The WA Government has today unveiled a revised gold royalty rate coupled with a gold industry assistance program.
This proposal has been developed after listening to the concerns from the gold industry regarding the pressure on jobs and the impacts on the exploration and drilling sector that were raised through the initial gold royalty proposal.
The new gold royalty, which will come into effect from January 1, 2018, will deliver the same tiered rate (an increase from 2.5 per cent to 3.75 per cent), but will only apply when the gold price is above $1,400/ounce, instead of the previously planned $1,200/ounce.
The initiative also includes an assistance package for marginal gold mines.
This assistance package enables marginal miners, having all-in sustaining costs above 85 per cent of the gold price, to be refunded the increased royalty rate paid.
This measure wholly offsets the royalty rate increase for marginal miners, addressing industry claims that jobs could be lost from such operations.
Under the Government plan, operating conditions for marginal gold mines will be unchanged.
Assistance will be in place for a minimum of two years from the commencement of the rate increase.
The Government has accepted industry feedback that medium-sized producers, with production between 2,500 ounces and 10,000 ounces, would have been unduly affected by the changes. As a result the 2,500 ounce royalty free threshold will be reinstated.
Small producers and prospectors that produce less than 2,500 ounces per annum will not be affected by these changes and will continue to be exempt from paying royalties.
The royalty rate increase is expected to generate net revenue of $332 million over the forward estimates to contribute to budget repair.