Fed: Native title costs should be tax deductible: ABARE

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Fed: Native title costs should be tax deductible: ABARE

CANBERRA, Dec 17 AAP - Native title costs should be made tax deductible to arrest asharp fall in Australian mining exploration, the nation's chief commodity forecaster saidtoday.

In a report on mineral exploration activity, the Australian Bureau of Agriculturaland Resource Economics (ABARE) said spending on exploration had fallen almost 50 per centsince 1996/97, to $623 million from $1.2 billion.

Exploration has now fallen to levels not seen since the late 1970s.

ABARE said one of the main reasons for the fall was the uncertainty caused by nativetitle claims over prime exploration areas.

It said although much of this had now been cleared up, there was still a considerablelag in exploration while mining companies were carrying significant costs.

There needed to be a tax incentive for mining firms to help them ramp-up their levelsof exploration.

"The lack of full exploration loss offset in the industry increases industry costsand reduces mineral exploration activity," it said.

"Native title costs are an unavoidable expense and, as a consequence, should be deductibletogether with other exploration costs."

ABARE said gold exploration had slumped almost 60 per cent in recent years, leadingto a 14 per cent decline in gold production.

Australia is the world's third largest gold producer, while the precious metal is thenation's third largest exporter earner.

Gold accounts for more than half of Australian mineral exploration, and is responsiblefor 35 per cent of all mineral ore jobs.

ABARE warned a further 20 per cent cut in exploration in the next four years wouldslice another 6.5 per cent from gold production.

AAP sw/kjp/cd/bwl

KEYWORD: MINING