The Ballarat Gold Mine and the Minerals Council of Australia have come out swinging against a gold mining tax set to commence early in 2020.
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The tax 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.
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Ballarat Gold Mine's general manager Stephen Jeffers said he was extremely disappointed with the government's decision.
"I'm pretty disappointed with the government for doing this," he said.
"It'll cost us around an extra $2 million a year... all it does is add to our cost base, it doesn't do anything positive at all.
We're not opposed to all taxes and royalties, however they need to be done correctly.
- Ballarat Gold Mine's general manager Stephen Jeffers
These sentiments were echoed by Minerals Council of Australia Victorian executive director James Sorahan, who told The Courier the tax could lead to mines closing prematurely.
"(The tax) ignores the fact that in Victoria there is a lot of ongoing exploration spending to keep a mine open," he said.
"That kind of spending would likely be the first thing to go from mines should this tax come into play.
"The issue with cutting exploration would be that it could lead to a mine closing prematurely... gold in Victoria is quite hard to find so it takes time."
Minister for Economic Development, Industrial Relations and Treasurer Tim Pallas' department said the tax would only affect five companies across Victoria, which account for 99.8 per cent of the state's gold production.
Castlemaine Goldfields, which the Ballarat Gold Mine is a part of, was among the five companies listed.
Minister Pallas added this tax was something Victorians needed.
"We're seeing an extraordinary gold resurgence - acting now is essential for Victorians to secure a fair return from the resources dug from our soil," he said in a statement.
"This will be invested across the state on the infrastructure and services that Victorians voted for and need."
There remains a chance the removal of the tax exemption could be contested in the new year.
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