The Minerals Council of Australia has come out swinging against a gold mining tax set to commence early in 2020.
The tax rate will be set at 2.75 per cent of the net market value of gold production - Victoria is the only state without a gold mining royalty, however it will commence on January 1 2020.
It's expected to raise $27.8 million each year.
Minerals Council of Australia Victorian executive director James Sorahan saidthe tax could lead to mines closing prematurely.
"(The tax) ignores the fact that in Victoria there is a lot of ongoing exploration spending to keep a mine open," he said.
"That kind of spending would likely be the first thing to go from mines should this tax come into play.
"The issue with cutting exploration would be that it could lead to a mine closing prematurely... gold in Victoria is quite hard to find so it takes time."
In August 2018, Arete Capital Partners announced it would invest in mining operations at Stawell over the following two years. The investment would include both above and below ground upgrades worth about $80 million.
Minister for Economic Development, Industrial Relations and Treasurer Tim Pallas' department said the tax would only affect five companies across Victoria, which account for 99.8 per cent of the state's gold production.
Stawell Gold Mine was among the five companies listed.
Minister Pallas added this tax was something Victorians needed.
"We're seeing an extraordinary gold resurgence - acting now is essential for Victorians to secure a fair return from the resources dug from our soil," he said in a statement.
"This will be invested across the state on the infrastructure and services that Victorians voted for and need."
Northern Grampians Shire Council Mayor Murray Emerson said ongoing support would be provided to Stawell Gold Mine.
"Council have had a number of discussions with several ministers over the past few months about the tax and the pros and cons of it all," he said.
"We think the tax would certainly effect Stawell Gold Mine and our economical viability. This is still the situation in our point of view.
"We can't do much about the tax being imposed."
Cr Emerson said the Council would support the Stawell Gold Mine as they would all "local" businesses within Northern Grampians Shire.
"We will support the company as best we can," he said.
"Our support can come from offering advice and campaigning our members of Parliament on their behalf - as we would to all of our businesses within the shire."
Cr Emerson said Council would continue to have conversations with all key stakeholders within the shire.
There remains a chance the removal of the tax exemption could be contested in the new year.
Stawell Gold Mine was contacted for comment.
- 2012 - Underground mine operation to cease
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