In a joint media release with the Minister for Finance, Senator the Hon Mathias Cormann, the Australian Coalition Government has announced its support of smaller exploration companies undertaking greenfields mining exploration, making mineral discoveries crucial to the Australian economy.
Minister for Resources and Northern Australia Matt Canavan said that, through the Junior Minerals Exploration Incentive, the Government would provide $100 million over the next four years to allow greenfields exploration programs to distribute their tax losses as a credit to Australian resident shareholders.
“The Government recognises the critical role that smaller, or ‘junior’, mineral explorers play in maintaining a healthy and vibrant resources sector, and we are committed to supporting this sector.
“Greenfields mineral exploration underpins the Australian resource sector by finding new mineral deposits and ensuring a strong investment pipeline.
“Our Government is focused on promoting investment and driving economic activity. Ongoing exploration and the discovery of new mineral resources are essential to the longer-term future of Australia’s resources sector. They are also the vital components for the tools of our modern economy – from smartphones to solar panels.”
Minister for Finance Mathias Cormann said the Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017 amended the tax law to replace the former Exploration Development Incentive with the Junior Minerals Exploration Incentive.
“This tax incentive will encourage junior explorers to take risks and to have a go at discovering the next large-scale mineral deposit,” Minister Cormann said.
Minister Cormann said this new incentive entitled Australian resident investors in small minerals exploration companies to a refundable tax offset (or where the investor is a corporate tax entity, additional franking credits) if the company in which they have invested issued them an exploration credit.
Minister Cormann said mineral exploration acted as a catalyst for new investment opportunities and job creation while supporting local businesses in regional communities across Australia.
“This incentive builds on the exploration development incentive, which ceased in 2016-17, and has been developed based on industry feedback.”
Minister Canavan said that, despite good prospects, Australia had not had a world-class minerals discovery in more than 20 years.
“Expenditure on greenfields exploration declined by almost 70% over the five years to 2015-16. This incentive will make it more financially attractive for our mineral explorers to find resources in untapped regions, continuing discovery of quality resources.”