Gold miners hit out at Labor

A senior gold-mining executive has berated WA Treasurer Ben Wyatt over his decision to hike gold royalty rates.

The royalty rise is expected to cost WA’s gold miners about $20 for each ounce of gold produced, Picture: iStock

A senior gold-mining executive has used an event attended by more than 1000 business leaders to berate West Australian Treasurer Ben Wyatt over his decision to hike gold royalty rates, claiming the move will cost jobs and reduce exploration.

Mr Wyatt fronted the Committee for Economic Development of Australia function in Perth after revealing in yesterday’s state budget that gold royalties would rise from 2.5 per cent to 3.75 per cent, a move that breaks a pre-election promise by Labor.

The royalty rise is expected to cost WA’s gold miners about $20 for each ounce of gold produced and will deliver the state almost $400 million in extra revenue over the next four years.

Mr Wyatt was today attempting to soothe anger in the business community over Labor’s first budget, which also slugged more than 1000 big companies with higher payroll tax that will add $435, to government coffers.

The chief executive of Gold Road Resources, Ian Murray, told Mr Wyatt at the CEDA function that the royalty hike came after a period of increased investment driven by exploration spending by major producers as well as junior companies.

“The increase in the royalty is going to curtail and reduce the exploration being done,” Mr Murray said. “That’s going to impact on indigenous employment and the further growth of gold project in Western Australia.”

Mr Wyatt said the increased royalty rate would apply only if gold continues to trades above $1200 an ounce. It is now trading at about $1675 an ounce.

“I think there is enough money being made at the moment in gold …. An extra 20 an ounce won’t halt investment, it won’t halt exploration,” he said.

“I don’t think that gold miners, having watched them for a long, long time now, will react by cutting off exploration.”

“Ultimately miners are looking for their next revenue source.”