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The South Australian Chamber of Mines & Energy (SACOME) welcomes the Junior Mineral Exploration Tax Credit (JMETC) initiative, announced by Prime Minister Malcolm Turnbull to replace the Exploration Development Incentive (EDI).
Under the initiative, junior exploration companies can renounce and pass on losses relating to their greenfield exploration expenditure to Australian resident investors. These losses would be distributed as a tax credit to shareholders.
The Commonwealth has committed $100 million over four years to the JMETC scheme to encourage new private investment in greenfield exploration ventures.
For more than a decade SACOME has advocated for a policy that allows junior explorers to pass on losses to shareholders.
Architect of the original exploration tax credit concept and SACOME Councillor, Dr Alice McCleary, has been linked to its evolution since 2007.
"Hopefully the proposed JMETC will solve many of the technical problems with the EDI and bring it closer to pre-EDI architecture. The proposed 'first-come-first-served' access to tax credits is an unusual feature for a tax measure and I await further details being announced” said Dr McCleary.
Rebecca Knol, Chief Executive Officer SACOME said “The ability to use credits against personal income tax provides a strong incentive for shareholders to commit capital to the exploration sector. This makes investment attractive in greenfield mineral exploration, while addressing the issue of limited investment capital in a competitive market.”
SACOME looks forward to working with the Commonwealth on the implementation of the JMETC to ensure it works from both a commercial and regulatory perspective.
Media contact: Rebecca Knol, CEO SACOME, 0409 012 007