Australia’s mining sector is facing a defining decade. Declining ore grades, mounting decarbonisation pressure, and the global race for critical minerals are pushing companies to innovate at pace. Yet pilot plants, electrification trials, and novel processing methods demand upfront capital—often before traditional funding cycles align.
The numbers tell the story. Mining R&D expenditure in Australia climbed to $1.22 billion in 2023–24, up from $886 million just two years earlier, according to the Australian Bureau of Statistics. That’s a 38% jump in R&D investment. This surge reflects the resources sector’s commitment to experimental work that solves real technical challenges: low-carbon steelmaking, battery-electric haulage, advanced ore sorting, and tailings reprocessing.
But here’s where many mining companies trip up: not all innovation qualifies as eligible research and development R&D under Australia’s R&D Tax Incentive. Understanding what counts—and what doesn’t—is critical to building a compliant claim and accessing the funding that supports your work.
For many companies in the Australian industry, the R&D Tax Incentive is a cornerstone of innovation funding. However, the offset arrives only after you lodge your tax return—sometimes 12 to 18 months after the spend occurs. R&D finance bridges that gap, providing early access to your expected refund so pilots keep moving, equipment gets ordered, and specialist engineers stay on payroll.
This guide explains what counts as eligible R&D in the mining industry, why the sector’s spending is accelerating, and how financing helps mining teams fund pilots and scale innovation without waiting for the next budget cycle.
The Four Criteria That Define Eligible Mining R&D
Under Australia’s R&D Tax Incentive, eligible R&D must be experimental, address technical uncertainty, follow a systematic plan, and aim to generate new knowledge. The program applies across all sectors, including mining—but with sector-specific nuances that matter.
Think of it this way: if you already know the outcome, it’s not R&D. If you’re testing something new and the result is genuinely uncertain, you’re likely in the right territory.
The keyword here is uncertainty. You’re not just doing something new to your business. You’re doing something where the technical outcome genuinely can’t be known in advance—even by an expert in the field. That’s the threshold that separates routine innovation from eligible R&D activities.
Core R&D activities that often qualify in mining
Process innovation and flowsheet development
Pilot-scale testing of new leaching, flotation, or ore-sorting methods where outcomes are genuinely uncertain. CSIRO’s sensing and ore-sorting work illustrates this well: they’re developing magnetic resonance and X-ray techniques to analyse mineral composition in real time. It’s experimental. It’s uncertain. It qualifies.
When you’re adapting a known process to a complex ore body and you genuinely don’t know whether it will work, that’s mining R&D. When you’re testing new reagent combinations or novel separation techniques, that’s R&D. When you’re building a pilot plant to prove a hypothesis about mineral recovery, that’s R&D. The common thread? You’re conducting experiments to resolve technical questions that don’t have known answers.
Decarbonisation pilots
Adapting or inventing technology for mining contexts—hydrogen or electric smelting pilots for low-carbon iron, battery-electric haulage trials where performance is uncertain in site conditions. Rio Tinto’s BioIron R&D facility in Western Australia is testing a microwave-based process to produce low-carbon iron. BHP and Rio Tinto are collaborating on battery-electric haul truck trials in the Pilbara. Both involve real technical uncertainty about how these systems will perform at scale in Australian mining conditions.
The decarbonisation challenge is forcing mining companies into genuinely experimental territory. Battery performance in extreme heat. Hydrogen fuel cells in remote locations. Electric smelting at a commercial scale. These aren’t off-the-shelf solutions. They’re R&D. And the stakes couldn’t be higher. This is a long-term R&D investment that will reshape how the industry operates.
Automation, sensing, and data-driven innovation
Developing algorithms, controls, or instruments that must be experimentally validated in mining environments. This includes real-time sensing systems, autonomous equipment control, and predictive maintenance models where the technical approach is unproven. You’re not just installing off-the-shelf software. You’re building something new.
