Minerals Council of Australia urges retention of CGT discount for junior explorers

The Minerals Council of Australia (MCA) is urging the federal government to maintain the 50% capital gains tax (CGT) discount for junior explorers to protect the nation’s critical minerals sector.

In a submission to the Senate Economics Legislation Committee, the MCA warned that proposed CGT changes could reduce investor returns by approximately 19%. The council noted that retail investors in junior explorers often face high failure rates and receive no income for many years, making them entirely dependent on capital gains if a discovery is made.

The MCA highlighted that greenfields exploration spending—searching for new mineral deposits in undeveloped areas—is already declining as a share of total exploration spending. The council argued that increasing taxes on these companies could undermine the development of strategic mineral supply chains at a time of increasing global demand.