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 with exploration credits capped at a total of $100 million for greenfields minerals expenditure incurred over the three-year period:
- $25 million in 2014–15 (exploration credits to be created and issued in 2015–16)
- $35 million in 2015–16 (exploration credits to be created and issued in 2016–17)
- $40 million in 2016–17 (exploration credits to be created and issued in 2017–18).
Income year |
No. of applications |
Total notified exploration expenditure |
Modulation factor |
Exploration credit cap |
Estimated maximum exploration credits issued |
|---|---|---|---|---|---|
2014–15 |
84 |
$70,323,723 |
1.00 |
$25 million |
$21.1 million |
2015–16 |
54 |
$45,672,570 |
1.00 |
$35 million |
$13.7 million |
2016–17 |
40 |
$44,482,118 |
1.00 |
$40 million |
$13.3 million |