Newmont, Gold Fields join royalties rebellion MAJOR international gold producers Newmont Mining and Gold Fields have united with Perth's smaller gold players in their fight against a proposed rise in Western Australia's gold royalties. The majors have joined the likes of Regis Resources, Silver Lake Resources and Evolution Mining in a campaign against a proposed increase in gold royalties, with 10 companies joining the Gold Royalties Response Group. The GRRG is warning that any rise in gold royalties could force some mines to close and drive some miners into administration. The Barnett government is currently reviewing the structure of its mineral royalties. Premier Colin Barnett wants to see royalties of about 10 per cent applied, less discounts for any processing that takes place. At present, gold production in WA attracts a royalty of just 2.5 per cent. GRRG spokesman Allan Kelly, who is also the managing director of small WA goldminer Doray Minerals, noted that a number of WA goldmines had already fallen into administration in recent months on the back of falling gold prices and high costs. "With gold prices coming down and margins being challenged, if you add an extra amount to the cost base it has the potential to shut down operations," Mr Kelly told The Weekend Australian. Any time you increase the cost and you have that squeeze on profit margins, you have those mines that get tipped over the edge into administration or shut down. Recent research by JPMorgan estimated that about 30 per cent of WA's gold output is being produced at a cost in excess of the current gold price, while a further 30 per cent is considered marginal. Smaller goldminers such as Apex Minerals and Navigator Resources have gone into administration recently, while Focus Minerals and Tanami Gold have shut goldmines in WA this year.