West Australian Treasurer Ben Wyatt has signalled he won't be bullied by the gold mining industry, which is opposing royalty rate hikes that were unveiled in the state budget.
The new Labor government plans to increase the gold royalty rate from 2.5 per cent to 3.75 per cent when the spot price eclipses $A1200 per ounce ($US969.70/oz), which has been the case for many months, starting from January.
Based on the current high spot price for the precious metal of about $US1349/oz ($A1674/oz), that equates to an additional royalty of about $20/oz.
The Association of Mining and Exploration Companies labelled the hike a short-sighted cash grab while the Chamber of Minerals and Energy described it as "as a slap in the face", with both groups warning jobs could be lost.
The gold sector also suggested it could respond by cutting exploration, which Mr Wyatt rejected.
"At $A1600, an extra $20 an ounce won't halt exploration," the state treasurer told a business forum on Friday.
"Ultimately miners are looking for their next revenue source."
The state government has justified the increase by saying WA, which accounts for 75 per cent of the nation's gold output, charges a low gold royalty rate compared to other Australian jurisdictions.
But Gold Road chief executive Ian Murray said WA's vast distances meant costs of production were higher.
"Our project is 1200 kilometres away from Perth," Mr Murray told reporters.
"Average costs at the moment are around $A1100/oz. At $100 margin, there won't be much of an industry."
He insisted exploration was first on the chopping block when margins shrank.
"There won't be jobs growth because exploration is going to be curtailed and new projects won't be discovered," Mr Murray said.
Opposition Leader Mike Nahan predicted on Wednesday the budget would contain the royalty plan, noting Labor fought against it and promised to block it when last mooted in August 2016.
Dr Nahan said the Liberals would consider it seriously, but could form a bloc with the Nationals and One Nation to scupper it if they weren't satisfied with the details.
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