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Mining
Yet another battle for the hearts and minds of the Australian people between our bureaucrats and dominant mining sector is quietly brewing.
Whitehaven Coal (ASX:WHC), released a rare public statement today calling on the Feds to rule out a ‘windfall profits’ tax on Australian thermal coal exports.
Stemming from an energy price crisis on the east coast which saw the Albanese Government’s Industry Minister Ed Husic accuse the gas sector of greed a fortnight ago, concerns have grown that gas and coal producers receiving record prices for their commodities could face a ‘super profits tax’.
Echoing the stand-off between WA’s big iron ore miners and the Rudd Government with the Mineral Resource Rents Tax in 2010, which saw the mining sector lead a large and ultimately successful PR campaign against the policy, Whitehaven said the Government needed to ‘clarify its position’.
“Further taxing our coal exports won’t make electricity cheaper for Australian consumers, it will just cost jobs and undermine our reputation as a reliable trading partner,” Whitehaven said.
“The rising cost of living is something the Government must address but a new tax will never be a cure for high domestic energy prices.
“From the Government’s proposed industrial relations and pattern bargaining changes, to the implementation of what amounts to a carbon tax through the Safeguard Mechanism, its management of the Environment Protection and Biodiversity Conservation Act framework and now, a potential additional tax on coal exports, there are ominous signs emerging that the Government is taking Australian mining for granted.
“The compounding nature of the measures the Government is actively considering, or has refused to rule out in the case of a new mining tax, is bad news for jobs and investor confidence and is hard to reconcile with Labor’s stated support for Australian mining – including coal – in its pre-election policy platform.”
Whitehaven made a record net profit after tax of $2 billion in FY22 as the war in Ukraine saw a squeeze on thermal coal supplies that sent them above US$400/t, double previous records to late 2021.
In its plea, WHC says it paid $1b in taxes and royalties in 2022 and will pay more than $2b in FY23.
But it has also made up for lost time, with the rare boom in coal prices being used to soup up returns to shareholders, including a buyback of up to 25% of its stock that could run to $2 billion at current share prices.
Labor Treasurer Jim Chalmers this week distanced himself from the idea of implementing a tax, even as domestic price caps have been put on the agenda.
There have been notable stand-offs this year between governments and miners over the profits they have seen since the Russian invasion.
Notably, Queensland raised royalties from July 1 on local coal mines in the state, potentially raising billions this year, with the introduction of three new tiers above the old $150/t top threshold including a top tier of 40% of each dollar earned above $300/t.
The policy has seen the world’s biggest miner, BHP (ASX:BHP), say it will not invest any growth capex at its Queensland met coal mines and call for its repeal.
Coal miners were among the big winners today as prices lifted overnight, with Whitehaven up 6.32%.
New Hope (ASX:NHC) shares rose 4.51%, Stanmore (ASX:SMR) stock climbed 4.9% and TerraCom (ASX:TER) lifted 9.74%.
Coronado (ASX:CRN) shares were up 2.94%.
Iron ore miners were generally green with prices generally holding their China led gains this week. Singapore 62% Fe futures were up 2.51% to US$97.10/t today.
Materials lifted 0.5% with energy stocks up 1.19%, as big battery metals stocks also recovered some of their losses from yesterday’s wipeout.
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