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No royalty relief as Rio opens expanded Qld coal mine

Queensland Treasurer Tim Nicholls says he will not be axing state-based mining royalty hikes, even if the Federal Government scraps the mining tax.

He was speaking today at the opening of Rio Tinto's $2.1 billion mine expansion in central Queensland.

The Kestrel South expansion, north-east of Emerald, will provide jobs for 400 employees for the 20-year life of the mine.

However the expanded operation opens amid tough operating conditions in the mining industry.

The New South Wales Government has announced it will reduce its mining royalties if and when the Federal Government repeals the mining tax.

But today Mr Nicholls refused to give ground on royalties.

"The coal in the ground in Queensland is an asset of the people of Queensland, it's a non-renewable resource," he said.

"It's entirely appropriate for the people of Queensland to seek a fair price for it."

It took five years and six million hours of construction time to extend life of the hard coking coal mine.

The main shearer can cut through 5,000 tonnes of coal an hour, with the company aiming to produce almost six million tonnes of coal a year.

Rio Tinto's energy division chief executive Harry Kenyon-Slaney acknowledges the expansion comes at a tough period for the industry.

"In recent times the focus on Australian coal industry has been more on survival than development of new mines," he said.

The company plans to export coal from the mine through the Port of Gladstone, 300 kilometres away.

'Bright future' for coal

Mr Nicholls says the opening of Kestrel South was further evidence Queensland's coal industry has a vibrant future.

"Kestrel South will contribute to our expected 7.6 per cent growth in coal exports this year," he said.

"Queensland ports are putting through tonnages at pre-GFC levels with a total of just over 34 million tonnes exported from Queensland in July and August."

Mr Nicholls says the State Government is supporting the coal industry through a raft of measures aimed at reducing red and green tape.

"We've implemented reforms to streamline resource permit approvals, we've cut the time taken to assess environmental impact statements and we're delivering a more integrated approvals process," he said.

"The Government is also supporting future exploration and investment in the mining industry.

"This year's budget included $30 million for the geological survey of Queensland."

Mr Nicholls says the Government will continue to work to support the resources sector with streamlined process and pro-growth policies to ensure mining companies continued to invest, employ and grow in Queensland.

Source: Yahoo