S&P/ASX 200 Index (ASX: XJO) coal stocks are in the red today.
New Hope Corp Ltd (ASX: NHC) shares closed yesterday trading for $5.01. During the Friday lunch shares are swapping hands for $4.94 apiece, down 1.5%.
It's a similar picture with Whitehaven Coal Ltd (ASX: WHC). The Whitehaven share price closed yesterday at $7.80 and is down 1.9% at the time of writing to $7.66 a share.
The ASX 200 is also under pressure today, down 1.0% on the back of strong US economic data that could push Federal Reserve interest rate cuts out to 2025.
But ASX coal shares are facing an additional headwind.
ASX 200 coal stocks eyeing perpetual tax hike
Queensland's super tax on coal profits came into effect in July 2022. The tax regime mandates that ASX 200 coal stocks (and smaller coal miners, for that matter) pay an additional tax on all the coal they sell for more than AU$175 a tonne.
With coal prices soaring over that period, this has already delivered billions of dollars to the state's coffers.
But it's drawn the ire of international companies, investors, Aussie coal miners, and even nations like Japan that likened the tax to an unexpected sovereign risk.
Despite a big retrace in coal prices from the 2022 all-time highs of more than US$437 (AU$662) per tonne, Whitehaven achieved an average coal price of AU$219 for the March quarter.
And ASX 200 coal stock New Hope achieved an average realised sales price of AU$180 per tonne, in line with the prior quarter.
Now, the Queensland Labor government is getting set to enshrine the super coal tax into law ahead of the state elections.
Yesterday, Deputy Premier Cameron Dick introduced a bill that will require legislative amendments to change or axe the coal tax.
According to Dick (quoted by The Canberra Times):
There would be no quiet Friday afternoon regulatory changes under any future Queensland government. Any reduction to the coal royalties will be subject to the scrutiny of the people of Queensland through their parliament, as it should be.
As you'd expect, this comes as unwelcome news to ASX 200 coal stocks and industry groups who warn it could impact future investment.
Queensland Resources Council CEO Janette Hewson warned:
The legislation announced by the Government sends a very negative message to the international investment community. Once again, we have seen the Queensland Government make a significant change affecting the resources sector without any notification to, or consultation with, the industry.
But Dick insists that investor confidence in Queensland coal is at historic highs, citing BHP Group Ltd (ASX: BHP)'s takeover ambitions of Anglo American (LSE: AAL), which atop its copper assets owns a number of coal mines in Queensland.
According to Dick:
That confidence has seen BHP reverse a two-decade policy to now seek new growth in Queensland through the prized mines of Anglo American that they want to purchase.
We're seeing significant investment and that's resulting in record jobs… the highest number of jobs ever in the Queensland coal industry, about 44,000 as of December last year.
Royalties from ASX 200 coal stocks and other coal miners in Queensland are forecast to deliver a whopping $9.4 billion to the state over five years.
