Taxes Consolidation Act 1997 section 670

Mine development allowance

Section 670 provides for mine development allowances in respect of capital expenditure on developing a mine, constructing mining works, and exploring for or testing mineral deposits.

• Capital expenditure on mine development, mineral exploration and construction of mining works qualifies for a mine development allowance, but expenditure on site acquisition, rights over deposits or processing works does not
• The allowance is calculated on a straight-line basis over the estimated life of the deposits (maximum 20 years), based on the difference between qualifying expenditure and the estimated residual value of the assets
• When the mine ceases to operate or a qualifying asset is sold, the allowances are reviewed and adjusted, with any shortfall given as a further allowance and any excess treated as a trading receipt
• A successor who takes over the trade of working the mine may continue to claim the residue of allowances that the original trader would have been entitled to