The Association of Mining and Exploration Companies (AMEC) met with Federal Treasury officials last week, as part of the Australian Government’s consultation on changes to capital gains tax (CGT).
AMEC is pushing for an exemption from CGT changes for mineral exploration investors.
In the 2026–27 Commonwealth Budget released earlier in May, the federal government proposed to remove the current 50% CGT discount first introduced in 1999.
The government proposes to reintroduce CGT base indexation and introduce a minimum tax rate of 30%, which applies to real capital gains occurring from 1 July 2027.
As previously reported, what this means is that a higher CGT will be imposed on mineral exploration shareholders.
AMEC Chief Executive Warren Pearce says these changes loom as a “dark shadow” over the investment community.
“If they are to proceed, it could prove devastating for mineral exploration and companies’ ability to raise capital,” Pearce says.
“These are high-risk, high-reward companies searching for the next discovery that could lead to new mines, deliver jobs, royalties, exports, and the minerals Australia and its trading partners need.”
A risk for juniors
AMEC adds that if the reward for investors taking the risk on explorers reduces, then investor appetite will fall — meaning less capital and fewer drilling programs.
Pearce adds that an exemption cannot be limited to technology start-ups or traditional early-stage businesses.
“A junior explorer is a start-up,” he says.
“It raises capital, takes on enormous risk, often has no revenue stream, and employs people. Inevitably, it then either fails or creates enormous value for investors and in turn the nation.”
AMEC also raises an issue with state and territory governments, warning that reduced exploration investment would affect regional economies and future royalty streams.
“We need a timely resolution in order to maintain confidence in the market and provide the confidence to investors that we want their appetite for risk,” Pearce notes.
AMEC is continuing to raise this issue with industry, business leaders, media, and those on both sides of parliament.
The Association of Mining and Exploration Companies is an industry association representing more than 500 member companies across Australia.
Mining.com.au is an official member of AMEC.
Write to Aaliyah Rogan at Mining.com.au
Images: AMEC