If you’re developing custom machine learning models to predict equipment failure, that’s likely R&D. If you’re building sensor arrays to detect ore grade in real time and the technical approach hasn’t been proven, that’s R&D. If you’re coding new control algorithms for autonomous haulage that require testing and refinement, that’s R&D. The key is whether you’re creating new technical knowledge through systematic experimentation.
Tailings, water, and waste R&D
Novel tailings consolidation, mineral carbonation, or critical-minerals recovery from mine waste, where the underlying science is uncertain. CSIRO’s work on electrochemical mineral carbonation for sustainable mining demonstrates the experimental nature of this research. If you’re trying to extract value from waste streams using methods that haven’t been proven, that’s R&D.
Tailings management is becoming a rich source of R&D activities. Dry stacking methods for specific ore types. Chemical treatments to stabilise tailings faster. Extracting critical minerals from historical tailings. All of these involve genuine technical uncertainty. And as environmental social expectations tighten, the innovation pressure only increases.
What mining companies commonly claim but shouldn’t
This is where mining companies often get tripped up. The R&DTI has specific exclusions that matter in the resources sector.
Prospecting, exploring, or drilling for minerals is specifically excluded as core R&D activity. Routine exploratory drilling, resource definition, and standard geophysical surveys generally don’t qualify—even when they involve sophisticated techniques. This is one of the most common misconceptions in mining R&D. The legislation is explicit on this point.
Let’s be clear on what isn’t eligible:
- Exploration drilling
- Resource modelling
- Standard geophysical surveys
Even if they’re complex, expensive, and technically demanding, they’re excluded by the legislation.
However—and this is important—if you’re developing a new geophysical technique or a novel drilling method where the approach itself is experimental, that development work may qualify. The line is subtle but critical. It’s not about what you’re looking for. It’s about whether you’re creating new technical knowledge in how you look.
Quality control and routine adaptation
Standard testing, monitoring, and adapting existing processes without genuine technical uncertainty fall outside the R&DTI. If you’re applying a known method to a new site with predictable results, it likely won’t meet the experimental threshold.
Installing proven processing equipment at a new site? Not R&D. Routine metallurgical testing using standard methods? Not R&D. Optimising a well-understood process through incremental tweaks? Not R&D. These activities might be essential to your operations, but they don’t create new technical knowledge.
Market research and feasibility studies
Commercial analysis, stakeholder consultation, and economic modelling aren’t eligible, even when they support R&D projects. The incentive rewards technical experimentation, not commercial planning.
Feasibility studies, community engagement, permitting work, and commercial negotiations all fall outside the R&DTI scope. They might be essential to your project, but they’re not eligible for R&D. The program supports technical risk, not commercial risk.
A quick note: Rocking Horse is not a tax adviser. Eligibility should be assessed against official ATO and DISR guidance. When in doubt, seek specialist advice before claiming.
Three Forces Driving Mining R&D Investment in Australia
Three forces are reshaping R&D in the mining industry, and they’re all accelerating. Understanding these drivers helps explain why the sector’s R&D investment is climbing so rapidly.
Productivity and orebody complexity
As ore grades decline and deposits become more geologically complex, companies need novel sensing, sorting, and processing methods to maintain competitiveness. Advanced automation and real-time mineral analysis are no longer optional—they’re essential to extracting value from lower-grade resources. The easy ore is gone. What’s left requires innovation.
The technical challenge is real: how do you economically process ore that would have been waste ten years ago? The answer usually involves R&D, and the companies that solve these problems first gain significant competitive advantages.
Decarbonisation and regulatory pressure
Mining companies face intensifying expectations to reduce Scope 1 and 2 emissions. Decarbonising mine haulage, switching to electric or hydrogen-powered equipment, and developing low-carbon ironmaking processes all require substantial experimentation. Pilots and demonstration plants are the only way to prove performance at scale before committing billions in capital. The stakes are high. The technical challenges are real.
Every major miner has announced net-zero targets. Achieving them requires technologies that don’t yet exist at a commercial scale. That’s R&D. And the timeline to deliver these solutions is compressing rapidly. These aren’t short-term fixes. They’re long-term commitments to reshaping the industry.
