Question On Notice No. 478 asked in the Legislative Council on 31 October 2017 by Hon Robin Chapple
Question Directed to the: Minister for Regional Development representing the Minister for Mines and Petroleum
Parliament: 40 Session: 1
Question
I refer to the media statement, dated 7 September 2017 titled, "Changes to gold royalty arrangements part of budge repair task", and comments attributed to the Minister, and I ask:
(a) can the Minister explain how the Department of Mines, Industry Regulation and Safety (DMIRS) and Government understand the challenges that smaller producers and prospectors face within the industry to retain the 2,500 ounce royalty free threshold;
(b) if no to (a), why not;
(c) can the Minister state what the specific challenges are that both small producers and prospectors face within the mining industry as a whole, not necessarily related to the proposed gold royalty issue;
(d) if no to (c), why not;
(e) can the Minister explain why is it so important to protect small gold producers and prospectors with the retention of the 2,500 ounce royalty free threshold;
(f) if no to (e), why not;
(g) can the Minister explain how the retention of the 2,500 ounce royalty free threshold for smaller gold producers and prospectors helps the State of Western Australia; and
(h) if no to (g), why not?
Answered on 5 December 2017
(a) The Government understands the challenges that are faced by regional mining including small gold producers and gold prospectors. This is the original intention of the royalty free threshold that was introduced as part of the gold royalty in July 1998. Following the Government’s announcement on 21 November, all producers and prospectors will continue to retain the 2500 troy ounce royalty exemption.
(b) Not Applicable
(c) There is the inherit uncertainty regarding the presence and extent of gold in the ground which is the property of the Western Australian community. The challenges for explorers, prospectors and miners are to discover where the gold is, and develop safe, cost-effective, and environmentally acceptable methods of collection and/or mining.
(d) Not Applicable
(e) Based upon current exchange and gold prices, the 2500 ounce royalty free threshold enables prospectors and small miners to sell approximately $4 000 000 worth of gold each year without having to pay any royalty to the State. At the proposed royalty rate of 3.75 per cent, the royalty payment for 2500 ounces would otherwise be approximately $150 000. This helps encourage small producers and prospectors.
(f) Not Applicable
(g) See answers to (c) and (e).
(h) Not Applicable