Thank you Ben, this is a masterful expose’ if ever there was one. Australians can safely assume that the political, bureaucratic and deluded-activist classes will scramble into their burrows, rather than read and take on board a factual and incriminating analysis of this standard. It’s not what they want to know, and definitely not what they want the public to know. The best prospect is for the voting public to take this on board, and to vote accordingly.
A good piece of writing undercut by a wilfuly ignorant assessment of the QLD Coal Royalty impact. I suggest reexamining the data.
Australian coal exports actually went up, not down, over that period (460 -> 463 MT in 2024 -> 2025 respectively), but the global price of thermal and coke went down ($120 -> $105ish) , which, because of the tiered royalty system resulted in less overall royalties collected.
A very important note is that at current coal prices the 2022 changes to the Royalty scheme have no impact and repealing them would net coal miners an additional $0. The additional Royalties are only applicable with Seaborne Thermal prices >$150/t.
I think the message about structural inability to supply the gas where it's wanted in Australia is something that could certainly be amplified more in popular discussions on the topic, there's no instant-transfer National Gas Grid like there is for Energy.
Edit: Additionally, each and every one of those coal mines purpordedly sunk by the Royalty scheme were already marginal deposits, and only economically viable at high coal prices. They would have naturally wound down as prices fell - look how many times Norwich Park (now Saraji South), or Cook Colliery - have changed hands or gone broke in the last 20 years.
Fully agree with your analysis. It amazes me how people struggle with the current coal royalties that the Queensland government implemented, yet seem to have no issues with how income tax is calculated, which is the same sliding scale. If they actually took the time to compare the new royalties with the old royalties, they'd see how little difference in payments actually occurs.
And yes - all those mines supposedly closed by the royalties scheme definitely were marginal to begin with - especially Norwich Park.
1. Your evidence for the economics of local gas supply vs exports is even weaker than that of Richard Dennis.
At the moment local customers have to compete directly with exports, If there is a 25% export tax, then local customers could offer 20% less than the export price and the gas producer would still be better off supplying locally than exporting. Dennis' 25% reduction in domestic price may be a bit high but it is close.
2. If gas producers did pay a 25% tax on $240bn of exports that would be twice the expected budget deficit this year, so our government would still be collecting less tax than Qatar 30% or Norway 57% and Australians would be $80bn/y better off. Even if gas exports fell by 20% we would still be better off.
3. Norway changed its gas tax regime in 2022, so your argument that other countries don't change taxes falls at the first Google search.
4. Queensland's coal prices fell by an average of 26% between '24 and '25 but revenue only fell by 23% so there is no evidence at all that the royalty change affected volumes. Further at the average price paid as Marnus has pointed out, the new royalty was the same as the old.
5. Queensland doesn't send gas to Victoria. Victoria sends gas to NSW, SA and Tasmania. On some days it sends more gas to other states than it uses itself (just yesterday 346 TJ consumption 361 TJ exports) and on some days Queensland's local production is insufficient to meet local demand and exports, so it imports gas from SA. SA in turn is often a net importer so in effect Victoria, as it has for many years, supports Queensland exports.
6. Victoria's gas demand is falling faster than production. For the last six months gas has supplied less than 1% of Victoria's electricity demand and exports to other states of both electricity and gas have been near record volumes. With batteries already supplying more energy than gas and new renewables and storage coming on line and household electrification proceeding, the decline in gas consumption will only increase
This stuff pisses me off big time. Plenty of sound bites from miners along the lines that Australia is becoming uninvestable, which is really an indictable. And I was so an investor in BCB, arguably who went broke because of the royalty regime. Unfortunately green investments don’t yield the same as coal, and since I’m encouraged to provide for my own retirement via super, I chose to invest in Aussie coal stocks. If it was easy, then Indo coal stocks would be my first pick.
BCB went broke because they had a smooth-brained management team (Nick Jorss and co) who decided to dive into high-strip ratio areas expecting boom time pricing to stay as a permanent fixture instead of focusing on existing low strip ratio operating areas, burning through their capital and nuking their ability to cap raise in one go.
The Royalties may have been the final nail in the coffin but the coffin was truly already built - they didn't even end up paying the Royalties because they went broke prior to paying the bill.
(Also a former BCB investor who saw the way the winds were blowing and got out before they cratered).
If there's one thing that coal mining has a surplus of, it's "smooth-brained management teams". It reminds me of when Curragh mine in the late 1990s spent millions of dollars developing a new coal deposit, which ended up not having any payable coal in it at all because the geologists screwed up the survey. I believe ARCO sold Curragh to Wesfarmers not too long after that occurred...
