The mining industry in Victoria is continuing to push against the state government's proposed royalty on gold mining.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The rate will be set at 2.75 per cent of the net market value of gold production - Victoria is the only state without a gold mining royalty, however it will kick in on January 1 2020.
It's expected to raise $27.8 million each year.
The Minerals Council of Australia submitted four recommendations to the state government, hoping to reduce the tax's effect on smaller mines, including the Ballarat Gold Mine.
However, it says it has been ignored.
According to Victorian executive director James Sorahan, there needs to be an exploration offset to encourage growth, a progressive structure with a gold price floor, staged implementation, and a structure to ensure any revenue is spent in regional areas.
"We're not arguing against the royalty, we're just saying it should only be paid when mines are big and profitable," he said.
Ballarat Gold Mine's general manager Stephen Jeffers said the proposal could affect jobs - while the mine is owned by Singapore-based LionGold, the company pays tax in Australia and operates on a thin margin.
"The royalty as it's announced is a travesty and puts our operation in real risk," he said.
"We've been open and honest and constructive and tried to work with the government, but they bulldozed it in."
Suppliers and contractors would also be affected if smaller regional mines go under - Gekko Systems, which uses the Ballarat mine to develop mining equipment, could be left in an unenviable position if the mine closed, chairman Elizabeth Lewis-Gray said.
"Investing in the mining industry is a 10 year, 15 year proposition, you can't just turn around and with the blink of an eye change the industry," she said.
In response, Treasurer Tim Pallas said in a statement submissions were being reviewed and industry was being consulted.
"We have no plans to change our policy that will ensure Victorians secure a fair return from the minerals dug from our soil," he said.
The state government also pointed to the $3 million it has allocated in grants to various mining projects, and added the royalty will exclude very small producers.
The current price of gold is unusually high, Mr Jeffers added, and government policies should reflect that the price can be volatile.
"(Right now it's) $2230 an ounce - it's good at the moment, but a year ago it was $1620," he said.
"I've been through this sorts of things before, I've seen metal price spikes before, and you try and ride them while you can but they don't last long."
"We can't design a tax system around the current gold price because everything points to it being anomalous at the moment."
Have you signed up to The Courier's variety of news emails? You can register below and make sure you are up to date with everything that's happening in Ballarat.
