Australia's coking coal industry faces increasing tax policy and regulatory challenges that could constrain future supply growth, even as rising steel demand from India underpins a favourable long-term outlook, lobby group Coal Australia chief executive Stuart Bocking said at the Singapore Coking Coal Conference 2026 held over 18-19 June.
Queensland, Australia's largest coking coal-producing region, imposes the world's highest coal royalty regime, with a top marginal rate of 40pc combined with corporate taxes on mining firms. Some producers now face effective tax rates of 54-67pc, Bocking said.
The policy has already influenced investment decisions, and a major producer may not commit extra investment to Queensland under the current royalty structure, he added.
Lengthy environmental approvals also threaten future supply growth. Several projects have been delayed by legal challenges and activist opposition, extending timelines and raising development costs. "If approvals become hard, the carrying value of an already approved and operating mine becomes extremely valuable," Bocking said.
Domestic political pressures further cloud the outlook. Australia's federal Labor government has continued to prioritise decarbonisation and renewable energy policies, although sentiment towards fossil fuels has shifted due to the US-Iran war and the resulting fuel supply crunch
Energy security concerns have prompted policymakers globally to reassess the pace of energy transition strategies.
Despite these headwinds, global coal consumption reached a record 8.85bn t last year, underscoring the continued role of fossil fuels in industrial supply chains.
India will remain the main growth driver for global coking coal demand, partly offsetting slower growth in China, Bocking said. India raised coking coal imports by almost 10pc in 2025. The country's steel production capacity is projected to reach 300mn t/yr by 2030 and 500mn t/yr by 2047.
Australia is well placed to meet this demand because of its high-quality reserves, established infrastructure and reputation as a reliable supplier.
Investment appetite for Australian assets remains strong, particularly for existing operations with approvals in place. Companies have continued to pursue acquisitions of premium assets, including recent transactions involving producers such as Whitehaven Coal, Yancoal and Anglo American.
Australia's coking coal sector therefore has a robust long-term outlook, underpinned by strong demand growth from India. But increasing tax burdens, regulatory uncertainty and activist opposition are emerging as key challenges that could hinder the country's ability to seize that opportunity.
