–September quarter 2012, released by BREE in September, reported that ‘the majority of major minerals and energy commodities export volumes are forecast to increase.’

The report stated that thermal coal would increase by 12 percent, metallurgical coal by 12 percent and that an increase of 8 percent was expected for iron ore.

Smyth says the discrepancy between the QRC survey and the Bureau’s official statistics as ‘basic rent-seeking.’

“We’ve seen this approach in their opposition to the proposed RSPT, the MRRT,” Smyth said.

However, the QRC have hit back and told Australian mining:

“The QRC stands by its survey and the analysis of independent experts like KPMG (on tax comparisons) and port Jackson Partners (on costs).”

Chief executive of the QRC Michael Roche told a training sector gathering in Yeppoon today that mining companies face a ‘perfect storm of plummeting prices, rising costs and an Australian dollar that remains stubbornly.’

The QRC are pushing for an indexation of the new royalty rates announced by the Queensland government to ensure they are ‘inflation proof.’

'Unless the thresholds for those stepped rates are indexed, Queensland’s effective tax rate for coal will keep on rising to be far and away the highest in the world and sadly a survey of QRC members has confirmed that this royalty hike is likely to lead to more job cuts and new projects being put on hold,” Roche said.

This is not the first time the CFMEU and the QRC have locked horns.

In early September the CFMEU wrote to the QRC demanding the lobby group drop a proposal to weaken union power.

The QRC's proposal to strip union safety inspectors of the power to close mines infuriated the CFMEU, which said in a statement the reform was "ludicrous".

The QRC accused the union of abusing its ability to close mines and said changes to safety rules would bring regulations closer to those in NSW.

Meanwhile, BHP announced today that it would not start any new projects in QLD while earlier this week Xstrata confirmed it would cut jobs from it’s Oaky Creek mine in the Bowen Basin.

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