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Royalties to hurt miners: Ferguson

Federal Resources Minister Martin Ferguson: Recent actions by the Queensland Government will only exacerbate the impacts of lower commodity prices.
Federal Resources Minister Martin Ferguson: Recent actions by the Queensland Government will only exacerbate the impacts of lower commodity prices.

FEDERAL Resources Minister Martin Ferguson has taken a dig at the Queensland Government move to increase mining royalties.

But Mr Ferguson, in a speech to industry leaders yesterday, failed to mention the Commonwealth's minerals resources and rent tax.

He said the falls in commodity prices, particularly for coal and iron ore, would see minerals and energy export revenue fall 2% in 2012-13 to $190 billion.

"I imagine most of you would be aware of my comments that we have seen the end of the current cycle of high commodity prices," he said.

Mr Ferguson said the recent announcement of job losses at BHP and Xstrata operations in Queensland indicated the "squeeze on margins - a squeeze not assisted by royalty changes that focus on price, not profitability".

"Recent actions by the Queensland Government will only exacerbate the impacts of lower commodity prices."

But Queensland Resources Council chief executive Michael Roche said on Tuesday that while coal prices were going down, "costs in Queensland have been heading in the other direction".

He said low cost metallurgical coal producing countries like Mongolia and Mozambique were making major in-roads into Australia's traditional markets in Japan, Korea, India and China.

"This is why the Queensland Budget's coal royalties hike can't be viewed in isolation or written off as a minor impost," he said. "You can't have the highest taxing, highest cost coal industry in the world and expect to keep sailing along merrily.

"That is why seeing job losses, mine closures and the shelving of new coal projects."

Topics:  martin ferguson, michael roche, minerals resources and rent tax, mining royalties


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