Making the announcement during his second trip to Western Australia in a matter of weeks, Turnbull said the new initiative, which will replace the Exploration Development Incentive, would encourage investment and risk-taking to drive the next wave of discoveries.

The Junior Mineral Exploration Tax Credit (JMETC) would allow the tax losses in greenfield exploration companies to be distributed as a credit to Australian resident shareholders.

“Everything my government is doing is focussed on promoting investment and driving economic activity,” Turnbull said.

“These tax incentives will encourage ‘junior explorers’ to take risks and to have a go at discovering the next large-scale mineral deposit.

“We want to back enterprise. We want to turnaround the greenfields minerals exploration expenditure that have declined by almost 70% over the past five years.”

Only newly issued shares relating to capital raising for investment in new greenfields exploration activity will be eligible for the tax credits.

Tax credits of up to $100 million over four years will be made available from this financial year on a first-in first served basis consistent with arrangements to be administered by the Australian Taxation Office.

Association of Mining and Exploration Companies CEO Simon Bennison described the JMETC as “visionary”.

“The JMETC is a critical investment in Australia`s future, particularly as contemporary research in relation to existing mines indicates that there will be significant reductions in production and government revenue streams as those mines reach the end of their current lives,” he said.

“They need to be replenished by new discoveries as soon as possible.

“Mineral exploration is a long term, high risk activity which needs scarce equity capital in a globally competitive market place.”

The government said the JMETC was developed based on industry feedback, with the previous EDI having a low take-up rate.

“Tax credits under the JMETC will be available to new capital raisings, more akin to the Canadian model,” Bennison said.

“The credit to investors will represent 30% of the eligible greenfield mineral exploration expenditure incurred, and renounced by the company.

“This is an extremely attractive arrangement which should result in more investors entering the equity market.”

Bennison said Turnbull and his government, particularly Finance Minister Mathias Cormann, recognised that the mines of tomorrow needed to be discovered now.

“Successful mineral exploration is needed to drive the development of the mines of tomorrow, create revenue streams and jobs, and be in the national interest,” he said.

“Analysts have projected that employment will decrease in the base and precious metals by up to 75% over the next 15 years if action is not taken now.”

Applications are open until the end of this month for the remaining $40 million available under the existing EDI scheme.