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Monday, 13 November 2017

The Government has announced new tax deductions for small miners.

It has announced that under the Junior Mineral Exploration Tax Credit it will commit $100 million to secure additional private investment in vital greenfields mineral exploration “to drive the next wave of mineral discoveries crucial to the resources sector and the Australian economy”.

The new concession requires legislation which is still being prepared.

The scheme will apply from 1 July 2017 until 30 June 2021, with total credits limited to $100 million.

Prime Minister Malcolm Turnbull said the (JMETC would allow the tax losses in greenfields exploration companies to be distributed as a credit to Australian resident shareholders. “These tax incentives will encourage ‘junior explorers’ to take risks and to have a go at discovering the next large-scale mineral deposit.”

He said, “We want to back enterprise. We want to turnaround the greenfields minerals exploration expenditures that have declined by almost 70 per cent over the past five years.”

“Under the new $100 million JMETC scheme, Australian resident investors of junior explorer companies will receive a tax credit where the exploration company chooses to give up a portion of their losses relating to their greenfields exploration expenditure in an income year.

“The ability to immediately distribute tax credits to investors will make investing in a ‘junior explorer’ more immediately attractive and encourage investment in small exploration companies undertaking greenfields mineral exploration in Australia.

Deputy Prime Minister and Minister for Resources Barnaby Joyce said only newly issued shares relating to capital raising for investment in new greenfields exploration activity will be eligible for these tax credits.

This would help maximise the incentive for additional investment in minerals exploration.

Tax credits of up to $100 million over four years would be made available from this financial year on a first-in first-served basis consistent with arrangements to be administered by the Australian Taxation Office.

He said the JMETC improves on previous pilot programs assisting junior mineral explorers and has been developed based on industry feedback.


Further information

Prime Minister's media release: Investing in the future strength of the Australian resources sector

ATO: Junior Mineral Exploration Tax Credit

Department of Industry, Innovation and Science: Junior Mineral Exploration Tax Credit

Fairfax Media: Mineral exploration up, but more needed 'to find the mines of tomorrow'

Fairfax Media: Turnbull invests $100m to secure mining investment, drive discoveries

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