The WA government says it won’t be increasing mineral royalty rates in this year’s state budget.
Mines and Petroleum Minister Bill Marmion made the announcement after the state conducted a review of its royalty system.
The review made 18 recommendations, including a new royalty rate for gold of 3.75 per cent, up from 2.5 per cent.
However Marmion said the changes won’t be implemented in WA’s budget this year.
“The state government notes the review’s endorsement of the ad valorem system and the 10 per cent benchmark of mine-head value as an appropriate gauge for royalty returns to the community,” Marmion said.
“The review’s 18 recommendations are also noted.”
The Chamber of Minerals and Energy of Western Australia (CME) welcomed the commitment by the government to not increase royalties.
CME Deputy Chief Executive Nicole Roocke said the move would provide some short-term certainty for mining companies.
“With the Government ruling out immediate royalty increases, CME will continue to advocate for no royalty increases in the Budget’s forward estimates,” Roocke.said.
“The responsible and most effective way to increase royalty revenue is to have policies which grow the size of the resources sector. Initiatives which keep the sector strong and prosperous will be welcomed by those Western Australians directly employed in the industry.”
The Association of Mining and Exploration Companies (AMEC) also welcomed the government’s decision.
"I think commonsense has prevailed, particularly for the gold sector, the impact was being horribly underestimated by a number of leading figures," spokesman Simon Bennison said.
"To see this announcement will be an enormous relief for companies, for those employees and obviously for the shareholders as well."