BHP Billiton has attacked the Queensland Government for a second consecutive day for hiking coal royalties, warning the state would leave itself with less revenue due to an investment exodus.
The world’s biggest mining company’s chairman, Jac Nasser, accused both federal and state governments of naively thinking the mining boom would go on forever.
BHP, Rio Tinto and other miners threatened to pull investment in Queensland, Australia’s largest coal producing state, on Tuesday.
Tuesday’s Queensland budget increased coal mining royalties in a move predicted to generate $1.6 billion over four years.
Mr Nasser said the falling coal prices, high capital costs and high Australian dollar meant things had changed dramatically for coal miners in recent times and he believed many were currently cashflow negative.
“What we’re going through now is a wake-up call for everybody, including people in the industry, that God didn’t intend for this to stay this way forever,” he told a Melbourne business luncheon.
“It is a cyclical industry in a cyclical global economy … even if we’ve been fortunate in the last decade that the cycle has been longer and stronger.”
He compared the royalty hike to “shooting some of the best athletes in the left foot” and would only cost jobs and damage confidence in investing in Australia.
Government policy and tax regimes needed to provide long term certainty for corporations, he said.
“Why would you want to do that (increase royalties) when you’ve got an industry that could be competitive, generate flow on research, investment and employment and we’re pretty good at it,” Mr Nasser said.
“There will be consequences.
“No change in taxation policy in Australia is a good thing.
“Every time there’s a change it seems to be to the detriment of industry.”
Queensland Premier Campbell Newman hit back at the mining industry on Wednesday saying it was responsible for its own problems, saying management had allowed costs to increase and had failed on industrial relations.
Mr Nasser said despite what he said was a cyclical downturn currently occurring in China, he was confident the country had more substance than risk.
As a diversified resources and energy company, BHP was less sensitive to falling coal prices or oil prices than others, he said,.
He was less positive about Europe’s economic prospects, warning that its problems were fiscal and structural, rather than cyclical as governments spent more than they earned.
“There is either negative growth or no growth, a declining population, disparity between the northern countries and southern countries and stubborn unemployment, 25 per cent in Spain and Greece,” Mr Nasser said.
