Mining industry’s lament after Albanese Government ends exploration tax break that induced $1.2b of capital

The Federal Government has stopped handing out a tax sweetener used by WA’s plethora of mining explorers in a move labelled “a setback” for the whole industry. The Junior Minerals Exploration Incentive was not extended in this year’s Federal Budget handed down on Tuesday, squashing a tax break scheme that provided $182 million in benefits over the past seven years. Companies were eligible for a tax deduction if they invested in greenfield mineral exploration. BDO’s global head of natural resources and energy Sherif Andrawes said the Government’s decision to turn off the tax credit tap was “particularly disappointing” given the “proven success” of the program in stimulating investment and exploration activity. A report by BDO and the Association of Mining and Exploration Companies claimed that for every dollar allocated to the JMEI more than $2 was spent on exploration and more than $6 was raised in capital markets. This equates to about $400 million in exploration and $1.2 billion of capital raisings. ”The omission of the JMEI from the Federal Budget is a setback for the mining and exploration sector,” Mr Andrawes said. ”The program has proven to be highly effective in encouraging investment in junior exploration companies, which are the backbone of our mining sector.” AMEC chief executive Warren Pearce also slammed the Government’s decision. “The JMEI is a proven program that supports junior exploration companies and is a substantial contributor to Australia’s economy and government revenue,” Mr Pearce said. “Exploration needs support, and we need to see strong commitments from the major parties during this election campaign. “You can’t have a mining boom or downstream processing, if you don’t make the discoveries in the first place.”