Dismay over gold royalty

Gold miners in Western Australia are dismayed at the government reintroducing a higher production royalty with modified terms, a move that will affect companies such as Gold Fields and AngloGold Ashanti.

“There has been no consultation with the gold industry and we are disappointed by the media release by the government on resurrecting the gold royalty,” said Stuart Mathews, Gold Fields’ vice-president of the Australia region.

“We remain opposed to a royalty increase that will impact jobs, investment in the WA [Western Australia] gold industry, exploration and growth, and the sustainability of gold in WA. A royalty increase will reduce mine life, drive less production, cost jobs, and ultimately much less revenue for WA. A strong gold sector where investment is encouraged will greatly assist growth for the state,” he said.

The Western Australian government, which is looking to bolster its overstretched coffers by A$332m over four years, has proposed the introduction of the same royalty rate that was shot down by opposition parties.

The rate will increase to 3.75% from 2.5% from 2018 and will kick in once the gold price goes above A$1,400/oz compared with A$1,200 under the previous proposal. There are concessions for small and marginal miners, but even so the higher charge was opposed by opposition parties and the industry. The prevailing price is around A$1,700/oz.