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Greenfields minerals exploration expenditure

How to work out your greenfields minerals exploration expenditure for an income year.

Last updated 25 March 2018

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.