Investment in mining exploration in Australia has dropped by 27% from June to December 2012, according to a report from the Bureau of Resources and Energy Economics (BREE).
The report comes after the government tightened mining tax rules by lowering the scope of tax deductions available to firms acquiring junior exploration companies in the federal budget, reported The Sydney Morning Herald.
According to the report, investment in 'greenfield' exploration, which is considered to be a high risk process, totalled $264m in December, down 16% from the September quarter, and 27% down from the June quarter.
Investment in comparatively low risk 'brownfield' exploration also dropped 8% in December to $561m, compared to the September quarter; and 21% compared to the June quarter.
Havilah Resources executive director Peter Reeve told The Sydney MorningHerald that changes to the scope of exploration tax deductions have severely affected the small mining companies.
The BREE report also stated that investment in major projects in Australia had reached its long-predicted peak this year.
According to the bureau, 73 major projects, which are together worth $268bn, are in the committed stage in Australia.
However, that total is expected to fall by $8bn next year and another $63bn in 2015, the bureau estimates.
In the last year, mining and energy projects worth nearly A$150bn have been delayed or cancelled in the country due to a rise in investments and drop in commodity prices.
Image: Spending on mining exploration is estimated to have declined further after major cost cuts were announced by mining giants BHP Billiton and Rio Tinto. Photo: dan/FreeDigitalPhotos.net.