Critical minerals opportunity and supply chains
Australia’s Critical Minerals Strategy 2023–2030 positions the country as a key supplier of minerals essential to the energy transition—lithium, rare earths, cobalt, and graphite. The new Critical Minerals Production Tax Incentive (CMPTI), which passed Parliament in 2025, provides a 10% refundable tax offset for eligible processing and refining from 2027–28. Together with the R&DTI, these policies create a strong innovation incentive for midstream processing R&D. The opportunity is enormous. The window is now.
Critical minerals aren’t just about extraction. They’re about building resilient supply chains that process and refine materials domestically. That requires R&D investment in processing technologies that don’t yet exist at a commercial scale in Australia.
The Real Numbers: How Much Australia Invests in Mining R&D
Mining R&D expenditure reached $1.22 billion in 2023–24, according to the Australian Bureau of Statistics—a 38% increase from $886 million in 2021–22. This growth outpaces many other sectors and reflects the industry’s focus on decarbonisation, automation, and processing innovation.
To put this in context, total business R&D across all Australian industries was $24.41 billion in 2023–24. Mining represents roughly 5% of national business R&D investment, but the sector’s capital intensity means even modest percentage shifts translate into significant project funding.
Major miners dominate the spend. Rio Tinto, BHP, and Fortescue Metals Group collectively invest hundreds of millions annually in R&D, with much of it directed toward pilot facilities, fleet electrification, and low-carbon steelmaking. These aren’t small bets. They’re long-term commitments to fundamentally changing how mining works.
The trend is clear: mining R&D is growing, and it’s concentrating in areas where technical uncertainty is highest—decarbonisation, automation, and critical minerals processing. That concentration matters. It signals where the industry in Australia sees both the greatest technical challenges and the greatest opportunities.
Where Mining R&D Is Happening Right Now
Several themes are emerging clearly across the resources sector. These aren’t future possibilities. They’re active projects with real budgets, real teams, and real technical challenges. Let’s look at what’s actually happening on the ground.
Low-carbon steelmaking pilots reshaping the industry
Rio Tinto’s BioIron R&D facility
Rio Tinto is developing a research facility in Rockingham, south of Perth, to test its BioIron process—a microwave-based method for producing low-carbon iron using renewable energy. The pilot aims to demonstrate technical feasibility before scaling to commercial production. If it works, it could transform the carbon footprint of Australian iron ore.
This is textbook eligible R&D: experimental method, uncertain outcome, systematic approach, aiming to generate new knowledge about industrial-scale microwave processing of iron ore. The technical risk is considerable. So is the potential upside.
NeoSmelt electric smelting furnace study
BlueScope, BHP, and Rio Tinto are collaborating on NeoSmelt, studying the feasibility of an electric smelting furnace pilot plant in Kwinana. The Federal Government announced support in early 2025, with two new participants joining the consortium. The project targets near-zero emissions in primary steelmaking—a historically carbon-intensive process. This is collaborative R&D at scale.
Battery-electric fleets and the decarbonisation challenge
BHP and Rio Tinto battery-electric haul truck trials
The two majors are running collaborative trials in the Pilbara with Caterpillar and Komatsu, testing battery-electric haul trucks in real mine conditions. Performance metrics—cycle times, battery longevity, charging infrastructure—remain uncertain, making this experimental work squarely eligible under the R&DTI. The Pilbara’s heat and dust create unique challenges. The trials will determine whether battery-electric vehicles can replace diesel at scale.
Notice what makes this eligible: they don’t know whether the batteries will perform adequately in 45-degree heat. They don’t know whether the charging infrastructure will support production cycles. They’re testing to find out. That’s the essence of R&D.
Fortescue’s green equipment partnership with Liebherr
Fortescue signed a US$2.8 billion partnership with Liebherr to deploy a large battery-electric fleet, including haul trucks, excavators, and dozers. The rollout involves significant R&D to integrate charging systems, optimise energy management, and validate performance in remote, high-temperature environments. It’s the kind of commitment that reshapes an entire operation.
