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ADMINISTRATIVE APPEALS TRIBUNAL - GENERAL ADMINISTRATIVE DIVISION

[2002] AATA 688

Re Adelaide Brighton Cement Ltd and Chief Executive Officer of Customs

S A Forgie, Deputy President

14 August 2002 - Adelaide

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S A Forgie, Deputy President.    On or about 28 March 1996, the applicant, Adelaide Brighton Cement Ltd (Adelaide Brighton Cement), lodged a supplementary application for a diesel fuel rebate in relation to diesel fuel purchased between 1 July 1995 and 29 February 1996 and used in extracting and transporting what I will describe for present purposes as material. On 2 April, 1996, a delegate of the respondent, the Chief Executive Officer of Customs, refused the supplementary application in relation to Adelaide Brighton Cement's purchase of diesel fuel after 1 July 1995. Adelaide Brighton Cement lodged 5 further applications in the tribunal for review of 5 further decisions by the Chief Executive Officer of Customs refusing each of those applications. Those further applications related to diesel fuel purchased for the same purposes up to 2001.

  2  At the hearing of the applications, Adelaide Brighton Cement was represented by Mr de Wijn QC with Mr Baxter and the Chief Executive Officer of Customs by Mr Williams SC with Dr Gelbart. A number of documents were admitted in evidence and I will refer to them in the course of these reasons. Oral evidence was given by Mr Donald Hunter, Mr Edwin Brown, Mr Graham Sawyer, Mr John Oakes and Mr Graham Loomes. A view of Adelaide Brighton Cement's quarry at Klein Point also took place.

THE ISSUES

  3  The issue in this case is whether Adelaide Brighton Cement used the diesel fuel in "mining operations" as defined in s 164(7) of the Customs Act 1901 (Cth). Resolution of that turns on the resolution of 2 subsidiary issues. The first is whether Adelaide Brighton Cement's operations at Klein Point constitute "mining for minerals" so that they are "mining operations" as that term is defined in the Customs Act 1901 (Cth). If so, the second subsidiary issue arises. It is whether the material for which Adelaide Brighton Cement is mining at Klein Point is limestone and so excluded from the definition of "minerals" in the Customs Act 1901 (Cth).

BACKGROUND

  4  Many of the factual matters forming the background to the issue to be considered in this case were not in dispute between the parties. In light of that and on the basis of the evidence, I have made the findings of fact that I will set out in the following paragraphs.

Operations at Klein Point

  5  Adelaide Brighton Cement is a company registered in South Australia and either it or its predecessor, the Adelaide Cement Company, has been engaged in mining for the material since 1913. In 1917, it shifted its operations to Klein Point, which is 6 kilometres south of Stansbury on South Australia's Yorke Peninsula. Klein Point is situated in gently undulating farming land with the sea of the Gulf of St Vincent forming its eastern edge. On the basis of the evidence of Mr Hunter, I find that Klein Point lies on an extensive, flat-lying, tabular limestone deposit of marine origin. The majority of the deposit is soft or broken and permits free digging but there are bands of hard limestone, which are the remains of ancient reefs. Klein Point is approximately 40 kilometres from Birkenhead on the eastern side of the Gulf of St Vincent. Located at Birkenhead is a cement works owned and operated by Adelaide Brighton Cement.

  6  Initially, Adelaide Brighton Cement concentrated on mineral material located on the coastal cliff line but moved inland over the years. It is now concentrating on Mining Leases Nos 3187, 3190, 3193 and 5881 granted under the Mining Act 1971 (SA) (the Mining Leases) and situated on land some of which is owned by Adelaide Brighton Cement and some of which is owned by local farmers. Mining Lease 5881 permits Adelaide Brighton Cement to conduct mining operations for the recovery of limestone (exhibit 1). Adelaide Brighton Cement also holds Mining Leases that it is not currently working. They permit it to mine and recover all minerals except extractive minerals, salt, gypsum, coal and precious stones (exhibit D). At all relevant times, Adelaide Brighton Cement's extraction operations at Klein Point have been conducted in the same fashion. The site is commonly referred to as a quarry.

