R&D Tax Incentive for Mining and Resources Companies
Mining companies invest heavily in extraction technology, ore processing innovation, and geoscience research. Significant portions of that work can qualify for the RDTI. The challenge is that the sector carries a hard-line statutory exclusion on exploration activities, and the boundary between eligible R&D and excluded exploration is one of the most contested areas in Australian R&D tax compliance.
Does Mining and Resources R&D Qualify for the RDTI?
Yes, but only for specific categories of work, and not for the exploration activities that make up a large part of many mining companies' expenditure.
The R&D Tax Incentive applies to mining and resources companies where activities meet the three core criteria: genuine technical uncertainty, systematic experimentation, and the generation of new knowledge. Mining companies regularly conduct work that satisfies these criteria, particularly in extraction technology development, mineral processing innovation, mine automation, and geoscience research that goes beyond deposit characterisation.
The critical distinction in this sector is between two types of uncertainty that are easy to conflate. Geological uncertainty (whether a deposit exists, how large it is, what grade it carries) is exploration uncertainty and is excluded by statute. Technical uncertainty (whether a new extraction method will achieve target recovery, whether a novel processing flowsheet will perform at scale, whether an automation system will operate reliably under specific mine conditions) is what the RDTI is designed for. A mining company can have both types of uncertainty operating simultaneously, but only technical uncertainty in the R&D sense opens the door to a claim.
The three RDTI tests apply in mining as in any other sector:
- Technical uncertainty: The outcome cannot be known or determined in advance, even by a competent professional in the relevant field, whether that is a metallurgist, mining engineer, or geoscientist at the frontier of their discipline
- Systematic experimentation: Work must follow a hypothesis, test, observe, evaluate cycle. Routine drilling programs and standard ore characterisation do not satisfy this test, even when the results are new to your company
- New knowledge: The R&D must generate knowledge not already available publicly, not just knowledge that is new to this project or new to your operation
The full RDTI eligibility framework applies equally to mining. Understanding the competent professional test in a mining context is especially important, because the standard differs significantly between a field geologist, a process metallurgist, and a mining automation engineer.
Mining R&D: What Qualifies and What Doesn't
The line between eligible R&D and excluded exploration or routine operations is drawn at the purpose and nature of the uncertainty, not the technical sophistication of the work. Highly technical exploration remains excluded. Relatively contained processing trials with genuinely uncertain outcomes can qualify. The examples below are drawn from common mining R&D scenarios.
✅ LIKELY QUALIFIES:
- Developing a novel flotation circuit configuration where the relationship between reagent chemistry, pulp density, and target mineral recovery is uncertain for a specific ore type not previously processed at your operation
- Experimental leaching trials to determine whether a new lixiviant or modified leach cycle can improve gold or base metal recovery from refractory ores, where performance outcomes are genuinely unknown before testing
- Developing and testing new selective extraction or ore sorting technology where classification accuracy and throughput performance under your specific ore characteristics cannot be determined from existing literature
- Designing and trialling a new geometallurgical model for a complex polymetallic deposit where the processing response to ore variability is unknown and requires experimental determination across multiple ore domains
- Developing instrumentation or monitoring systems for underground operations, such as real-time gas detection arrays or ground movement sensing, where the technical feasibility of achieving required precision in your specific geotechnical environment is uncertain
- Research into in-situ leaching or solution mining methods for unconventional ore bodies where the hydrogeological and geochemical interaction between lixiviant and host rock is technically uncertain and no established solution exists
❌ DOES NOT QUALIFY:
- Exploration drilling, including diamond core drilling and reverse circulation programs, directed at discovering, locating, or delineating mineral deposits, regardless of the drilling method used or the geological complexity involved
- Routine ore characterisation, standard washability testing, proximate and ultimate coal analysis, and conventional assaying conducted to characterise a known or potential deposit
- Geochemical surveys, geophysical surveys, and geological mapping programs whose primary purpose is identifying or defining mineralisation
- Feasibility studies that apply established engineering and economic methods to evaluate a known deposit, even when the conclusions are novel for that specific project
- Mine modelling and computer simulation work that is not associated with physical experimental trials, where modelling alone is used to make operational or design decisions
- Installation and commissioning of vendor-supplied processing equipment following manufacturer specifications, including standard flotation cells, crushers, or mill installations
For the full rules on how eligible expenditure is calculated, including staff costs, contractor payments, and materials consumed in trials, see the R&D Tax Incentive overview.
What's Different About Mining RDTI Claims
Mining R&D claims involve a set of challenges and risks that are specific to this sector. The statutory exploration exclusion, the geological versus technical uncertainty distinction, and the ATO's documented scrutiny focus on mining make this one of the more technically demanding areas of RDTI compliance.
The statutory exploration exclusion
The RDTI legislation explicitly excludes activities whose results are used for discovering, locating, or determining the size or quality of a mineral deposit. This is a hard statutory exclusion, not a discretionary one. It applies even when exploration activities involve innovative techniques, novel equipment, or genuine uncertainty about what will be found. The test is not whether the method is novel, but whether the purpose is to discover or delineate a deposit. Mining companies that attempt to package exploration expenditure as R&D on the basis of technical innovation face disallowance of the entire activity, not just the ineligible portion. The boundary must be drawn before lodgement, not after review.
Geological uncertainty is not technical uncertainty
This distinction is the single most important concept for mining R&D claims, and the most commonly misunderstood. When a mining company does not know what recovery it will achieve from a new ore domain, there are two possible reasons: the ore characteristics are unknown (geological uncertainty, excluded) or the processing method's performance under known ore characteristics cannot be determined (technical uncertainty, potentially eligible). Claims that conflate these two types of uncertainty are vulnerable to disallowance. Every mining R&D activity must be analysed to confirm that the uncertainty being resolved is technical in nature, and that geological unknowns have been separated from the claimed scope.
