The royalties paid by gold producers to the New South Wales government in Australia rose 12.5% in the 2016 financial year.
“New producers may not enjoy hearing this, but again we’d like to thank you for lifting your royalty contribution from A$48 million to some A$54 million, which of course goes into building our schools and hospitals,” state Industry, Resources and Energy Minister Anthony Roberts told delegates on the first day of the Precious Metals Investment Symposium in Sydney, Australia.
This is likely to increase further in the current financial year, with Newcrest Mining Ltd. expecting to produce between 730,000 ounces and 820,000 ounces of gold from its Cadia mine compared to 670,000 ounces last financial year.
Statewide production in the 2016 financial year rose more than 11% to just short of 1.9 billion ounces, from 1.7 billion ounces.
“At a time when there is widespread belief in some people in the Commonwealth, and also global investors, that low commodity prices has the entire resources industry in Australia on the ropes, can I say that it’s important that we make it very clear that it’s not,” Roberts said.
“Yes it’s been a challenging time for much of the resources sector, but for the last couple of years, the precious metals industry, for example, has been very much a positive outlier.”
While the gold price in Australian dollar terms has pulled back from a peak of about A$1,800 an ounce in the middle of this year, at roughly A$1,660 an ounce it is still about A$70 higher than it was a year ago, according to Roberts.
“That is despite our currency having gone up against the U.S. dollar over that same period and despite last week’s sell-off,” he said.