Exploration Development Incentive

The Exploration Development Incentive (EDI) encourages shareholder investment in small exploration companies undertaking greenfields mineral exploration in Australia. It provides economic incentive to invest in the Australian mining sector. This benefits the Australian economy, enabling the mining sector to make new mineral discoveries.

The EDI enables eligible exploration companies to create exploration credits by giving up a portion of their tax losses from greenfields minerals expenditure and distributing these exploration credits to equity shareholders.

Australian resident shareholders that are issued with an exploration credit will be entitled to a refundable tax offset or additional franking credits. The exploration company’s carry forward losses are reduced proportionately to reflect the amount of exploration credits created.

The incentive applies from the 2014–15 income year. It is capped at a total of $100 million for greenfields minerals expenditure incurred over the three-year period:

  • $25 million in 2014–15
  • $35 million in 2015–16
  • $40 million in 2016–17.
Information about the EDI for the relevant income tax years

Income year

No. of applications

Total notified exploration expenditure

Modulation factor

Exploration credit cap

Estimated maximum exploration credits issued

2014-2015

84

$70,323,723

1.00

$25 million

$21.1 million

2015-2016

*

*

*

$35 million

*

2016-2017

*

*

*

$40 million

*

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Last modified: 16 Feb 2016QC 44585