The Queensland government’s decision to auction licenses for coal, oil and gas exploration has triggered widespread complaint within the mining sector of the Australian tropical state.
ABC News reports that Andrew Cripps, the Queensland State Minister for Natural Resources and Mines, announced plans for the use of cash bidding to allocate licenses at a coal seam gas conference in Brisbane. The winners of tenders will obtain exclusive rights to explore for fossil fuel resources beneath the land attached to the licenses.
Under the current system licenses are conferred primarily on the basis of the way mining operations will be implemented. The new system requires explorers to pay a cash bid as well, in move which Cripps says will enable the state to “realise the full benefit of the value of the resources that are in the ground.”
The decision has already engendered adverse response from representatives of the mining industry, with David Byers of the Australian Petroleum Production and Exploration Association saying the sector already contribute its fair share through taxes and other royalties arising from successful development.
Michael Roche of the Queensland Resources Council points out that the bidding process will be to the detriment of junior companies unable to compete against mining giants with far greater fiscal resources.
“A government that accepts a large upfront payments at the exploration stage may not be seen as being a fair arbiter,” said Roche.