  7  The steps taken in recovering the material and transporting it to Birkenhead were explained in the statements of Mr Brown and Mr Sawyer as well as that of Mr Loomes and the following findings regarding a broad summary of those steps is adapted from their statements:

   

 •  Exploratory drilling has been carried out over the majority of the Mining Leases and continues to be carried out. The precise location of drilling is determined with the use of Global Positioning Satellite equipment and occurs at intervals of 150 metres. Drilling is undertaken with either diamond core or reverse circulation drilling. Diamond core drilling obtains a full-core sample while reverse circulation drilling obtains chippings as drilling occurs. Samples are taken from each borehole at 2 metre intervals. On the basis of the evidence of Mr Sawyer (Exhibit C, paragraph 16 and Annexure "GGS16") and the report of Mr Hunter (Exhibit C, Annexure "DJEH1") I find that Adelaide Brighton Cement maintains data for twelve substances in the quarry: SiO₂, Al₂O₃, Fe₂O₃, CaO, MgO, Na₂O, K₂O, SO₃, TiO₂, P₂O₅, LOI and Cl. The quantities in which they occur in various locations in the quarry have been plotted and compared with the requirements of the operations at Birkenhead.

 •  Samples from the boreholes are taken to Adelaide Brighton Cement's laboratory located at the quarry where they are subject to X-ray fluorescence analysis ("XRF analysis"). XRF analysis produces a detailed description of the chemical analysis of the chemical composition of the material. It does so by exposing a powdered sample of the material taken from each level of each borehole to an X-ray tube generating a beam of radiation. That beam is reflected by the material to a detector tube and is reflected at varying wavelengths according to the constituent elements in the material. The detector tube reads the wave-peaks corresponding to the various wavelengths of the various elements. That reading is graphed and then compared with control samples of elements to ensure the accuracy of the equipment.

 •  The data obtained in this manner is entered and maintained in a SURPAC mining software database. SURPAC is an industry standard mining software and allows for mine design, planning and production. Data is displayed in three dimensional contour geography. SURPAC enables the user to analyse the composition of the whole of the quarry site and to plan the operation of the quarry on a daily, monthly and half yearly basis. I will return to planning later.

 •  The quarry extends for 1,200 metres in a north-south direction. It is between 24 and 30 metres deep and divided into a series of parallel 3 metre high benches. The depth is limited by the presence of clay and the water table. Each year, the longitudinal face of each bench advances to the west at the rate of approximately 50 to 60 metres.

 •  The first step in recovering the material is to remove the topsoil from the site. That topsoil is stockpiled to be re-spread at a later time after the material has been recovered from the site and other steps in the rehabilitation process have been undertaken.

 •  Some 2 to 3 metres of hard, blocky limestone known as "kunkar" is located beneath the topsoil. It is drilled and then blasted using, in the main, ammonium nitrate and diesel fuel oil. Once it is broken up, the kunkar can be more easily moved to other parts of the quarry from which the material has been removed and which are being rehabilitated.

 •  Material is recovered on the benches by a Liebherr R992 Excavator which is a single diesel-hydraulic back-acting excavator. The excavator moves progressively along a bench excavating approximately 5 to 8 metre wide cuts. It underhand loads the material into two rear dump-trucks (Caterpillar 777B). For the most part, no drilling or blasting is required to remove the material but selective drilling and blasting is required where the material is harder than in other parts.

 •  The dump-trucks take the material to two pre-crusher stockpiles. When completed, each stockpile comprises approximately 70,000 tonnes of material but only one stockpile is under construction at a time. The other is used to supply material to be crushed as described below. Each stockpile is constructed by placing the material in layers some 80 metres in length. The first layer is placed from north to south and flattened with a grader to enable the dump trucks to place the next layer on top of the first in an east west direction. The subsequent layers are also graded and placed in an east west direction until the pre-crusher stockpile reaches the required height.

