Andrew Duffy (MiningNews.net)
New laws to establish the Exploration Development Incentive have passed the senate and are set to provide a well-needed boost to junior explorers.
Under the EDI eligible explorers can convert a portion of their tax loss to exploration credits, which can then be provided to shareholders.
Shareholders can use those credits to claim a tax benefit.
The scheme starts from July 1, and will be capped at $A100 million over a three-year period before being reviewed.
The Chamber of Minerals and Energy of Western Australia welcomed the new laws, and said it had worked closely with the government to establish the legislation.
“CME has long sought a form of incentive that recognises the long lead times between investment, exploration and production over a number of years and the risks faced by investors in these early start up stages,” CME CEO Reg Howard-Smith said.
“Notwithstanding the transition underway in many major projects from construction to the operational phase, particularly in bulk commodities, the future pipeline of projects relies upon increasing the current level of exploration activity.
“Exploration is the lifeblood of future industry.”
The incentive was presented as part of a wider Bill including amendments to tax and superannuation laws.
It passed the House of Representatives earlier this year, and a final version was agreed on in the senate yesterday.
The CME said it would be seeking to include oil and gas exploration in the new laws as soon as possible.
“It is pleasing that the government have honoured an election commitment which could boost exploration activity, future investment and jobs growth,” Howard-Smith said.