Victorian miners to be hit by gold royalty

Image: Kirkland Lake Gold

The Victorian Government plans to introduce a 2.75 per cent royalty to its gold miners, in line with all other Australian states.

Only small miners are exempt from the updated royalty.

In Victoria, a 2.75 per cent royalty rate already applies to all minerals other than lignite and gold.

Kirkland Lake Gold’s Fosterville mine is the state’s top producer of gold. In the March quarter, Fosterville produced 128,445 ounces of the precious metal. The Canadian company expects to produce more than 600,000 ounces of gold at the site this year.

The Minerals Council of Australia questioned the government’s lack of engagement with the industry’s miners prior to announcing the plan.

“The Andrews Government has not consulted or listened to regional communities that rely on highly paid, high skilled jobs that mining delivers in Victoria,” Minerals Council of Australia (MCA) Victoria director James Sorahan said.

“The Victorian Government’s gold tax threatens hundreds of jobs in regional Victoria and would undermine confidence just when new opportunities are emerging to support regional communities with increased mining investment.”

“A new 2.75 per cent gold tax would add to uncertain project approval and regulatory regimes and regulatory duplication and inconsistencies.”

Sorahan said the claim that Victoria should impose a gold royalty because other states do ignored the unique characteristics of gold mining in Victoria. A state’s royalty regime includes different royalty rates, depreciation arrangements, exemptions and other features.

Victoria is already behind every other Australian state, apart from Tasmania, on mining competitiveness, with the Fraser Institute’s annual survey of mining companies ranking Victoria 43rd out of 83 jurisdictions globally in its investment attractiveness index.

Mining employs nearly 12,000 Victorians and supports 88,000 more jobs through a large supply chain of small and medium sized businesses in the mining equipment, technology and services (METS) sector.

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