CANBERRA: Tax revenue from coal production in the Australian state of Queensland is forecast to rise to A$1.93 billion ($1.4 billion) in fiscal year 2016-2017 (July-June), based on assumptions that hard coking coal prices will average $100/mt in the next fiscal year and recover from $90/mt forecast for this fiscal year, said Queensland treasurer Curtis Pitt in his mid-year review Tuesday.
Total mineral tax revenue for the state is, however, expected to slide by A$9 million this fiscal year to A$2.35 billion from A$2.44 billion at the time of the treasurer’s July budget.
This is because of a collapse in petroleum and gas royalties to only A$33 million for this year, from A$129 million forecast five months ago, he said.
The Queensland treasurer revised higher Tuesday his estimate for government coal production royalty revenue for the 2015-2016 fiscal year to A$1.73 billion after forecasting at his July budget that taxes on the state’s coal producers would yield A$1.68 billion for the 2015-2016 fiscal year. Queensland’s government collected A$1.61 billion in royalty taxes in the 2014-2015 fiscal year.
Coal producers in the Australian state pay a royalty tax at a percentage rate per metric ton on their coal production, and currently the percentage rates vary from 7% to 15%, and the tax is based on market prices for coal.
Queensland’s taxable coal production is expected to reach 213 million mt in the 2015-2016 fiscal year, and then rise to 218 million mt in 2016-2017, according to treasury papers for the mid-year budget review. Coal production in Queensland for the 2017-2018 fiscal year is forecast to be 225 million mt, said the treasury papers.
The Queensland treasury estimates that hard coking coal prices will rise to an average of $100/mt for the 2016-2017 fiscal year, from an average of $90/mt in the current fiscal year. Semi-soft coking coal prices are expected to recover to $82/mt next fiscal year from $78/mt, according to the treasury papers.
Thermal coal prices are expected to average $65/mt this fiscal year and next, and then to edge up to $67/mt for the 2017-2018 fiscal year, said the Queensland treasury. On Monday, Platts assessed Australian low-volatile hard coking coal at $75/mt FOB, semi-soft product at $61.55/mt and Newcastle thermal coal at $52/mt.
