BHP coal slows, royalties set to drop

The State Government is facing a $100-million cut to royalties
The State Government is facing a $100-million cut to royalties Lee Constable

THE State Government is facing a $100-million cut to royalties after BHP announced a significant reduction in its coal production this year.

Coal royalties have been forecast to be $3.16billion this year, a figure the industry says is far too low considering the booming price for coal, but BHP announced this week that problems at two of its mines which would mean a loss of about 3million tonnes, worth hundreds of millions of dollars for the company.

Industry figures said other miners could jump in make up the difference, which would mean the Government's royalties would be unaffected.

McCullough Robertson's Michael Roche said BHP's cuts could mean prices remain high.

"If that production is not replaced by other producers, at current prices it could shave around $100 million from royalties,'' Mr Roche said.

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