Gold royalty rate
Open letter to Premier Colin Barnett
For nearly three years now the Western Australian Government has been conducting a review into mining royalties.
For three years now mining companies, particularly gold mining companies, have been waiting to hear what the recommendations are - anxious to see if you will raise the gold royalty rate.
The Chamber of Minerals and Energy of Western Australia Manager of Economics and Tax Shannon Burdeu has said the report's details need to be released soon to ensure security for the sector.
I completely agree with her.
We know the industry is already operating in tough conditions – just last year the gold industry lost 4000 jobs.
For an industry that employs approximately 20,000 people, that’s a loss of 20%.
Gold mining is a critical industry for the Goldfields, and Western Australia. It’s an industry that has sustained the state since the late 1800s.
Gold miners already pays more than $300 million in taxes and royalties to your government which helps build our roads, schools, hospitals and police stations.
Any increase to gold royalties, though, could put jobs and, ultimately, communities at risk.
Any rate royalty increase will have a significant impact in the region.
And it’s not just me who is concerned
Spokesman for the Gold Royalties Response Group Allan Kelly said the current rate was fair and the effect would be devastating if it was increased.
"Immediately there'd be some mines that are marginal at the current gold price and if you increase the royalty rate you'll see those mines shut down but I guess longer term you'll also see a reduction in investment in keeping existing mines going and new mines opening.”
Mr Kelly has claimed the industry cannot bear any additional costs.
“WA gold miners continue to face tough operating conditions. Any increases in royalties will see mines close and jobs lost. More than 4000 direct jobs in gold were lost last year as a result of miners being forced to downsize and the reality is that any additional costs will result in more job losses and seriously damage our industry.”
At last year’s WA Liberal Party State conference a motion to oppose any changes to the gold royalties was introduced and passed.
That motion came from the Kalgoorlie branch of the Liberal party.
They know the value that gold mining has to their town.
If there are no surplus profits being made in the mining industry to sustain an increase in the royalty rate, it could end up being, from a revenue point of view, negative for the government.
This is because it could scare off investors and potential start-ups and even see some existing operations close down.
We can’t keep hammering our productive industries Premier.
Rick Wilson MP
Federal Member for O’Connor