South Australia’s peak mining body is urging the government to pass new exploration incentive legislation quickly to support an ailing junior mining sector.
The government’s proposed Tax and Superannuation Laws Amendment and Excess Exploration Credit Tax 2014 Bills will allow junior exploration companies in Australia, with no taxable income, to voluntarily pass current losses on to Australian resident shareholders, in the form of a tax credit.
The South Australian Chamber of Minerals and Energy (SACOME) says the new legisation will make junior miners more attractive to investors an potentially open-up more start-up capital.
Jason Kuchel, Chief Executive, SACOME said “The junior explorers are really doing it tough at the moment. Quarterly exploration expenditure has halved in the last two years to September 2014. Softening commodity prices combined with the constrained capital markets we are experiencing right now is providing an extremely challenging environment for our junior resources companies.”
“Many people do not realise that the junior sector is critical to resource development, being the “engine room” needed to find the mineral resources upon which the economy is so dependant.” Mr Kuchel said.
The government proposes to inject $100 million into the exploration incentive over the next three years.