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.