Stanmore, Terracom and Coronado shares slammed as Queensland increases coal royalties

ASX coal stocks are plummeting after the Queensland government announced a massive royalty hike for local coal miners. 

Treasurer Cameron Dick said Queensland expects a surplus of $1.91bn for 2021-22, reflecting stronger-than-expected housing and labor markets, and increased royalties from coal and oil companies.

The government is introducing an additional three tier royalty rate tiers for coal sold, disposed of or used on or after 1 July 2022.

• 20% for prices above $175/t

• 30% for prices above $225/t

• 40% for prices above $300/t

The royalty was previously 15% for prices over $150/t.

“The additional tiers of coal royalty rates will ensure during future periods of high coal prices that the royalty return to the people of Queensland is appropriate for the use of the state's valuable and limited natural resources,” the budget notes. 

Which ASX coal companies are at risk?

Coal companies with Queensland based projects include:

• Terracom (ASX: TER)

  • Operates the Blair Athol Coal Mine in Central Queensland

  • Blair Athol is forecast to produce 2.2m tonnes per annum

  • Recent offtake for 1.25m tonnes (August 2022-23) at Newcastle Index prices

• Stanmore (ASX: SMR)

  • All four major coal-producing assets are located in Queensland

• Coronado Global Resources (ASX: CRN)

  • Operates the Curragh Mine in Central Queensland

Massive intraday swing

Before the news broke out, all three affected coal names were all up around 8% on Tuesday.

Now, as at 3:00 pm AEST:

• Terracom -5.9%

• Stanmore -20.5%

• Coronado -9.7%

Coronado, Stanmore and Terracom intraday price charts (Source: TradingView)