PERTH (miningweekly.com) – The Western Australian government’s royalty review was likely to reach a conclusion late this year, allowing a government decision to be reflected in the 2015/16 budget.

An additional A$560-million would be added to royalty revenue by 2015/16, with gold expected to be the largest contributor to this revenue stream.

Department of Mines and Petroleum deputy director-general Michelle Andrews told delegates at the Association of Mining and Exploration Companies (Amec) Convention that the review had not yet reached any conclusions.

The royalty review would examine the policy that revenue returned from royalties was broadly equivalent to 10% of the total mine-head value of material mined in the state, and would examine the extent to which the current royalty rate structure produce revenue which differed from this 10%.

Furthermore, the review would address any anomalies in the royalty structure.

Andrews pointed out, however, that the review was not aimed at implementing major changes to royalty arrangements or to consider changes that would have a detrimental effect on the state’s revenue base.

She noted that public consultation had been a significant part of the review, with some 19 companies making submissions on the review at the end of October last year.

However, Amec CEO Simon Bennison pointed out that the review had raised some interesting issues, including the 10% benchmark used by government, which had not been widely known by industry.

“It is an issue that Amec has been addressing since this benchmark is not universally used in all states and territories,” Bennison said.

“There are a number of issues with the royalty review that Amec has been working through,” he added.

Royalties currently account for some 22% of the state revenue with the value of the sector estimated at A$113-billion. Further projects valued at A$143-billion were either committed or under consideration.

Western Australia currently produces some 50 different minerals and has over 500 commercial mineral projects operating over 1 000 mine sites. An additional 50 oil and gas projects were also present in the state, or directly offshore.