A SURVEY of Queensland's coal companies shows they all expect to cut costs, including shedding staff, to cope with a hike in mining royalties.
The survey by the Queensland Resources Council shows that cost-cutting measures include reducing employee and contractor numbers, cutting rail and port costs and cuts to exploration expenditure.
QRC chief executive Michael Roche said the increased royalties came at a time when the industry was already under stress from the high Australian dollar, rising labour and materials costs and falling commodity prices.
"The combination of 30% company income tax and the new royalty rates will mean Queensland will carry an effective taxation rate of 50 percent on a typical coking coal operation," Mr Roche said.
"This gives us the dubious honour of being the highest taxing coal jurisdiction globally.
"This effective royalty rate will increase each year if the coal royalty thresholds are not indexed.
"In the absence of coal royalty thresholds being indexed, the resultant bracket creep will mean that the government's promise not to increase royalties again for 10 years cannot be delivered."
Mr Roche said comments by the Queensland Treasurer over the weekend that he wanted to work constructively with the industry gave him hope that the Queensland Government would give serious and prompt consideration to QRC's submission calling for indexation of coal royalty thresholds.
"While the current difficulties for the industry are part of the normal cycle, albeit exacerbated by a stubbornly high Australian dollar, issues such as increasing royalties and threats of further federal taxation increases do nothing to encourage continued investment in Australia's resources sector," he said.
"While this sector intends to be here for the long term, governments-federal, state and local-can't take for granted that resource companies can continue to absorb increasing costs and constantly changing goal posts.
"Our industry is already placed very high on the global cost curve.
"Our CEOs were unequivocal in saying in their survey responses that the royalty increase would considerably influence the economics of proposed new coal projects.
"In addition, our metalliferous and gas sector members expressed a concern that they would be targeted next for a royalty increase as the Queensland Government continues its quest to bolster its revenue base."
Treasurer Tim Nicholls said the government was determined to ensure Queenslanders received a fair return from the coal and other resources they owned.
He downplayed the effect of the royalty hike and said increases in industrial action and production costs, the softening of commodity prices and the high Australian dollar were responsible for a downturn.
"'Closures announced to date have occurred due to lower prices, increased production costs and efficiency issues," he said in a statement.
"'We hope to continue to work with industry constructively. However, if that is not the QRC's attitude we will be very disappointed.'"