THE Victorian Liberal National Coalition will block the Andrew’s Government’s planned 2.75pc gold royalty when it is tabled in the state parliament.

Introduced at the May budget, the royalty shocked the emerging Victorian gold industry which had seen something of a renaissance since 2015, with Kirkland Lake’s (ASX: KLA) Fosterville gold mine becoming Australia’s most lucrative pure-play gold mine.

While a gold royalty applies in all other states, there was concern that it would cripple vital early investment in Victoria.

Although the industry has said it was not opposed to a gold royalty, it said proper consultation on its structure was needed, and that it be introduced over three years.

But successful opposition of the tax will be hard fought.

Labor controls 18 of the 40 available seats in Victoria’s upper house, and the Liberal National Coalition controls 11, meaning that 10 of the 11 crossbenchers must side with the Coalition for the royalty to be disallowed.

Image: Kirkland Lake Gold

The Coalition said that the tax would have a detrimental effect to investment in the regions and would hurt jobs.

“The gold industry is vital to the local economies in our regions, including Stawell, Ballarat and Fosterville, and Labor’s gold tax is going to make life even tougher for regional Victoria,” it said.

This comes within the same week that possibly the hottest bit of real estate in the Victorian gold industry was put up for tender by the government.

Four new exploration tenements will be up for bids, and the exploration tenement previously known as EL3539, which was taken off Fosterville in a deal that allowed the miner to absorb portions of the tenement into its lease, is back on the market as Block 4.

Block 4 will cover more land and, given the extraordinary success of Fosterville, is likely to be the most sought after of the four available tenders.