KALGOORLIE (miningweekly.com) – The Gold Royalty Response Group (GRRG) has used the Diggers & Dealers conference as a platform to launch a public awareness campaign against an increase in gold royalties currently being considered by the Western Australian state government.

The state 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 Western Australian 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.

The GRRG has continually expressed concern that the majority of this additional revenue would be sourced from the gold industry.

GRRG spokesperson and gold miner Silver Lake Resources MD Les Davis said on Tuesday that the new social campaign would feature radio advertising and online and social media, highlighting the vital contribution made by more than 25 000 Western Australians employed in the gold sector.

The campaign would explain how gold producers kept Western Australia’s economy strong by paying more than A$2.8-billion in wages and more than A$300-million in taxes and royalties to the state government each year to help build schools, hospitals, roads and police stations.

“Our mines are at the heart of many regional communities across the state and our employees live and work in the regions,” Davis said.

“They are riggers and drillers, drivers and blasters, engineers and electricians, payroll officers and safety advisers. But they are also mums and dads, brothers and sisters, and they are quite literally the lifeblood of many regional centres.”

“As gold producers and developers we support our employees’ efforts by investing directly in our local communities to ensure they remain strong and viable. This campaign is about sharing that message with all Western Australians.”

Davis warned that additional taxes on the gold sector would strain the already tight margins of the industry, and could result in the closure of some operations that were already constrained under current conditions.

“There is no doubt that many of our gold producers are doing it tough and this is clearly evident in the recent mine closures and downsizing,” he said.

Furthermore, an independent analysis by advisory firm Deloitte Access Economics indicated than an increase in the gold royalty rate to 5% would reduce Western Australia’s gross state production by an initial A$110-million in 2015/16 and A$240-million in 2016/17.

“Our state’s history is synonymous with gold and we want to ensure the industry is here for many years to come,” Davis said.

“To remain competitive in a global market, we need stable and competitive tax and royalty arrangements and a healthy flow of capital. Investment capital is mobile and Western Australia will put future investments at risk if royalty rates are increased.”

Current members of the GRRG include 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.