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  • 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.
    Last modified: 26 Mar 2018QC 54870