Whitehaven Coal CEO Paul Flynn has taken aim at Queensland’s controversial coal royalty scheme, describing it as “borderline madness” as miners face the looming threat of a 40 percent royalty on revenue — even as coal prices remain under pressure.
Flynn expressed frustration over the policy, pointing out that coal producers are just $5 per tonne away from triggering the top-tier royalty rate. He called it “extraordinary” that companies struggling with falling global coal prices could soon be hit with such a steep tax, regardless of profitability.
The royalty scheme, introduced in 2022 by the Queensland government, includes a sliding scale that ramps up dramatically at higher coal price thresholds. If prices exceed $300 per tonne, producers are required to pay a 40 percent royalty on revenue from that point upwards. With current prices hovering just below that threshold, the industry is on edge.
Flynn argues that this structure is punishing producers in a volatile global market. “We’re facing declining prices, higher costs, and regulatory burdens — and yet the government is poised to extract more, just because a nominal price ticks over a line,” he said.
Industry leaders and analysts have warned that the royalty structure risks deterring future investment and weakening Australia’s position as a competitive global coal supplier, especially when producers are already under pressure from decarbonisation policies, rising operational costs, and market uncertainty.
The Queensland government has defended the royalties as a way to return more value to the public from the state’s natural resources, particularly during periods of high commodity prices. However, Flynn and others argue that the system lacks nuance and fails to account for fluctuating margins and the cyclical nature of commodity markets.
The coal industry is now urging the state government to reconsider the structure — or at least introduce flexibility that accounts for profit, not just price points — before producers are pushed to cut operations, delay investment, or shift focus elsewhere.
