Miners Oppose Higher W Australian Royalties

by Mary Swire, Tax-News.com, Hong Kong

17 March 2010

At the Paydirt 2010 Australian Gold Conference, the chief executive officer of the Chamber of Minerals and Energy of Western Australia, Reg Howard-Smith, has advised the Western Australian state government not to increase mining royalties in its forthcoming budget.

He said that increased royalties in Western Australia could not only discourage investment in mining projects under consideration in the state, but also put at risk increased growth in the state in an emergence from the economic recession.

The Australian mining sector, as a whole, is also under pressure from the indications that the federal government will propose a national resources rent tax, arising out of the Henry tax review.

It is estimated that Western Australia’s resources sector has a total production of some AUD72bn (USD65.8bn) per year, and already pays AUD3bn in annual royalties, a 137% increase over the last five years. Howard-Smith also indicated that there was around AUD135bn of projects, contracted or under consideration, in the state.

It has been reported that the state government is reviewing state royalties in general ahead of the announcement of its state budget. It has also been indicated, however, that any overall increase would be modest.

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