The credibility of the coal royalties estimates in next week’s state Budget will rest on the Queensland Government’s resolve to do more to allow the removal of flood waters from Queensland coal mines, according to the state’s main minerals and energy industry group. Queensland Resources Council (QRC) Chief Executive Michael Roche said he was concerned that too many people in the Queensland Government continued to underestimate the true extent of the last wet season’s impact on the coal sector and remain unwilling to take more decisive action.“The chickens continue to come home to roost from the Queensland Government’s stubborn refusal in late January, and since, to declare the coal industry’s water inundation predicament an industry-wide emergency,’ Roche said. “Coal export numbers for May are now in and they do not make for happy reading. Coal exports in May 2011, at 12.2 Mt, were some 23% below the May 2010 level and the lowest month of May export tally for at least five years.”

Roche said that before the wet season crisis, the Queensland coal industry was set to export a record 200 Mt or more in 2010-11, but now looks likely to fall around 40 Mt short of that figure. “That’s coal exports of $7 billion lost to Queensland,” said Roche. “I can only hope that Treasurer Fraser has received assurances from his colleague Environment and Resource Management Minister Kate Jones that she has a plan to help remove the water-equivalent to the volume of Sydney Harbour-which continues to hamper operations.”

Roche said he has welcomed Minister Jones’ support for a review of the conditions governing water discharge from coal mines and also the spirit in which her department has approached the review to date. “‘That review must very quickly translate into real changes that will allow Queensland coal mines to get ready for the next wet season, now only a few months away, and wet seasons beyond. As we hopefully start to see more normal production and export levels towards the end of 2011, it needs to be clearly understood by the government that this can’t be achieved by the current situation where many mines are spending huge sums of money to move water around on their mine sites, because they are currently unable to release the water offsite.

“Moving water around on mine sites is a temporary solution. Sustainable royalty numbers over the forward estimates require a long term fix, which in itself will take some months to have effect.”