Critical Minerals Production Tax Incentive

About the incentive

The Critical Minerals Production Tax Incentive (CMPTI) will establish and expand critical minerals processing and refining in Australia.

The incentive is part of the Australian Government’s Future Made in Australia plan. It aims to support companies processing and refining minerals on Australia's Critical Minerals List.

Our department will administer the incentive in partnership with the Australian Taxation Office (ATO).

We are currently developing the CMPTI. The Australian Government will consult on rules to support it and will publish more information over time.

How the incentive works

The CMPTI will be available from 1 July 2027 to 30 June 2040.

Key benefits:

• It will provide a 10% tax offset on eligible Australian processing expenditure for critical minerals processed and refined during the period.
• It allows for up to 10 years per project.
• The offset is uncapped and refundable. If your tax liability is reduced to zero, you may get a refund on the remainder.

What’s eligible

Eligibility criteria are set out in Division 419 of the Income Tax Assessment Act 1997. We’ve summarised the key points below. See the explanatory memorandum for guidance.

Company

Your company can claim the tax offset for an income year if it:

• is a constitutional corporation carrying out one or more registered CMPTI processing activities
• incurs expenditure carrying out those activities
• isn’t an exempt entity
• satisfies CMPTI community benefit rules.

Your company must also:

• be an Australia tax resident or a foreign resident carrying out the processing activity through a permanent location in Australia
• have an Australian Business Number for the income year.

Note that Treasury will develop CMPTI community benefit rules following consultation. We expect these to be consistent with community benefits principles under the Future Made in Australia Act 2024.

Processing activities

Your processing activity must involve one or more of the critical minerals in Division 419 of the Income Tax Assessment Act 1997.

Please note:

• The government can add or remove eligible minerals from the list in the Act, whether the mineral appears on Australia’s Critical Minerals List or not.
• New additions to Australia’s Critical Minerals List won’t automatically be eligible.
• If the government removes a critical mineral from Australia’s Critical Minerals List, it won’t automatically be ineligible.
• Minerals on Australia’s Strategic Materials List aren’t eligible.

Your processing activities must involve substantially transforming a feedstock containing a critical mineral. This means using extractive metallurgical processing to turn it into a purer or more refined form of critical mineral chemically distinct from the feedstock. Regulations will outline some additional eligible processing activities.

Eligible feedstocks may include:

• ores or mineral concentrates
• tailings
• waste streams containing critical minerals like lithium battery black mass.

The feedstock doesn’t have to come from an Australian source.

Ineligible processing activities include:

• mining
• beneficiation
• manufacturing.

The incentive is not restricted to new facilities. 

Processing expenditure

You can claim direct critical mineral processing and refining expenditure. For example:

• reagents
• labour
• utilities
• waste treatment and disposal.

If your company makes and sells a non-critical mineral byproduct, you must apportion the expenditure between the non-critical output, or byproduct, and the critical mineral output. You can only claim the expenditure relating to the critical mineral output.

Ineligible expenditure includes:

• financing costs
• capital expenditure, including sustaining capital expenditure
• depreciation
• feedstock costs.

Fees and reporting costs

We will not charge CMPTI application or registration fees.

As company structures and overheads differ, we can’t estimate CMPTI compliance and reporting costs for every scenario.

How the co-administration will work

Our role

Our Secretary will register the CMPTI processing activities and our department will:

• receive and assess applications
• receive and review annual reports
• register transfers, for example when companies sell processing facilities
• vary registrations
• cancel registrations, for example if a company gets a registration through fraud
• review registration decisions
• manage CMPTI processing activity eligibility criteria
• manage disputes around CMPTI processing activity eligibility.

We will give the ATO:

• details of a company’s registration, including transfers, variations and cancellations
• annual reports.

This will mean you don’t have to give the same information to our department and the ATO.

ATO’s role

The ATO will:

• process your company’s tax return, including CMPTI claims
• issue any refunds that your company may be entitled to
• have the final say on what CMPTI expenditure is eligible
• manage any disputes around eligible CMPTI expenditure.

Disclaimer

We have published this information to help companies understand the eligibility criteria and administrative process for the CMPTI. This information is not legally binding and is intended to provide general assistance only. It’s based on information currently available.

The CMPTI is in the early stages of program development and program elements may change. We will finalise the program guidelines before it starts on 1 July 2027. These guidelines will become the key source for determining eligibility and administrative process.