SACOME said implementing such a policy in the form of a flow-through shares scheme would encourage much-needed investment in junior resources companies and secure required start-up capital.
The scheme – first proposed under Kevin Rudd, but scrapped in favour of the mining tax – would allow companies with a lack of income to issue shares with tax deductions ‘flowing through’ to investors.
SACOME expects this to provide a strong incentive for shareholders and make investment in juniors more attractive.
“With recent downtrends in mineral exploration expenditure, softening commodity prices and extremely constrained capital markets, junior resources companies are facing tremendous challenges right now to develop their deposits into economical projects,” SACOME chief executive Jason Kuchel said.
“The junior resources sector is absolutely vital - many people do not realise it’s the engine room needed to find the resources, upon which our economy is so dependant.
“Australia continues to lose its share of global exploration expenditure down from 21 per cent in 1996 to only 17 per cent in 2010.”
Infrastructure was another key issue raised by the chamber, with an emphasis on the need for a multi-suer deep water port and an upgrade of electricity transmission networks along the Eyre Peninsula.
“The federal government should use bodies like Infrastructure Australia and the Export Finance and Insurance Corporation (EFIC) to provide funding agreements to stimulate infrastructure in the state where the market has failed to deliver a solution,” Kuchel said.
“This solution has already proven its success with the federal and state governments assisting Nyrstar to arrange a funding agreement with EFIC to upgrade the Port Pirie smelter last year, securing the future of the company in the community and providing a solution to long-standing environmental issues.”
SACOME has pointed out that no cape-size bulk commodities port has been built in Australia without some level of government support.
Other points the chamber identified for consideration by federal policymakers included rescinding of the minerals resource rent tax, an increase in funding for efforts to resolve native title claims, immediate deductibility for exploration expenditures (as was the case before May 2013) and amendments to environmental policy.
