Ballarat industry leaders are calling for the state government to "ditch" its proposed gold mining royalty, saying jobs are at risk.
This includes Castlemaine Goldfields' Ballarat mine - currently running as a "marginal" operation running deep beneath Sovereign Hill and Bakery Hill, there are currently about 220 employees and contractors, and many more indirect jobs.
The royalty, announced in the state budget in May, would bring Victoria into line with other states.
Gold producers would have to pay a 2.75 per cent tax - which would be enough to knock smaller mines out of business, according to Ballarat's general manager, Stephen Jeffers.
"We can't run it any slower otherwise we would fold - I call it treading water," he said.
"It doesn't take much of a wave to swamp us, we're not that robust in terms of standing shocks or if something goes wrong with the ore body - then we're in strife.
"We've mined about $70 million worth of gold every year, and it costs us about $70 million every year - the water's just under our nose - but the impact of this royalty, the way it's stated, is about $2 million, so then our costs become $72 million a year."
That's something the Committee for Ballarat is worried about, chairman Nick Beale said.
"We do feel, in this case, the relevant ministers, the mine, and Committee for Ballarat should be involved in discussions to try and come to a more amicable arrangement without the prospect of job losses," he said.
"We stand ready to talk with the minister for mining and the treasurer, together with industry, on this matter - the committee is also very concerned that any loss of mining operations would lead to a knock-on effect amongst Ballarat employers, such as Gekko, Eureka Concrete, and others."
Gekko's chairman and managing director Elizabeth Lewis-Gray does not mince words - her Ballarat-based company, which designs and manufactures equipment to process the gold once it's out of the ground, has grown quickly in the last six months, but relies on the Ballarat mine to demonstrate its technologies for export.
She labelled the tax an "attack from the city on the regions".
"It's a big issue for us because we're based in Ballarat, we've got 17 employees at (the mine)," she said.
"It would make it much harder for us to actually use Victoria as a base if we didn't have access to the relatively small gold mining population we have already.
"We've got potentially 250 total (jobs) in Ballarat, this is an attack from the city on jobs in the regions, and high-paying regional jobs, you can't recreate them in a hurry."
The problem is the lack of consultation with industry, according to the Minerals Council of Australia's Victorian executive director James Sorahan.
"This is a really nasty hit to the industry which makes it very uncompetitive compared to other states - we would say the tax needs to be designed for a state which tends to have smaller mines than other states," he said.
"They should basically start all over again, ditch this tax and start again in consultation with industry."
As previously reported in The Age, the royalty is expected to raise about $56 million over four years, and Victorian Treasurer Tim Pallas said it was "essential".
"These are prudent reforms, with the revenue funding essential services that Victorians need - schools, hospitals and public transport," he said.
Castlemaine Goldfields is a wholly-owned subsidiary of LionGold, a Singapore-listed company, which took over the Ballarat mine soon after it reopened in 2011.
Stay tuned for a larger feature on the mine this weekend.
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