The commitment from the federal Coalition to introduce an Exploration Development Incentive for investors in junior resource companies is the right move at the right time according to the peak body for minerals and energy companies in Queensland. Responding to the policy announcement by Shadow Energy and Resources Minister Ian Macfarlane, Queensland Resources Council Chief Executive Michael Roche said a confidence boost for the exploration industry was critical in a period of financial uncertainty.

“Junior resource companies are responsible for the lion’s share of Queensland’s major resource discoveries and in today’s risk-averse investment climate, many of them are struggling to raise the capital needed to stay afloat,” Roche said.

“I know personally of situations where exploration companies have had to let go of staff and make deep salary cuts to keep their doors open. Providing investors with a modest tax incentive to support explorers is a sound investment in the future and something the QRC has been pressing successive federal governments to adopt.

“Ian Macfarlane knows that we can’t keep living off the proceeds of old discoveries and is to be congratulated for having this initiative endorsed by his Coalition leadership colleagues.

The Chairman of the Queensland Exploration Council Dr Geoff Dickie also welcomed the policy announcement.

“The targeting of companies with no taxable income and capping the scheme at $100 million over four years is a cautious start but we expect that once in action, the Exploration Development Incentive will show itself capable of paying back many times over.

“Explorers are highly dependent on service providers at every stage of their operations, which means the exploration dollar is spread far and wide throughout the economy,” Dickie said.