PERTH (miningweekly.com) – Western Australian gold miners on Monday rallied in Kalgoorlie to protest the state government’s plans to impose a new royalty on the gold sector.
Treasurer Ben Wyatt earlier this month announced that a tiered royalty rate would be introduced from January 1, to assist the government in repairing the state’s finances.
The current 2.5% rate will apply for each month when the gold spot price is A$1 200/oz or less, and an increased rate of 3.75% will apply when the gold spot price is above A$1 200/oz.
Based on the current gold price, the increased rate equates to an additional royalty of about A$20/oz.
Western Australian Chamber of Minerals and Energy (CME) CEO Reg Howard-Smith said on Monday that the rally marked the launch of an industry-wide campaign to stop the state government’s plan to increase the gold royalty rate.
“Our clear message to the Premier and his Cabinet is Western Australian jobs must come first and an increase in the gold royalty rate and taxes will cost jobs,” Howard-Smith said.
“More than 25 000 men and women work in our gold mines and many more work in industries associated with the gold sector – from drillers to geologists to truck drivers.
“These are people who make a difference for Western Australia – they pull their weight, they support their families, they pay their taxes and they deserve a fair go.”
Howard-Smith said Western Australian gold miners were aware of the economic challenges confronting the government, but stressed that the instrument being used to increase the royalty rate would destroy jobs.
“The bottom line is increased royalties and taxes will cost jobs. It will result in the closure of mines, it will see a dramatic reduction in exploration and it will reduce the number of new jobs our industry can create.
“Western Australian jobs must come first. The gold industry will stand united in this fight to secure and create jobs for Western Australians and calls on all parties to support the gold sector in its campaign.
“The gold industry can’t continue to create new jobs and drive our local economy if it is hit with this increased royalty rate.”
Association of Mining and Exploration Companies acting CEO Graham Short added that it was “economically senseless” to increase the gold royalty rate.
“The additional revenue to be collected from the increase represents around 0.2% of the total Budget for 2017/18.”
“This decision could result in reduced exploration, job losses and increased sovereign risk in Western Australia. Some reports indicate that over 3 000 jobs could be lost,” Short said.
“Then to top that, the government appears to be happy to allow 60% of the revenue raised to go to other Australian states and territories through the goods and services tax re-distribution process.”