BHP has stopped any new investment in coal in Queensland because of the Palaszczuk Government’s hike in coal royalties which raked in billions of dollars and allowed the Government to subsidise energy bills as well as put an initial $500 million into the CopperString development and also pump money into other areas like health.

But the cost to BHP from the increased royalties was an extra $US700 million ($A1.09 billion) and in its profit result announced Tuesday the company maintained its stance on freezing any new capital spending. That would be $2 billion for the BMA joint venture which owns the coal mines and in which BHP is a partner with Japan’s Mitsubishi.

In total, the BMA joint venture paid more than $5 billion to the Queensland Government in taxes and royalties.

But BHP has led opposition to the royalty hike and the industry was also funding a campaign by the Queensland Resources Council against the State Government, despite the fact that it has no political support from the LNP on the issue.

Treasurer Cameron Dick said it was the clear expectation of the Government that BHP would continue to invest in its leases “without equivocation”.

“What I would say, if BHP or any other company fails to meet their mining development obligation without genuine commercial reason, our government has the ability to cancel those leases,” Dick said.

“We won’t hesitate to act if valuable tenures are being misused, and not being mined when it is clearly commercial to work those tenures.

“It’s clear there are plenty of other mining companies who would be willing to take up those leases and invest properly in their development.’

“BHP has legal obligations, and there are significant consequences for not meeting those obligations. Mining leases are not props for political campaigns.

“They are only granted after stringent examination. And they are granted in the expectation they will be developed on a commercial basis.

“Or putting it another way, in the words of senior LNP Queensland senator Matt Canavan, companies like BHP are obliged, quote, ‘to use it or lose it’.”

BHP managing director Mike Henry said the company was still spending $1 billion a year on its existing projects and the issue came down to the attractiveness of the Queensland assets agains those elsewhere.

He refused to buy into the threat from the Treasurer about resuming its leases and claimed BHP’s position was not controversial.

“In essence what we’re saying is that if returns go down, and risk goes up, of course that makes investments elsewhere in relative terms more attractive,” he said.

BHP was also to soon announce the sale of two of its central Queensland mines, Daunia and Blackwater, for which it was likely to earn billions of dollars. That would indicate there was still demand for Queensland’s coal despite the royalty hike.

The Government is also known to be comfortable that the rest of the coal industry had moved on from the issue, although grudgingly.

BHP’s profit for the year was $US12.9 billion, down 58 per cent on last year when commodity prices soared. A fully franked dividend of US80 cents a share was declared.

Queensland Resources Council chief executive Ian Macfarlane said other companies were reviewing their investment plans for Queensland.

“Once it starts to move away to other states and territories it will be very, very difficult to turn back,” he said.

“It’s time the State Government took this situation seriously because the future of every Queenslander,particularly in regional communities, will look very different without a strong resources sector underpinning the economy.”