Gold group pleads royalty case in WA Parliament
PERTH (mininingweekly.com) – The Gold Resource Response Group (GRRG) has taken its fight against an increase in gold royalties to the Western Australian state Parliament, briefing MPs on Wednesday on the findings of an independent analysis into the gold sector.
Advisory firm Deloitte Access Economics partner Matt Judkins took the findings to Parliament, explaining that an increase in the gold royalty could result in the state’s gross domestic product declining by A$110-million initially and by A$240-million by 2016/17, and would lead to a A$100-million reduction in the state’s exports and worsen to a A$200-million reduction in 2016/17.
Judkins also explained the complex system currently used to levy royalties on minerals and how changes to the system and royalty rates would impact struggling industries such as gold mining.
“Royalty rates are calculated using a complex methodology based on achieving a return to the state approximately equal to 10% of the value of the commodity at the ‘mine-head’ stage of production,” GRRG spokesperson and MD of Millennium Minerals Brian Rear explained.
“We organised this briefing to get an expert in the field to talk MPs through this complex methodology so they are able to fully understand changes they may be asked to vote on.”
The state government was currently undertaking a royalty review, which was expected to be completed by the end of 2014.
Rear said on Wednesday that the industry was anxiously awaiting the results of this review, but added that the gold industry could not afford to pay more in royalties.
“As it is, 4 000 jobs were lost from the industry last year and our members are concerned any increase in the royalty on gold will mean further mine closures and job losses. Many operators will not survive a royalty rate increase. That is why this briefing is so important.”
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