The Queensland Government anticipates that lower coal royalties will send a considerable blow to its 2020-21 state budget, with a $4 billion cut expected over the next four years.
Queensland’s royalties and land rents are expected to be 44 per cent (or $2 billion) lower in 2020-21, partly due to lower coal prices and volumes.
A majority of this revenue is attributable to the hard coking coal used in steel production, as coal royalties are expected to further drop by more than half from the already reduced royalties in 2019-20.
Queensland’s coal royalties totalled $3.5 billion in 2019-20, almost 20 per cent lower than the previous period and 5 per cent lower than forecast.
This reflects the continued impacts of COVID-19 and uncertainty around Chinese coal import ban, which could push coal prices further in early 2021.
As the global economy begins to recover, however, the Queensland Government would expect coal demand and prices to rebound towards $US140 ($189) per tonne.
Queensland Resources Council (QRC) chief executive Ian Macfarlane said the QRC shared Treasurer Cameron Dick’s firm confidence that it would rebound.
“That’s why we welcome the announcement of a $200 million Future Skills Fund and the government’s commitment to work with our sector on the implementation of a first ever Queensland Resources Industry Development Plan.
“Queensland can transition to a global energy superpower thanks to the quality of our coal and gas reserves and abundant renewable opportunities.
“…You can count on resources to help Queensland recover.”