PERTH (miningweekly.com) – Gold miner Northern Star Resources has called on the Western Australian government to invest more on exploration incentives, rather than lobbying an additional tax on the gold industry.

Speaking at a Western Australia Mining Club event, in Perth, Northern Star MD Bill Beament said the state government’s policy changes should reflect the changing reality, in which exploration in the state was not only declining, but in which Western Australia might see a dearth in gold projects over the next ten years.

“The simple truth is that the remaining deposits are deeper and harder to find. That means exploration is becoming an even higher-risk investment,” Beament said.

He echoed concerns previously expressed by the Association of Mining and Exploration Companies around the fact that Australia’s investment in exploration expenditure was at historical lows.

“We have an exploration crisis in my opinion, and if we don’t find more minerals at a far greater rate than is currently the case, the mining industry is going to die,” Beament said.

“This is a crisis that demands urgent and widespread attention and is currently getting neither. Instead, there are more debates about how governments can suck more money out of the industry.”

Beament said that a more effective way for the government to gain additional funds from the resource sector would be to increase royalty receipts by an increase in production, rather than increasing the royalty rates.

“To increase production, we need to find more gold. To find more gold, we need to increase exploration. The argument needs to focus on how we can increase the size of the pie, rather than how it is sliced. It needs to centre on how government policy can drive the next generation of exploration as the ultimate means of increasing royalty.”

The Western Australian government was currently undertaking a royalty review, which was expected to be completed by the end of 2014.

In its 2015/16 state budget, the state government announced that royalty income would account for over 25% of the government’s revenue in 2017/18, up from only 5% in 2003/4. By 2015/16, an additional A$560-million would be added to the royalty revenue.

Industry players, including Doray Minerals, Evolution Mining, Gold Fields, Newmont Asia Pacific, Northern Star Resources, Norton Gold Fields, Ramelius Resources, Regis Resources, Silver Lake Resources and St Barbara, have formed the Gold Royalty Response Group in an effort to raise awareness of what an increased royalty rate could mean to the industry.