- 22 Jun 2022
- ICICIdirect Research
QUEENSLAND MOVE TO INTRODUCE NEW UPPER TIERS TO COAL ROYALTY REGIME LIKELY TO INCREASE OPERATING COSTS FOR INDIAN STEEL COMPANIES
News: Australia's Queensland government has introduced new upper tiers to its coal royalty regime to earn additional revenue from higher prices from 1 July, 2022. The Australian government has set new progressive rates, effective July 1, at a 20% royalty on coal prices over A$ 175 a tonne, 30% for prices above A$ 225/tonne and 40% for prices over A$ 300/tonne. Previously the top tier was a 15% royalty on prices over A$ 150/tonne
Views: Coking coal is one of the key raw material in steel making process and Australia is one of the major exporters of coking coal globally. If the Queensland miners decide to pass through the additional royalty hike, it is likely increase the operating costs of Steel companies. Whether or not Queensland miners pass through this royalty hike would remain a key monitorable, going forward
Impact: Negative