Anglo Pacific Group PLC (LSE:APF, TSX:APY, OTC:AGPIF) said three new progressive royalty tiers have been announced by the Queensland Government, potentially giving a major boost to its income.
The new higher royalty tiers are expected to apply to the royalty Anglo Pacific receives from the Kestrel coking coal mine and take effect from 1 July 2022, it said.
A previous amendment to the Queensland coal royalty regime in 2012 saw a significant increase to the weighted average royalty rate being applied to its Kestrel royalty interest, said the company.
“This amendment is expected to have the same impact from the effective date.”
Kestrel accounted for more than half of Anglo Pacific’s 2021 royalty income of US$85mln.
Marc Bishop Lafleche, chief executive, added: "The proposed increase to the Queensland royalty regime has the potential, based on current consensus metallurgical coal price forecasts for H2 22 of approx. US$380/t (A$545/t), to increase our revenue from the Kestrel royalty during the same period by approximately 75%.
“This should significantly accelerate our ability to recycle capital towards funding accretive acquisitions that further enhance our exposure to future facing commodities."
Under the new rates, the royalty on coal above a price A$300 per tonne jumps to 40% from 15% currently.
Between A$225-300, the rate rates to 30% from 15% and for a coal price of A$175-225 it rises to 20% from 15%.
At coal prices below A$175 per tonne the royalty rates will remain unchanged.