Mining managers say they are looking forward to a government response after putting several suggestions on the table following the announcement of a gold royalty in Victoria.
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The so-called gold tax, which the treasurer Tim Pallas introduced in the most recent state budget, blindsided many in the industry.
He said a 2.75 per cent royalty would be imposed on Victorian mining businesses from next year. Victoria is currently the only state in Australia that does not levy a royalty on extracted gold, which is the only mineral that does not attract a levy in Victoria.
However, shortly after the budget came out Stephen Jeffers, the manager of Castlemaine Goldfields which operates Ballarat gold mine, told The Courier that the royalty could put the mine out of business.
He said about $70 million worth of gold was mined every year, with costs of about $70 million every year.
James Sorahan, Minerals Council of Australia's Victorian executive director, said it had put forward three proposals to the state government to soften the impact of the royalty.
We don't oppose the implementation of a royalty, but it needs to be done carefully, it needs to be fit for purpose for Victoria
- James Sorahan, Minerals Council of Australia
He told The Courier they had suggested that exploration costs be offset. He said it would allow "the ongoing expenditure that a gold mine has to spend year in year out", which he described as a "necessary expense".
"If the royalty came in in its current form as announced, it will eat into exploration spending," he said.
Other proposals include a gradual phase-in of the royalty over two or three years and a progressive tax that increases the larger the mine.
"We don't oppose the implementation of a royalty, but it needs to be done carefully, it needs to be fit for purpose for Victoria," he said.
Elizabeth Lewis-Gray, the managing director of Gekko, a Ballarat-based mining equipment company that works closely with the Ballarat Gold Mine, said the state response was critical.
We have no plans to change our policy that will ensure Victorians secure a fair return from the minerals dug from our soil
- Treasurer Tim Pallas
She said: "I'm supportive of whatever structure ensures some of the smaller miners, who are still looking for more capital to do drilling - like Ballarat - are able to continue operating and don't close down."
In a statement, the treasurer Tim Pallas confirmed his department were reviewing a proposal from the Minerals Council. He said they would "continue to consult with the industry on this matter"
"We have no plans to change our policy that will ensure Victorians secure a fair return from the minerals dug from our soil."
His words were echoed by the member for Buninyong Michaela Settle, who said she would "continue to work constructively with the Ballarat Gold Mine" and that she was "always happy to discuss what is best for their workers while meeting the needs of our state."
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