A multinational mining company will make no further large investments in at least one fossil fuel due to Queensland’s extreme revenue raising.
BHP recently ruled out significant spending on coal production across the Sunshine State, following the State Government’s recent decision to impose the “world’s highest coal royalty tax rates”.
“We are not going to be deploying any major capital into the Queensland coal business in the face of the recent royalty changes and the way that they were gone about,” CEO Mike Henry said at an investor and analyst briefing.
“I think at this point it is a bit of a moot point.”
Henry revealed his employer could still proceed with its proposed $1 billion Blackwater South Coal Project, about 230km west of Rockhampton. However, a final decision depends on the development’s economic feasibility.
“Would we even trigger South Blackwater? If circumstances change … it [still] depends on whether the project is attractive and competes well in the capital allocation framework or not,” he said.
“We are still miles away from knowing the answer to that question but, of course, any investment would be predicated as well upon the risk of that investment being acceptable – and that comes back to needing to have comfort around the stability of the fiscal terms that you are investing against.”
The proponent will also have to find ways to make green steel technologies more affordable.
“We would also have to be confident in the market outlook and in respect of the market what we have said is that – for the foreseeable future – blast furnace steelmaking is going to need to remain, because the true green steel technologies are still too early stage and the economics have yet to be improved further,” Henry said.
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