Australian developers spent $55 million ($36 million) on coal exploration projects in Queensland, the country's main coking coal mining region, in July—September, down 7.9% from a year earlier, marking the fifth consecutive quarterly decline due to low prices and high royalties.
Mining companies have invested $145 million in coal exploration projects since the beginning of 2025, down 22% from a year earlier, according to data from the Australian Bureau of Statistics.
This year, producers in the state have faced increased royalty rates and volatile coal prices, which has reduced incentives for new investments.
The Argus price for premium low-volatility metallurgical coal on fob terms in Australia fell from $200.80 per tonne on January 2 to $166 per tonne on March 20, after which it recovered to $189.25 per tonne by the end of September.
But the modest price recovery in April-September brought little relief. Australian miners, Qcoaland BHP suspended maintenance of mines in Queensland in September, citing low coal prices and high royalty rates.
BHP, which operates the mines through the BHP Mitsubishi Alliance, a joint venture, also informed investors on August 19 that the government's royalty regime limits the financial benefits of price increases.
The company stopped new coal investments in Queensland shortly after the government changed its progressive royalty regime in 2022, which raised marginal royalty rates at most price levels.
Perhaps BHP was not alone. Whitehaven Coal, which operates mines in Queensland and New South Wales, said in late August that the government's royalty regime was encouraging producers to invest outside Queensland.
Three other manufacturers (see table) have sought to reduce royalties or scale back operations since the beginning of 2025, citing high royalty rates and costs.
More broadly, coal producers' spending on business purchases, utility bills, and government payments decreased by AUD$5.2 billion in fiscal year 2024-25 as of June 30. This probably reflects a slight decline in investment, as royalty payments also decreased by about 5 billion Australian dollars per year.
The Queensland government has promised to maintain the current royalty payment regime in the state, introduced before he took office, at least until the next state election in 2028.
"[Queensland's]The government provides confidence in the Queensland coal industry through faster solutions, simplified approval procedures, and a stable royalty payment regime.
