Taxation is a major factor in evaluating mining project developments. The availability or otherwise of effective tax relief for project expenditures can have a crucial bearing on the decision to proceed with a project. The special position of the mining industry is recognised within the Income Tax Assessment Act (the "Tax Act") by special legislation, namely Divisions 10, 1OAAA and 10AA. The legislation both extends the scope of items which are eligible for deduction and affects the timing of deductions. Generally, the legislation separates expenditure into 3 categories: 1. Expenditure on exploration 2. Capital expenditure on the development and the running of the mine; and 3. Facilities used in the transport of minerals. Companies evaluating a project should carefully analyse their proposed expenditures, allocating them between these categories so as to identify potentially non-deductible expenditures and to determine the period over which tax relief will be Obtained.