The Coalition opposition brought the matter to a head in state parliament today but could not convince enough crossbenchers to side with them in a vote to scrap royalty.

It means five mines including at Costerfield and Fosterville will continue to pay the royalty, which took effect on New Year's Day.

The government wants to raise $56 million off the gold dug up during the current mining boom but the royalty has been criticised by some industry figures.

More: Why miners are backing a showdown over the gold royalty in parliament

The Minerals Council of Australia led the campaign to modify the royalty after it was first proposed in 2019 and, when unsuccessful, for it to be repealed in parliament.

It had hoped the upper house would veto the fledgling regulation today.

The MCA's James Sorahan said it was a disappointing result but would not stop lobbying for change.

"We'll continue to point out that it is unfair - and how it is unfair - as long as we have to," he said following the upper house vote," he said.

"It (the royalty) won't last. Sooner or later they (the government) will realise it is not fit for purpose."

The MCA does not oppose a royalty on gold dug up by mines in Victoria but wants it changed.

The group is concerned about the impacts of jobs long-term if there are any unintended consequences.

The royalty has been set at 2.75 per cent of gold's price and does not take into account the cost of exploration, Mr Sorahan said.

"Prices are high right now but they can't be expected to last. So if the price drops and a mine has an unsuccessful year exploring for more gold you can expect the royalty to make things hard," he said yesterday before the vote.

The government has argued the royalty will not make the sector any less lucrative and will pay back Victorians for allowing their gold to be dug up.

The sector is currently surging in Victoria and the gold price is high, the government says.

"Profits from the gold royalty will be invested across the state - helping to deliver the infrastructure and services Victorians need," a spokesperson said.