Loophole lets miners skip royalties on coal

A New Acland coal mine pit is progressing in a southerly direction.
A New Acland coal mine pit is progressing in a southerly direction. Stuart Cumming


A LEGAL loophole means many mining giants do not have to pay the state millions of dollars in royalties on coal they mine.

And one activist group has seized on the century-old property technicality, claiming New Hope Group's New Acland Stage 3 expansion will generate no royalties for the State.

Stop Brisbane Coal Trains believes the property law rule will mean Queensland will miss out on $450 million over the life of the mine.

"New Hope has bought up 10,000ha at Acland and owns the vast bulk of all the mineral rights to the coal underneath the ground, due to this royalty anomaly," SBCT spokesman John Gordon said.

"It turns out they're paying themselves, i.e. their own subsidiary, the Acland Pastoral Company (APC), the coal royalties.

"The State of Queensland gets nothing. No hospitals, schools, nothing. Just scraps."

Mr Gordon believes the state will lose out on training 2500 doctors or 28,000 teachers.

An NHG spokesperson said it was paying royalties to both third-party landholders and the state.

Since 2009 the group has paid $175 million.

Some mines are situated on land where the coal is owned by the State as well as on land under the century-old deed of title.

"In many old land title areas in Queensland, (pre 1910) royalties are required to be paid to private landholders if they have title to the subsurface," the spokesperson said.

"When the company initially purchased the land from landholders for the mine it gave sellers the option to keep their subsurface title, so they are paid royalties - or be paid a premium."

The spokesperson said the royalties for revised Stage 3 would be hard to calculate because it depended on the tonnage of coal mined and produced, from which specific title and area of the mining lease and the coal price and exchange rate at that time.

"Based on land area calculations of State-owned land in the New Acland Stage 3 area, the percentage of royalties paid to the State from the project is approximately 7%," they said.

"It should be remembered that in addition to royalties there are many other economic benefits to the local community, region and state that New Acland mine brings."

In the 10 years up to December 29, 2009, the state missed out on $554 million in royalties from Queensland mines because that was paid to private owners.

Queensland Treasury could not give the figures for each mine that was paying private royalties, rather than State royalties.

It was explained as "commercial in confidence".

But APN was told it would be given updated figures on how much private royalties had been paid in the past five years, only to be told a week later it was not possible. 

Royalties law "accident of history"

FORMER Treasurer Andrew Fraser once labelled the property law rule as an "accident of history".

It means certain blocks of land titled before 1910 give ownership of the coal below the land's surface to the landholder rather than to the State Government.

As Mr Fraser once dismissed amending the legislation so the state received the royalties, Treasurer Curtis Pitt is also not considering it.

A spokesman for Mr Pitt said the government had no plans to review the legislation.

The spokesman would not explain why the government would not consider changing the law.

Queensland University of Technology economist Dr Mark McGovern is calling on the government to make the changes as the Treasurer looks for more money for the upcoming state budget.

Dr McGovern said the state on behalf of people had ownership of resources.

But a property lawyer who has represented landholders with these title deeds said it would be very complex as it would require changing the Acquisition of Land Act and working out new methodology for compensation.

It could also be very costly.

The lawyer, who chose not to be named, said it was difficult to discover whether land fell under this category because it would mean working out whether any changes to the block would alter its status since the original deed was issued.

He said along with many politicians and community members, many property lawyers were unaware of the legislation.

Some landholders, although he was unaware of any in Queensland, could have been caught unaware and missed out on the opportunity to receive royalties.

FULL LIST: Search how your childcare centre is rated

Premium Content FULL LIST: Search how your childcare centre is rated

Hundreds of Queensland childcare centres still not up to standard

Shed 'totally destroyed' in blaze outside Warwick

Premium Content Shed 'totally destroyed' in blaze outside Warwick

Crews have now been battling the blaze for nearly three hours, with reports of...

Music legend Shannon Noll to star in region’s epic new festival

Premium Content Music legend Shannon Noll to star in region’s epic new...

Former Australian Idol icon to perform along Stanthorpe duo Nine Year Sister and...