Roche said this estimate was "conservative", not taking into account the potential for increased production.

“With contract coal prices over the next 12 months reaching record levels there is clearly a major incentive for coal producers to lift production, and based on QRC member projections, a royalty revenue outcome closer to $3 billion cannot be ruled out," Roche said.

In a budget submission to Queensland Premier Anna Bligh and Treasurer Andrew Fraser, Roche said the mining sector needs to know it has a "guarantee of stability in royalty rates, and that other taxes and charges won't bring the economic viability of planned projects into question".

Roche said the key factor in achieving the high royalty revenue estimate for 2008-09 is the completion on schedule of rail and port projects, including additional train sets from Queensland Rail and the final stage expansion to 85 million tonnes at Dalrymple Bay Coal Terminal.

Mineral royalties paid to the Queensland Government in 2003-04 totalled $611 million.