Exploration doldrums affects Kalgoorlie council budget

The rapid decrease in the number of mining tenements around Kalgoorlie has left the local council with a massive budget shortfall.

With 622 “dead” tenements in the Goldfields region recorded by the Department of Mines and Petroleum in the past year, Kalgoorlie-Boulder council has experienced budgetary strain with the reduction in rates paid by exploration companies.

Local councils are expected to repay the balance of rates paid when miners surrender their tenements.

With 2737 active tenements in the region, the number surrendered represents an 18 per cent drop in the number of active tenements, a significant loss in adverse conditions for the exploration industry.

Kalgoorlie mayor Ron Yuryevich told ABC that $800,000 worth of infrastructure projects had been stalled as a result of the refunds.

"That does have a dramatic effect on our bottom line when you have a severe amount, and that's never happened before," he said.

"We have to have certainty going forward in our budget process, so if we've got an expectation of $23 million coming in rates, we shouldn't be subject to five, six, seven hundred thousand dollars in mining leases being handed back."

West Australia is the only state which allows councils to charge rates on exploration tenements, and the Kalgoorlie-Boulder council has approached the WA Local Government Association to assist with lobbying the government to make legislative changes about the requirements to refund paid tenement rates.

Association of Mining and Exploration Companies (AMEC) CEO Simon Bennison was unsympathetic, suggesting that councils should not rely on companies to pay rates for land with no services provided, and that there was no justification for applying rates.

Yuryevich argued that mining companies used services in the towns, and should have to pay their contribution to the rate base “like anyone else”.

"If they're going to be a part of the community, they have a responsibility like everyone else who is earning a living out of the community to pay their fair share," he said.

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