WA's beleaguered gold sector is preparing for war with the Barnett Government over how much royalties are paid.
The WA Gold Royalties Response Group, which last locked horns with politicians in 2010, was officially reformed yesterday, counting powerful new members in its ranks.
Doray Minerals, Evolution Mining, Gold Fields, Newmont Asia Pacific, Northern Star Resources, Norton Gold Fields, Ramelius Resources, Regis Resources, Silver Lake Resources and St Barbara have banded together to fight what the industry believes is a Government plan to double the gold royalty rate.
The lobbying blitz will be spearheaded by some big names, including former mines minister Norman Moore's key lieutenant, Bob Stevens, who this year joined the Cannings Purple government relations team.
The Barnett Government, which has announced a review of royalty rates it expects to yield an extra $180 million a year, has stressed that no decision has yet been made about which industry will take the hit.
The State expects to make $173 million from gold royalties in 2015-16. That figure - close to the $180 million target - has sparked fears in the gold industry the Government will double the gold royalty rate.
Premier Colin Barnett has fanned concerns by pointing out that the gold royalty rate, which is about 2.5 per cent, was inconsistent with the principle that royalties were 10 per cent of their mine head value.
"With low margins already hurting the industry, and a series of closures and redundancies in the past few months, a royalty increase would further impact local communities including Kalgoorlie, Southern Cross, Meekatharra, Westonia and Mt Magnet through additional job losses and cuts to valuable services," response group spokesman and Doray Minerals managing director Allan Kelly said.
"It would also seriously undermine future investment in the industry against a backdrop of major companies exiting gold projects in WA."
The group is preparing a submission for the review, which is due at the end of the month.
The Government declined to comment, referring to previous statements Mr Barnett had made about the matter in which he reiterated that no decision had been made about which royalties would be jacked up.
The bullion price has been hovering around the $US1300/oz mark, well off the highs of $US1900/oz enjoyed a few months ago. Since the price plunge, producers have shed staff in a scramble to get their production costs down and remain profitable.