The Minerals Council of Australia (MCA) has criticised the federal government’s latest capital gains tax (CGT) reforms, warning that excluding early-stage mineral explorers from tax concessions risks driving world-class exploration projects offshore.
MCA CEO Tania Constable stated that the policy settings leave junior explorers “left out in the cold” while offering concessions to innovative tech startups.
According to the peak body’s analysis, the tax changes will reduce post-tax investor returns in junior mining companies by at least 19 per cent.
The industry group argues that early-stage resource exploration carries identical, if not higher, risk profiles to traditional venture capital and startup investments.
By tipping tax settings in favour of lower-risk assets, the policy threatens to starve explorers of the retail investment capital needed to uncover new mineral deposits.
“Without junior explorers there are no new mines, no future royalties, no future exports and no future critical minerals projects,” Constable said.
“Australia should be making minerals exploration more competitive, not burdening this crucial sector with higher taxes.”
The warning comes amid an existing downturn in greenfields exploration, hunting for resources in uncharted territory, which has dropped from one-third of total national exploration spending in recent years to just one-quarter over the past financial year.
Industry leaders stress that the additional tax burden compounds previous pressure caused by the abolition of the Junior Minerals Exploration Incentive.
The MCA warned that penalising junior miners will directly disrupt Australia’s ability to build secure supply chains for critical minerals at a time when global demand for strategic resources is rapidly expanding.
