Western Australia’s gold miners are uniting; establishing the Gold Royalties Response Group (GRRG) to stand up to the state government over potential gold royalty hikes.
WA Premier Colin Barnett’s government is currently reviewing the state’s royalty rates, previously flagging an increase of the gold royalty could be considered.
First formed in 2010, the GRRG was reformed last week to include Doray Minerals, Gold Fields, Newmont, Northern Star Resources, Silver Lake Resources and St Barabara.
The lobby group said it believes the government plans to double the gold royalty rate, warning increasing the royalty will hurt WA’s gold sector, The West Australian reports.
Doray Minerals managing director and spokesperson for the GRRG Allan Kelly said a royalty hike will inflict further pressure on the already struggling industry.
“With low margins already hurting the industry, and a series of closures and redundancies in the past few months, a royalty increase would further impact local communities, including Kalgoorlie, Southern Cross, Meekatharra, Westonia and Mount Magnet through additional job losses and cuts to valuable services,” he said.
“It will also seriously undermine future investment in the industry against a backdrop of major companies exiting gold projects in Western Australia.”
According to the WA government the review aims to identify anomalies in the existing policy.
The review expects to yield an additional $180 million a year but stresses no final decision has been made on which sector will incur an increase.
At the current rate of about 2.5 per cent, gold royalties are expected to earn the state government $173 million in 2015-16.
The GRRG is currently preparing a submission for the review, due to be handed in at the end of the month.