PERTH (miningweekly.com) – The Association of Mining and Exploration Companies (Amec) has called for policy reform to ensure Australia retains its attractiveness as a resources investment destination, launching its Federal Policy Platform this week.
The industry body said that it would work with the federal government in an effort to ensure that the policy issues raised were addressed, said Amec CEO Simon Bennison.
“Amec is recommending the diesel fuel credit be reinstated to its pre-carbon tax levels and that government withdraw proposed amendments to the Native Title Act, rescind the minerals resource rent tax, rescind the carbon tax and address concerns surrounding environmental reform, regional infrastructure, and industrial relations and workplace issues.”
Bennison noted that Amec’s key initiative at the federal level was the implementation of a minerals exploration tax credit (METC) tax reform measure to provide an incentive for investment in much needed greenfield minerals exploration in Australia.
“The METC model is a combination of the spectacularly successful Canadian flow through shares model, Australia’s franking system and a tax credit.
“It will be voluntary and at the discretion of the company on whether they wish to forego their current ‘trapped losses/ future tax benefit’ to their Australian resident shareholders, and will only be available for Australian companies with ‘no taxable income’ conducting greenfield exploration in Australia.”
Bennison noted that policy reform was critical in order to maintain and enhance Australia’s position as an attractive jurisdiction for mineral exploration and mining investment.
“Australian explorers are increasingly heading overseas to apply their skills and finance to find new resources in countries that are in direct competition to Australia. Over the last few years, in excess of 50% of funds raised from Australian investors on the ASX through new initial public offerings have been for overseas projects such as Canada and Africa.”
He warned that Australia’s mining industry is no longer internationally competitive, with production costs continuing to rise dramatically.
“Australia is also experiencing a very concerning situation where discoveries are reducing, getting deeper and harder to find, and critical equity investment is being lost to competitive offshore projects.”
Bennison noted that the Productivity Commission inquiry into the non-financial barriers to mineral and energy resource exploration, cited that it took between 500 and 1 000 grassroots exploration projects to identify 100 targets for advanced exploration, which, in turn, led to 10 development projects, one of which becomes a profitable mine.
“Considering that it also takes on average seven years once a viable discovery is made to mining production, we must act now.
“The challenge for industry is encouraging politicians to think about the long-term vision when creating investment strategies. These strategies will generate revenue streams for government, reduce the national debt and create regional employment opportunities 10 to 15 years down the line."