A row over the NSW coal royalty levy has erupted between the NSW government, Unions and the State’s miners, as the NSW government considers increasing coal royalties to 10%.
The government is considering introducing a royalty rate of 10% on coal worth more than $100 a tonne, with a decision expected in the NSW government’s mini budget on Tuesday.
The move could potentially boost the State’s take from the industry to $1.5 billion. NSW Minerals Council CEO Dr Nikki Williams has expressed extreme concern at the reports, given the state of the global financial crisis.
“A royalty hike at this time would compound the economic pain resulting from the constraints at the Port of Newcastle, which cost the industry around $300 million a year in demurrage penalties alone,” Williams said.
“These constraints represent a loss of export revenue estimated at $2 billion over five years and tens of millions of dollars in additional royalties for the people of NSW.
“The NSW coal industry’s ability to withstand these unprecedented global economic forces is finely poised.”
A $600 million royalty rise in Queensland this June was met with a similar backlash from the resources industry.
The CFMEU has backed the government’s plan to increase the royalty levy on export coal valued over $100 per tonne, saying coal mining communities deserve a fairer go. However, the Union does not support an increase across other coal products.
“Our Union has called on the NSW Government to fall in line with its Queensland counterpart and raise the levy to 10% on export coal valued at over $100 a tonne,” a CFMEU statement read.
CFMEU General Secretary Peter Murray said that such a move would boost Government income to provide for mining communities.
“Some of this additional money should be used to address problems in over-stretched coal mining communities,” Murray said.
“Every Central Bank in the world is taking drastic steps to avert a global recession in an effort not only to shore up the global banking system but to stimulate economic activity and investment.”