Australia aims to boost junior mining sector with investment, tax credits

Australian Prime Minister Malcolm Turnbull has announced a A$100m investment programme alongside the creation of a exploration tax credits scheme for junior minerals miners to cover the next four years.

The Aussie government aims to encourage a new surge in exploration across the country and boost the embattled mining sector in West Australia which has been hit by a decline in investment from the larger players.

Allowing junior explorers to generate tax credits and immediately distribute them to investors, Turnbull said the Junior Mineral Exploration Tax Credit (JMETC) would encourage investment and "risk taking".

"These tax incentives will encourage 'junior explorers' to take risks and to have a go at discovering the next large-scale mineral deposit," Turnbull said.

"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."

Meanwhile, the country's Association of Mining & Exploration Companies warned the Western Australian government that increasing gold royalties will harm investments in that sub-sector.

There has been reports that the state government is looking to increase the current 2.5% production royalty.

Some form of gold royalty hike is likely to be announced in Thursday’s state budget, the Australian newspaper reported, though iron ore miners are protected under state agreements.