Greenfields minerals exploration expenditure

Your greenfields minerals exploration expenditure for an income year will be the sum of the amounts you can deduct in that income year for:

• minerals exploration and prospecting
• the decline in value of a depreciating asset that is immediately deductible on the basis it was first used for exploration or prospecting.

Greenfields minerals expenditure does not include deductions related to:

• the exploration for petroleum or oil shale
• feasibility studies to evaluate the economic feasibility of mining a discovered resource.

Minerals exploration or prospecting for the purposes of the JMEI must be in an area:

• that is land within Australia
• over which the entity holds a mining, quarrying or prospecting right or interest, or is the transferee under a farm-in farm-out arrangement
• that has not been identified as containing a mineral resource that is at least inferred in a JORC CodeExternal Link report or other prescribed document.

What is exploration or prospecting for minerals?

For the purposes of the JMEI, exploration and prospecting will include:

• the ordinary, natural meaning of exploration and prospecting
• the matters expressly identified in subsection 40-730(4) of the Income Tax Assessment Act 1997, other than expenditure on studies to evaluate the economic feasibility of mining a discovered resource, as these activities are specifically excluded from greenfields minerals expenditure
• activities so closely or directly linked with exploration or prospecting for minerals that they are reasonably considered to be part of it.

Examples of exploration expenditure include:

• environmental or heritage protection studies undertaken as preparation for, or part of, an exploration program
• the costs of marking out an exploration area with posts, such as pegging
• rent paid to a government on claims.