A survey of coal companies in Queensland shows they all expect to cut costs and shed employees to cope with a rise in mining royalties by the state government.
The survey conducted by the Queensland Resources Council, shows cost-cutting measures would include reducing employee and contractor numbers, slashing rail and port costs and cuts to exploration expenditure.
AAP reports 10 of the 37 chief executives surveyed also said they risked premature closure of existing operations because of the rise.
QRC chief executive Michael Roche said the increased royalties came at a time when the industry is already under stress from the high Australian dollar, rising labour and materials costs and falling commodity prices.
When the 30% company income tax and the new royalty rates were factored in, he said a typical coking coal operation would have an effective tax rate of 50%.
"Promise(s) not to increase royalties again for 10 years cannot be delivered," he said.
On 1 October, royalties rose from 10% to 12.5% for every tonne of coal sold for between $A100 and $A150.
Coal sold for more than that price now attracts a 15% royalty, with the government setting up a third royalties tier aimed at upping revenue from lucrative coking coal.
AAP reports the increases are forecast to raise $A1.6 billion over four years. The new tax structure is to apply for 10 years.