Advanced sensing technologies for ore sorting
CSIRO’s real-time sensing and MR-based ore sorting remain a hallmark of Australian mining R&D. These systems use magnetic resonance and X-ray analysis to classify ore before it enters the mill, reducing energy consumption and tailings volumes. Several mining companies are piloting or adapting these technologies, often with CSIRO collaboration. The potential savings—energy, water, waste—are substantial.
When mining companies adapt these systems to their specific ore types and operating conditions, the adaptation work often qualifies as R&D. You’re not just buying the equipment. You’re experimentally validating whether it works for your ore body. And that validation process involves genuine technical uncertainty.
The critical minerals processing ecosystem
The Australian Critical Minerals Research and Development Hub coordinates R&D across CSIRO, ANSTO, and Geoscience Australia. The Hub focuses on midstream processing—extraction, refining, and value-adding—where Australia has historically underinvested. Collaborative projects funded through the Hub often qualify for R&DTI support when companies incur eligible experimental expenditure. This is where policy meets practice in the critical minerals supply chain.
Every Funding Source Available for Mining R&D
Mining R&D projects can draw on multiple funding sources, often layered together. Understanding how they fit is key to building a sustainable innovation program. Most mining companies combine government incentives, grants, and private financing to support their R&D work.
R&D Tax Incentive (R&DTI)
The R&DTI provides tax offsets for eligible R&D expenditure. Current rates (post-1 July 2021):
- Refundable offset for smaller entities (aggregated turnover below $20m): company tax rate plus 18.5 percentage points—up to 43.5% for companies on the 25% tax rate.
- Non-refundable offset for larger entities: 8.5% premium (for R&D intensity below 2%) or 16.5% premium (for R&D intensity of 2% or more) above the company tax rate.
The offset is claimed after year-end when you lodge your tax return, meaning cash arrives 12 to 18 months after you incur the spend. That timing gap is where R&D finance comes in. It’s a short-term solution to a long-term funding challenge.
Cooperative Research Centres Projects (CRC-P) grants
CRC-P grants fund short-term, industry-led R&D projects (typically 1–3 years) with research partners. Recent rounds allocated up to $3 million per project. Mining companies regularly secure CRC-P funding for applied pilots in areas like tailings management, sensor development, and processing innovation. The application process is competitive, but the co-funding model works well for collaborative projects.
CRC for Transformations in Mining Economies (CRC TiME)
CRC TiME focuses on mine closure, post-mining transitions, and legacy site remediation. While its scope is narrower than general processing R&D, companies working on closure innovation can access collaborative research funding and partnerships. This is a growing area as environmental social expectations rise.
State programs supporting the resources sector
MRIWA (Western Australia)
The Minerals Research Institute of Western Australia offers research grants and a dedicated METS (Mining Equipment, Technology and Services) innovation stream. Funding supports collaborative projects between industry and research institutions. If you’re operating in WA, MRIWA should be on your radar.
NSW Critical Minerals programs
NSW runs exploration incentive schemes and critical minerals strategies that sometimes include R&D components. While primarily focused on exploration, some processing and beneficiation projects may qualify for co-funding.
The Critical Minerals Production Tax Incentive (CMPTI)
The CMPTI provides a 10% refundable tax offset for eligible critical minerals processing and refining from 2027–28. While distinct from the R&DTI, it signals government support for innovation in midstream processing—often the same projects that involve R&D work. The two incentives can complement each other, particularly for companies building long-term processing capabilities in critical minerals supply chains.
How R&D Finance Solves the Cash Flow Gap
R&D finance provides early access to your expected R&D Tax Incentive refund, based on the eligible expenditure you’ve already incurred in the current financial year. You don’t need to complete your R&DTI claim to apply—just evidence of qualifying R&D activities and an assessment of your expected offset.
Here’s how it works in practice. And why it matters for mining companies managing complex, capital-intensive pilots.
