Queensland's coal miners are crying poor, saying any royalties hike in next month's state budget will kick them while they're down.
Treasurer Tim Nicholls last week suggested a hike was on the cards to help boost revenue by $1 billion over three years and return the budget to surplus by 2014/15.
But the Queensland Resources Council says the state's coal producers can ill afford a royalties increase.
"Of course ... industry's preference is to be delivering that revenue through growth in volumes, not by an increase in royalty rates," chief executive Michael Roche said in a speech at a coal industry event in Brisbane on Monday.
"The bottom line in 2012 is that many Queensland coal producers are now generating cash losses."
Mr Roche said Queensland miners paid the third highest tax rate of comparable coal jurisdictions and were already globally uncompetitive.
He cited the carbon tax, the mining tax, the soaring cost of materials and unsustainably high wages driven by a skills shortage.
The Queensland industry was also still feeling the effects of natural disasters, Mr Roche said.
The main coal-producing regions lost about $7 billion in sales as a result of floods and Cyclone Yasi, which struck in January 2011.
It gave US producers a chance to steal six per cent of Queensland's global market share.
Mr Roche said Queensland coal mines were still holding enormous amounts of water, 19 months on from the floods, and that was also affecting production.
Producers want permission to dump diluted pit water this wet season, and over seasons to come, so production can return to full capacity.
Mr Roche called on the state government to help the industry boost production rather than deliver another hit in the form of a royalties hike.