Australia in US$80 mil mining investment programme

MELBOURNE: Australia will commit A$100mil (US$79.7 mil) to secure private investment in greenfield mineral exploration across the country to drive a new wave of discoveries and restart the flagging mining sector in its west.

The resource-rich state of Western Australia was at the forefront of a once-in-a-century mining boom during the first decade of the 2000s and into the start of this decade, but has become the country’s worst-performing economy.

The poor economic outlook and gripes over the national distribution of taxes saw the state’s opposition this week discuss a “WAxit” option to break from the Commonwealth of Australia.

Speaking at a Western Australian Liberal Party conference in the state’s capital of Perth last Saturday, Prime Minister Malcolm Turnbull announced new tax incentives for junior exploration companies in a move he said would encourage investment and “risk taking”.

The new junior mineral exploration tax credit will allow the tax losses in greenfield 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. We want to back enterprise. We want to turn around the greenfields minerals exploration expenditure that has declined by almost 70% over the past five years.”

Under the 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.