The welcoming reception by the Queensland Resources Council was prompted following the release of the government’s Commission of Audit report.

QRC chief executive Michael Roche said it was pleasing to hear some assurances from the government on royalties.

While the report signalled the government would open its doors for discussions about proposed hike in royalties, the report did state that there was merit in New South Wales decision to increase royalties.

“Although the government’s Commission of Audit handed down today notes that there would be 'justification' to increase royalties in line with revised rates in New South Wales, I would encourage the government to stick with its pre-election stated preference to grow royalties by facilitating growth in the resources sector,” Roche said.

“QRC applauds the Queensland government’s efforts to date in making this happen, including commitments to halving project approval times, streamlining regulatory compliance and working with industry on issues such as skills shortages and provision of infrastructure.”

In NSW’s 2011-12 budget, the government announced it would increase royalties applied to the extraction of coal, with the royalty increase only applying to companies subject to the Mining Resource Rent Tax.

In light of this, the report signalled Queensland could raise an extra $A100-$150 million per annum if it increased its royalty rates to align with the revised rates in NSW.

However, Roche warned taking a leaf out of NSW’s books could present challenges.

“An approach similar to that in New South Wales where royalty increases were applied to companies that came under the remit of the Australian Government's Mining Resource Rent Tax has significant risks, notably the risk of clawback by the Commonwealth of other funding to Queensland,” he said.

Mining royalties paid to the NSW government totalled nearly $1.5 billion in 2010-11 and are forecast to rise to $1.9 billion in the next financial year.

In more QRC news, the industry body said it welcomed the new environmental approvals agreement between the Queensland and federal governments.

Roche said the new bilateral agreement with the federal government, inked yesterday, was a move in the right direction and would give the sector more certainty.

“The new bilateral agreement will eliminate duplication in the environmental approval process,” Roche said.

“I welcome in particular the agreement's 'proponent service delivery charter' where parties agree at the outset what is to be achieved, the way it's to be achieved, key milestones and clear lines of contact between both governments.”

According to Roche, the agreement signalled the state government would not forfeit on its pre-election promise to slash green tape.