Thank you Ben, this is a masterful expose’ if ever there was one. Australians can safely assume that the political, bureaucratic and deluded-activist classes will scramble into their burrows, rather than read and take on board a factual and incriminating analysis of this standard. It’s not what they want to know, and definitely not what they want the public to know. The best prospect is for the voting public to take this on board, and to vote accordingly.
Brillliant piece Ben. Very well explained.
A good piece of writing undercut by a wilfuly ignorant assessment of the QLD Coal Royalty impact. I suggest reexamining the data.
Australian coal exports actually went up, not down, over that period (460 -> 463 MT in 2024 -> 2025 respectively), but the global price of thermal and coke went down ($120 -> $105ish) , which, because of the tiered royalty system resulted in less overall royalties collected.
A very important note is that at current coal prices the 2022 changes to the Royalty scheme have no impact and repealing them would net coal miners an additional $0. The additional Royalties are only applicable with Seaborne Thermal prices >$150/t.
I think the message about structural inability to supply the gas where it's wanted in Australia is something that could certainly be amplified more in popular discussions on the topic, there's no instant-transfer National Gas Grid like there is for Energy.
Edit: Additionally, each and every one of those coal mines purpordedly sunk by the Royalty scheme were already marginal deposits, and only economically viable at high coal prices. They would have naturally wound down as prices fell - look how many times Norwich Park (now Saraji South), or Cook Colliery - have changed hands or gone broke in the last 20 years.
Thanks for the feedback.
QLD government data shows a massive drop in coking coal export tonnes from 2022 onwards. Coking coal exports are now below 2010 levels.
Thermal coal exports have increased a little.
Fully agree with your analysis. It amazes me how people struggle with the current coal royalties that the Queensland government implemented, yet seem to have no issues with how income tax is calculated, which is the same sliding scale. If they actually took the time to compare the new royalties with the old royalties, they'd see how little difference in payments actually occurs.
And yes - all those mines supposedly closed by the royalties scheme definitely were marginal to begin with - especially Norwich Park.
Great stuff Ben! 💥
Lovely detail, except:
1. Your evidence for the economics of local gas supply vs exports is even weaker than that of Richard Dennis.
At the moment local customers have to compete directly with exports, If there is a 25% export tax, then local customers could offer 20% less than the export price and the gas producer would still be better off supplying locally than exporting. Dennis' 25% reduction in domestic price may be a bit high but it is close.
2. If gas producers did pay a 25% tax on $240bn of exports that would be twice the expected budget deficit this year, so our government would still be collecting less tax than Qatar 30% or Norway 57% and Australians would be $80bn/y better off. Even if gas exports fell by 20% we would still be better off.
3. Norway changed its gas tax regime in 2022, so your argument that other countries don't change taxes falls at the first Google search.
4. Queensland's coal prices fell by an average of 26% between '24 and '25 but revenue only fell by 23% so there is no evidence at all that the royalty change affected volumes. Further at the average price paid as Marnus has pointed out, the new royalty was the same as the old.
5. Queensland doesn't send gas to Victoria. Victoria sends gas to NSW, SA and Tasmania. On some days it sends more gas to other states than it uses itself (just yesterday 346 TJ consumption 361 TJ exports) and on some days Queensland's local production is insufficient to meet local demand and exports, so it imports gas from SA. SA in turn is often a net importer so in effect Victoria, as it has for many years, supports Queensland exports.
6. Victoria's gas demand is falling faster than production. For the last six months gas has supplied less than 1% of Victoria's electricity demand and exports to other states of both electricity and gas have been near record volumes. With batteries already supplying more energy than gas and new renewables and storage coming on line and household electrification proceeding, the decline in gas consumption will only increase
This stuff pisses me off big time. Plenty of sound bites from miners along the lines that Australia is becoming uninvestable, which is really an indictable. And I was so an investor in BCB, arguably who went broke because of the royalty regime. Unfortunately green investments don’t yield the same as coal, and since I’m encouraged to provide for my own retirement via super, I chose to invest in Aussie coal stocks. If it was easy, then Indo coal stocks would be my first pick.
BCB went broke because they had a smooth-brained management team (Nick Jorss and co) who decided to dive into high-strip ratio areas expecting boom time pricing to stay as a permanent fixture instead of focusing on existing low strip ratio operating areas, burning through their capital and nuking their ability to cap raise in one go.
The Royalties may have been the final nail in the coffin but the coffin was truly already built - they didn't even end up paying the Royalties because they went broke prior to paying the bill.
(Also a former BCB investor who saw the way the winds were blowing and got out before they cratered).
If there's one thing that coal mining has a surplus of, it's "smooth-brained management teams". It reminds me of when Curragh mine in the late 1990s spent millions of dollars developing a new coal deposit, which ended up not having any payable coal in it at all because the geologists screwed up the survey. I believe ARCO sold Curragh to Wesfarmers not too long after that occurred...