PERTH (miningweekly.com) – The Australian Parliament has passed the Junior Minerals Exploration Incentive (JMEI), which will see the government provide A$100-million over the next four years to allow greenfields exploration programmes to distribute their tax losses as a credit to Australian resident shareholders.

Finance Minister Mathias Cormann said the Treasury Laws Amendment Bill 2017 amended the tax law to replace the former Exploration Development Incentive with the JMEI.

“This tax incentive will encourage junior explorers to take risks and to have a go at discovering the next large-scale mineral deposit,” Cormann said.

He explained that the incentive entitled Australian resident investors in small minerals exploration companies to a refundable tax offset if the company in which they have invested issued them an exploration credit.

“The ability of an exploration company to give up their tax losses to distribute credits to investors as a tax offset will make investing in a junior explorer much more attractive,” he said.

Resources and Northern Australia Minister Matt Canavan said that the government had recognised the critical role that junior mineral explorers play in maintaining a healthy and vibrant resources 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.”

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.

“It aims to improve on the timeliness of the offset and to target new investors that participate in new capital raisings. This will help maximise the incentive for additional investment in minerals exploration.”

Canavan added 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.”

The Association of Mining and Exploration Companies has welcomed the passing of the Bill, with CEO Warren Pearce saying it was a vital investment in Australia’s future.

“Recent research into existing mines indicates that as these mines reach the end of their current lives there will be significant reductions in production and government revenue streams.

“The JMEI will support the development of future mines by encouraging greater greenfields mineral exploration, which will drive the discovery of new mineral deposits,” Pearce said.