PERTH (miningweekly.com) – Western Australia’s gold miners have joined forces, reuniting to form the Gold Royalties Response Group (GRRG) in an effort to deter the state government from hiking royalties on the precious metal.

The government is currently reviewing the state’s royalty rates, with Premier Colin Barnett previously quoted as saying that an increase in gold royalties could still be on the cards.

The royalty review aims to identify anomalies in the current structure, rather than consider major changes to royalty arrangements, to examine the efficacy and appropriateness of existing policy, and to consider the equity and efficiency implications of any proposed changes to the royalty rates.

Gold royalties currently reflected 10% of the mine head value of the mineral.

The GRRG warned on Friday that an increase in the royalty rate for gold would have a detrimental effect on Western Australia’s gold industry.

GRRG spokesperson Allan Kelly, who is also the MD of ASX-listed Doray Minerals, said the group believed an increase in gold royalties, such as the one proposed in 2010, would significantly and adversely affect many gold producers with assets in Western Australia.

“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 Mount Magnet through additional job losses and cuts to valuable services,” he said.

“It will also seriously undermine future investment in the industry against a backdrop of major companies exiting gold projects in Western Australia.”

GRRG is preparing a submission for the state government’s review of mineral royalty rates, due at the end of this month, and has welcomed industry stakeholders to add their opinion.

Current members of the GRRG include 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.