Four ways mining companies use R&D finance
Pilot plant deposits and long-lead equipment
Ordering custom processing equipment, sensors, or instrumentation often requires deposits months before installation. R&D finance lets you secure those slots without waiting for next quarter’s budget allocation. Lead times matter. Missing a manufacturing window can push your pilot back six months. That’s not just a delay—it’s lost momentum.
Bridging payroll during trial windows
Bringing on specialist engineers, metallurgists, or data scientists for a 6–12 month pilot can strain operational cash flow. Finance gives you certainty that payroll is covered while trials run. You need the right people at the right time. Finance helps you secure them. And keeping good people means keeping your project on track.
Matching funds alongside CRC-P grants
If you’ve secured a CRC-P grant with milestone-based payments, R&D finance can bridge cash flow between grant tranches, ensuring the project stays on schedule. Grant funding is powerful, but it rarely arrives upfront. Finance fills that gap.
Smoothing quarterly spend ramps
Pilots rarely spend evenly. Finance lets you accelerate work during optimal windows (e.g., dry season access, equipment availability) rather than waiting for the next financial quarter. Technical timing often matters more than financial timing. R&D finance aligns the two.
How Rocking Horse R&D finance works
We lend against incurred R&D expenditure in the current financial year. You don’t need to complete your R&DTI claim to apply. Funds are flexible within prudent business use—pilot costs, equipment, staff, materials—so you can allocate capital where it delivers the most value.
For more details on the mechanics and benefits, our guide on improving cash flow with R&D finance walks through the process.
Is Your Mining Project Ready for R&D Finance?
- Experimental plan: You have a documented plan to test a hypothesis or solve a technical problem with uncertain outcomes.
- R&DTI registration intent: You’re planning to register with AusIndustry and claim the R&D Tax Incentive for this work.
- Records and timesheets: You’re tracking eligible R&D hours, materials, and contractor costs.
- Australian spend: The work is being performed in Australia or involves an eligible overseas activity with AusIndustry findings.
- Cash-flow timing: You need funds before year-end to keep the project on track—whether for equipment deposits, payroll, or pilot costs.
If you meet these criteria, R&D finance may be a fit. We’ve put together a detailed eligibility checklist that covers the full requirements.
Common Questions About Mining R&D
Is exploration drilling eligible for the R&DTI?
No. Prospecting, exploring, or drilling for minerals is specifically excluded as a core R&D activity under the R&DTI, even when it involves sophisticated techniques. This is one of the most common misconceptions in R&D in the mining industry. The exclusion is explicit in the legislation.
Can we combine CRC-P grants and R&D finance?
Yes. CRC-P grants are competitive research funding, while R&D finance leverages your R&D Tax Incentive entitlement. They serve different purposes and can be used together. Finance can help bridge cash flow between grant milestones or co-fund your project contribution. Many of our clients use both.
When should we speak to Rocking Horse about financing?
Ideally, early—when you’re planning pilots, ordering equipment, or structuring your R&D program. Early conversations let us align financing with project milestones and grant timelines, so capital is available when you need it. The best time to arrange financing is before you need it.
Ready to Fund Your Mining R&D?
Understanding what counts as eligible R&D in the mining industry is the first step. The second is making sure your innovation program has the funding it needs to move at the pace your technical challenges demand. The gap between those two steps is where many good projects stall.
Whether you’re piloting low-carbon ironmaking, testing battery-electric haulage, or developing advanced ore-sorting systems, R&D finance can help you move faster without waiting for the R&DTI refund cycle. This is particularly critical for long-term R&D investment that requires sustained funding and can’t wait for annual budget cycles.
Want to discuss how R&D finance fits your pilot or project? Start an application or learn more about how we finance R&D.For a broader context on what qualifies as eligible R&D work across different sectors, we’ve covered the core principles and sector examples. And if you’re interested in how innovation is reshaping the sector more broadly, our piece on technology trends in mining explores the bigger picture.