A survey of Queensland's coal companies shows they all expect to cut costs, including shedding staff, to cope with a hike in mining royalties.
The survey of 37 CEOs, conducted by the Queensland Resources Council (QRC), shows cost-cutting measures would include reducing employee and contractor numbers, slashing rail and port costs and cuts to exploration expenditure.
Three of those surveyed also said they risked premature closure of existing operations because of the hike.
QRC chief executive Michael Roche said the increased royalties came at a time when the industry was already under stress from the high Australian dollar, rising labour and materials costs and falling commodity prices.
He said when the 30 per cent company income tax and the new royalty rates were factored in, a typical coking coal operation would have an effective tax rate of 50 per cent.
"This gives us the dubious honour of being the highest taxing coal jurisdiction globally," Mr Roche said in a statement.
He said he was also concerned that the government had not indexed coal royalty thresholds and inflation would cause bracket creep within the royalty regime.
If the government did not introduce indexation, it would effectively be increasing royalties every year, he said.
"The government's promise not to increase royalties again for 10 years cannot be delivered," he said.
Mr Roche said metalliferous and gas sector miners have also expressed concerns that they would be targeted next for a royalty increase as the government tries to boost its revenue base.
From October 1, royalties jumped from 10 to 12.5 per cent for every tonne of coal sold for between $100 and $150.
Coal sold for more than that price now attracts a 15 per cent royalty, with the government setting up a third royalties tier aimed at upping revenue from lucrative coking coal.
The royalty increases are forecast to raise $1.6 billion over four years, with the new tax structure to apply for 10 years.
Treasurer Tim Nicholls said the government was determined to ensure Queenslanders received a fair return from the coal and other resources they owned.
He downplayed the effect of the royalty hike and said increases in industrial action and production costs, the softening of commodity prices and the high Australian dollar were responsible for a downturn.
"Closures announced to date have occurred due to lower prices, increased production costs and efficiency issues," he said in a statement.
"We hope to continue to work with industry constructively. However, if that is not the QRC's attitude we will be very disappointed."