The deduction is limited to so much of the income derived from all sources unless you elect otherwise. If you make this election then the amounts under deducted are carried forward successively in future years until the amount is reduced to nil. When operating a mine site you will have two main types of expenses. These are operating costs and capital expenditure. It is important that you distinguish between the two as the taxation treatment is different.
Operating costs are the daily or periodic costs incurred in running a business.
They have a short life or are immediately used. For example, fuel for a generator. These costs are deducted from profit and loss in the year they are incurred. However, capital expenditure is normally a high cost and the benefit could be spread over several years or the life of the mine. More specifically, the taxation law allows you to claim the following expenditure over the lesser of ten years or the life of the mine.