The proposal would introduce a new 40% Coal and mining tax (CMT) on the super profits of individual Australian mining projects, where the super profits would be calculated at the project level as revenue less expenses. 

• Project expenses would comprise of:
  • general project operating expenses
  • a deduction that recognises the book value of the project’s capital expenditure base just before the introduction of CMT.
    • The deduction would be equal to the project’s starting capital base depreciated on a straight-line basis over the first five years of the proposal (Opening Capex).
    • The starting capital base amount would be the book value of all capital expenditure as of 1 July 2024 uplifted each year at the 10-year government bond rate plus 2%. The starting capital base amount would step down over the first five years of the proposal as the depreciation deduction amounts are subtracted. 
    • Any of the unused Opening Capex deduction in any of those first 5 years is carried forward and uplifted at the 10-year government bond rate plus 2%, and used in the following year.
• Project expenses would not be transferrable between projects owned by the same company.
• Royalty expenses and decommissioning costs would not be deductible against the CMT.

The mining super profits tax would be deductible for company tax purposes but not frankable for personal income tax.

The proposal includes a CMT on coal and other specified mining projects (iron ore, metallurgical coal, thermal coal, gold, alumina, and copper ore). Other mining would be excluded.

The proposal would have effect from 1 July 2025.