Reserves and provisions created based on accounting principles are generally deductible, provided such provisions relate to clearly identifiable losses/ expenses.
Specifically, the Mining Code allows holders of mining licenses to book a provision for future replenishment of mining sites. The provision may not exceed 10% of taxable income for the year after allowing for loss-carry forward, if any. In loss years, the provision may not exceed 0.5% of the value of sales for the year. The provision booked must be used within 2 years for the acquisition of fixed assets destined for the exploration of mining resources or the onsite industrial or semi-industrial transformation of such resources.