Depletion - a tax benefit?

[ronaldvanbell]

Hi

If my understanding is correct, depletion is simply a way to depreciate the asset from which resources are being extracted from. two things I'm not sure about:

1. In a mine. does depletion include only the costs of purchasing and permitting the property, or does it include ALSO the costs of building the mine (capex) or the well?
2. depletion often quoted as tax benefit. why is this? what makes it tax benefit for mining and gas&oil industry? as they pay all those costs that are to depreciate in the future from their pockets.

Thanks
Ron