Mine modelling without physical trials does not qualify
The ATO has confirmed through review activity and guidance that computer modelling and simulation of mining operations does not constitute R&D unless the modelling is directly associated with a physical experimental program. A company that uses modelling to design a new extraction approach but does not conduct physical trials cannot register that work as a core R&D activity. The physical experimentation requirement applies even where the modelling work is technically sophisticated. Where modelling is used to design and refine experiments rather than replace them, it can form part of a broader eligible activity.
ATO compliance focus on mining
The ATO and AusIndustry have both publicly identified the mining and resources sector as a compliance priority area. Common issues flagged in reviews include overly broad project scopes that mix routine operational costs with genuine R&D, insufficient contemporaneous documentation showing that technical uncertainty existed at the time work commenced, and claims that describe activities in project or commercial terms rather than technical terms. Mining claims described as "process improvement program" or "feasibility investigation" are routinely challenged. Claims that articulate specific technical uncertainties, document experimental approaches, and provide evidence of systematic evaluation pass review.
Documentation specific to mining operations
Mining R&D documentation has distinct characteristics. Pilot plant records, metallurgical test reports, drill core analysis from processing trials (as distinct from exploration drilling), laboratory assay results from experimental batches, flowsheet development reports, and time records distinguishing R&D activities from production and exploration functions are all relevant. Cost allocation between R&D, exploration, and routine operations is heavily scrutinised in mining claims and must be supported by a defensible methodology established before lodgement, not reconstructed retrospectively.
How We Help Mining and Resources Companies
Exploration Boundary Analysis
We work through the statutory exploration exclusion with you before any claim proceeds. This means systematically reviewing each planned activity to determine whether the uncertainty being resolved is technical or geological in nature, and ensuring that exploration expenditure is cleanly separated from genuine R&D costs. Getting this boundary wrong is the single most common reason mining claims are disallowed in full.
Metallurgical and Processing R&D Scoping
Processing and extraction innovation is where mining companies have the strongest basis for RDTI claims. We work with your metallurgical and engineering teams to identify which experimental programs involve genuine technical uncertainty, frame each activity in the language AusIndustry expects, and structure the claim around physical trial evidence rather than modelling or desktop studies alone.
Cost Allocation and Expenditure Mapping
Mining operations run exploration, production, and R&D activities simultaneously, often with shared equipment, personnel, and facilities. We develop cost allocation methodologies that separate R&D expenditure from excluded exploration and routine operational costs, ensuring the financial claim is defensible and correctly scoped. This is essential before lodgement, not after a review commences.
Audit-Ready Claims
Mining R&D claims attract a higher rate of ATO and AusIndustry review than most other sectors. We build every claim assuming scrutiny will occur: activity descriptions are technically precise, the exploration exclusion is explicitly addressed, expenditure allocations are documented, and supporting evidence from test reports, pilot plant records, and experimental logs is pre-assembled. If a review does occur, we manage the response. See our review defence service.
Mining RDTI: Frequently Asked Questions
Can we claim R&D for developing a new method to extract ore from a deeper zone?
Potentially, yes. If the focus is overcoming genuine technical challenges in the extraction method itself, such as equipment design, novel process engineering, or uncertain performance outcomes, the activity may qualify. However, if the primary purpose is determining whether the deeper zone is economically viable or delineating the deposit's extent, that is exploration and is explicitly excluded. The distinction turns on whether you are conducting R&D to overcome a technical problem, or exploration to discover and characterise a resource. See the full eligibility guide for the core activity criteria.
Does our geometallurgical testwork qualify as R&D?
Only if there is genuine technical uncertainty about the relationship between ore characteristics and processing outcomes. Applying established testing methods to characterise an orebody, even for a deposit that has not been tested before, is routine testwork. If you are experimentally developing a new process optimisation model where the outcome cannot be determined in advance and you conduct physical trials to validate it, this can qualify. The ATO expects clear evidence of technical innovation beyond the application of known methods to a new ore body. See the RDTI overview for expenditure and entity rules.
We are investing in mine automation and AI-based monitoring systems. What qualifies?
Development of automation and monitoring systems qualifies where genuine technical uncertainty exists about whether the system will perform in your specific mining environment. This includes developing new sensors with uncertain feasibility, designing control algorithms with unknown performance characteristics, and building real-time monitoring systems for challenges unique to your operation. Deploying vendor-supplied automation systems following specifications does not qualify. Clear contemporaneous documentation of the technical uncertainties being resolved is essential for these claims to hold up under review.
Our exploration team did some experimental drilling. Can we claim part of the exploration budget?
Almost certainly not. The RDTI legislation explicitly excludes activities whose results are used for discovering, locating, or determining the extent or quality of mineral deposits. This applies even when the drilling involves innovative techniques. Once activities are structured as exploration, they remain ineligible regardless of the methods used. A narrow exception applies where a completely standalone technology development program is separate from the exploration effort, with primary purpose of developing a technique for broader commercial use rather than finding or delineating a specific deposit. This requires clear separation: different project scope, separate documentation, and a primary purpose of technology development rather than deposit discovery.
Mining R&D Claims Built to Withstand Scrutiny
The exploration exclusion is real. ATO scrutiny in the mining sector is real. But so is the genuine R&D your technical teams conduct on extraction, processing, and mine systems. If you want to know what qualifies in your operation and how to claim it without the risk of a challenge, start with a structured assessment.