From Brisbane: The argument has been building for nearly four years, but it has now hardened into something close to a full rupture. BHP, the world's largest mining company by market capitalisation, has frozen new investment in Queensland, with chief executive Mike Henry sharpening his language about the state's coal royalty settings to a degree that leaves little room for diplomatic retreat.
The immediate trigger is a tiered royalty structure introduced without industry consultation in mid-2022. Three new tiers were added to Queensland's coal royalty system, setting rates of 20 per cent for coal prices above $175 per tonne, 30 per cent above $225 per tonne, and a 40 per cent tier that kicks in when prices exceed $300 per tonne. By comparison, the maximum rate is 10.5 per cent in New South Wales and 7 per cent across the United States. BHP has described the result as "the highest coal taxing regime in the world."
For the communities strung across Central Queensland's Bowen Basin, this is not an abstract policy argument. Under Queensland's scheme, BHP's Mitsubishi Alliance business paid eight times the sum in royalties and tax that it made in profits, a squeeze that led to the mothballing of the Saraji South metallurgical coal mine and the axing of about 750 jobs across the state. The job losses reverberate throughout Central Queensland's mining communities, with the town of Dysart among those feeling the impact most directly.
Henry's position, consistently stated since 2022, is that the royalty hike was both economically damaging and procedurally improper. He has described the increase as "quite sudden" and said it "didn't involve any engagement with industry," which in BHP's assessment significantly raised the sovereign risk associated with Queensland. "We're paying 67 cents on every dollar in taxes and royalties," Henry told shareholders, adding that "government inaction is having real impacts on regional jobs and towns, and without change, inevitably, there's going to be more difficult decisions that need to be made."
Premier David Crisafulli has refused to change the scheme, which was introduced under the previous Labor state government, taking a swipe at mining companies who blamed royalties for job cuts by branding them "fairweather friends." The LNP government, which took office after the 2024 state election, committed to maintaining policy stability by not adjusting the royalty regime, a position they took to the election. Queensland Treasurer David Janetzki, for his part, has attributed the job losses to rising production costs and lower coal prices.
There is genuine substance to that counter-argument. Independent energy finance analysts at the Institute for Energy Economics and Financial Analysis have argued that rising costs are straining coal mine economics, with past volume-over-cost strategies contributing to current financial pressures, and that some Queensland coal mines are currently unviable due to prices falling below production costs. The IEEFA's analysis suggests the royalty regime, while a genuine cost factor, is not the primary driver of the sector's pain. Miners hoping to restart or on-sell mothballed mines will find it more convenient to blame high government royalties than to declare them uneconomic.
The Mining and Energy Union has been blunter still. MEU president Mitch Hughes accused BHP of "using coal workers and communities as pawns in its fight with the Queensland government over royalties," insisting that "workers need facts, certainty and security, not alarmism." Critics also point to the fact that BHP has lodged applications to expand coal mines in Queensland, including at the Saraji complex itself. "If royalties really were to blame, BHP would not be trying to build three giant new coal projects," argued Ellen Roberts of the Lock the Gate Alliance. Hughes added that BHP profited "immensely" despite high royalties when coal prices peaked at around $900 per tonne in 2022 and 2023.
The broader industry damage, though, is difficult to dismiss. BHP's cuts, combined with reductions by Anglo American, pushed confirmed 2026 job losses beyond 900 roles, with other mid-tier miners including QCoal also signalling production slowdowns. Queensland supplies around 50 per cent of the world's seaborne metallurgical coal, feeding steel mills in Japan, South Korea, and India. A sustained retreat from the state's Bowen Basin would have consequences well beyond the royalties debate inside the Brisbane cabinet room.
The Queensland Resources Council has long warned that the state's settings are driving capital toward Western Australia, South Australia, and competing jurisdictions overseas. BHP's Henry has stated the company now has "opportunities to invest for better returns and lower risk elsewhere around the world, as well as in Australian states like Western Australia and South Australia," and has confirmed it will not invest further growth dollars in Queensland under current conditions.
What the standoff reveals is a genuine tension that neither side has fully resolved. The Queensland government has a legitimate claim that publicly owned resources should generate meaningful returns for taxpayers, and the 2022 to 2023 coal price boom tested whether the old royalty floor was doing that job. At the same time, a revenue-on-sales structure levied regardless of profitability creates a uniquely sharp bite during price downturns, and the lack of industry consultation in 2022 did real damage to investor confidence that competitive tax rates alone cannot fully repair. Reasonable people, including economists, disagree on where precisely the right rate sits. What is harder to dispute is that both sides bear some responsibility for a dispute that has now cost hundreds of Queensland jobs and shows little sign of resolution.