The Association of Mining and Exploration Companies (AMEC) has called on the Federal Government to extend the Junior Mineral Exploration Incentive (JMEI) so Australia is positioned to meet the increasing demand for critical minerals.
Launched in 2018, the JMEI encourages and attracts investment in small mineral exploration companies that carry out greenfields exploration in Australia.
Eligible mineral exploration companies can convert their tax losses into exploration credits, which are then distributed to investors as a refundable tax offset.
According to the ‘Junior Minerals Exploration Incentive Economic Impact Assessment Report’ prepared by BDO Australia and commissioned by AMEC, 131 successful JMEI applicants received $182.2 million in tax credits between 2017 and 2024.
This resulted in $404 million of additional greenfield exploration activity taking place that may not have without the program.
“This is expected to lead to production of $5.9 billion of minerals around Australia in present value terms,” the report said.
“The associated mining activity is estimated to contribute $391 million in present value terms to Australian Government revenue from additional personal income and company taxes along with $769 million in GDP (gross domestic product) to the Australian economy in present value terms.”
AMEC chief executive officer Warren Pearce said the report’s econometrics highlight why the JMEI should continue, describing mineral exploration as “the lifeblood” of the Australian mining industry.
“The Junior Minerals Exploration Incentive is a significant stimulus for the exploration sector and a substantial contributor to Australia’s economy and government revenue,” Pearce said.
“Every dollar allocated results in more than $2 spent on exploration activity and more than $6 is raised on capital markets by companies. This report identifies that the JMEI is doing exactly what it set out to do.”
AMEC recommends that the JMEI be extended to the 2028–29 financial year at a minimum and for at least $200 million to be allocated during that period.
AMEC’s other recommendations include:
- making the JMEI a permanent initiative in the Federal Budget
- developing a merit-based allocation process rather than using a first in, first served process
- requiring successful JMEI applicants to report impacts to the Federal Government on an annual basis
- increasing awareness of the JMEI and encourage more exploration companies to apply.
“We need to replenish end of life mines with new greenfield exploration discoveries,” Pearce said.
“This is a critical investment in Australia’s future and supports mineral exploration – a long-term, high-risk activity. And by doubling the investment, you’re doubling the benefits.
“Each discovery that leads to a mine creates new jobs, royalties and government revenues.”
BDO economics partner Anders Magnusson said more positive effects can be expected if the JMEI is extended.
“By increasing the total amount of credits available and allowing them to be used over a longer period, more businesses could benefit from the program,” Magnusson said.
“Many businesses, especially those that did not apply for the JMEI, cited a lack of knowledge about the program as a barrier.
“By boosting visibility and understanding of the JMEI, more companies could be encouraged to participate, thereby increasing overall exploration activity and investment in the sector.”
In late 2024, AMEC successfully campaigned for a 10 per cent critical minerals production tax incentive to be included in the Federal Government’s Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024.
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