PERTH (miningweekly.com) – The Western Australian mining industry breathed a sigh of relief as Mines and Petroleum Minister Bill Marmion announced that there would be no changes in royalty rates during the year.

Marmion on Wednesday released the results of the Mineral Royalty Rate Analysis (MRRA), which made a number of recommendations, including amending the Iron Ore Agreement Act and the Iron Ore Processing Act to remove discounted royalty rates for iron-ore used as feedstock, and removing royalty concessions in existing State Agreements.

The report also recommended increasing the royalty rate for gold from 2.5% to 3.75%, as well as removing the royalty exemption on the first 2 500 oz of gold produced from miners producing more than 2 500 oz/y.

Marmion said that while the review’s 18 recommendations were noted, the government had taken the decision not to change royalty rates in this year’s budget.

“I can also assure Western Australian industries and communities that, should there be any future discussion of mineral royalties, the Liberal National government remains totally committed to consultation over the issue,” Marmion said.

The Association of Mining and Exploration Companies welcomed the news, with CEO Simon Bennison insisting that the current system was working and that the government clearly understood that the status quo should be maintained in line with industry’s recommendations.

“This is a huge relief,” said Bennison.

“We congratulate the government and particularly the Minister for showing common sense and the foresight in keeping the status quo. The government has clearly listened to industry and community concerns that there would have been massive unintended consequences if rates had been increased.

“It is also excellent news for thousands of workers, contractors, suppliers and investors who would have been badly affected.”

Bennison said that the decision would also provide some certainty and put confidence back into the market, allowing companies to grow and generate additional royalty revenue.

The Gold Royalties Response Group (GRRG), which gold miners formed to combat the proposed hike in gold royalties, on Wednesday expressed its delight that the issue of royalty changes had been taken off the table.

“On behalf of the 20 000 men and women who work in the gold industry we say thank you,” GRRG spokesperson and Doray Minerals MD Allan Kelly said.

“Today’s decision demonstrates the government understands that the gold industry plays a critical role in keeping our economy and our community strong.

“It is also clear the government knows that our industry is doing it tough in a highly competitive global market.”

Kelly expressed the hope that the government would remove any reference to increased royalty revenues from the forward estimates, and added that the GRRG would consider the MRRA and continue to make the case that any increase in the gold royalty would have a negative impact on the industry and result in significant job losses.

“We pay our fair share of taxes and royalties and our industry already contributes more than A$8-billion to the state’s economy each and every year,” Kelly said.