 •  Working in a north south direction and so at right angles to all layers except the bottom, material is taken from the pre-crusher stockpiles and placed in the hopper in the processing plant. It is taken either directly by a front end loader (Caterpillar 992C) or, when the distance between the pre-crusher stockpile and the processing plant hopper becomes too great for the carrying capacity of the front end loader, is taken by one of the dump trucks.

 •  A sample is taken from each truck load of material. Approximately 30 representative samples are then combined and subject to XRF analysis. These represent 2.7% of a pre-crusher stockpile. That data is added to the SURPAC software and combined with the XRF analysis results from the boreholes in the quarry.

 •  The processing plant is electrically powered and consists of the apron feeder, the rollenrost, the Pennsylvania Dixie Hammermill ("hammermill") and conveyor belts to transfer the material from the plant to a storage bin or to Adelaide Brighton Cement's ship, the Accolade II.

 •  The apron feeder is powered by a Haggland Denison hydraulic motor. It consists of two endless chain strands with 118 bolted-on, meshing conveyor pans which carry the material from the hopper to the rollenrost.

 •  The rollenrost consists of 19 rollers set with a nominal gap of 35mm between each roller shaft. Each roller contains 14 elliptical or "cam" shaped wear resistant discs. Those discs assist in the transportation of the material across the rollenrost, separate the fine material from the coarser material and assist in pre-crushing the material. Separation of the finer material reduces stress and wear and tear on the hammermill.

 •  The hammermill consists of a motor drive unit, rotor with six disks, three hammer shafts, 15 hammers, a central drive shaft, casing, moving breaker plate and removable grates. The rotor, which is in the upper crushing chamber, contains a series of hammers each weighing approximately 200 kilogrammes. Centrifugal force causes those hammers to point radially outwards when the rotor is operating. The material is crushed by a combination of the actions of the hammers, percussive force of the sound and shock waves generated by the hammermill and the material's repeated collision with the breaker plate. There is a gap between the hammer and the breaker plate and that accomplishes fine reduction. It is normally set at 25mm. The maximum particle size is determined by the spacing between the grid bars at the bottom and they are normally set at 75mm.

 •  The material passes from the hammermill to the conveyor belt to be taken either directly to the Accolade II or to a storage bin prior to its being taken at a later time to the Accolade II. The capacity of the storage bin is 7,500 tonnes. The material is conveyed at the rate of 1,800 tonnes per hour and, once in the Accolade II, is taken to Adelaide Brighton Cement's cement works at Birkenhead.

What is the composition of the material sought?

  8  Again based on the evidence of Mr Brown and Mr Sawyer but also that of Mr Loomes, I find that, in the manufacture of cement, Adelaide Brighton Cement requires particular compounds in specified proportions in the manufacture of cement at its Birkenhead plant. Those compounds include calcium carbonate (commonly known as calcite) (CaCO₃), silicon dioxide, (commonly known as silica) (SiO₂), aluminium oxide (commonly known as alumina) (Al₂O₃) and ferric oxide (commonly known as haematite) (Fe₂O₃).

  9  Based on the evidence of Mr Sawyer, I find that Adelaide Brighton Cement's operation at Klein Point seeks to produce material in the following proportions: calcite (85%), silica (10.5%), alumina (1.5%) and haematite (1.2%). Other compounds are contained within the material produced at Klein Point and Adelaide Brighton Cement seeks to limit the amounts of those compounds that it regards as deleterious to its cement production. Those compounds and their upper limits are magnesium (1.2%) and potassium and sodium (combined limit of 0.36%). In some areas of the quarry, the material comprises up to 3.0% magnesium and up to 1.2% of potassium and sodium.

  10  On the basis of the report of Mr Hunter, I find that none of the locations at the quarry contains material comprising the compounds in the proportions sought by Adelaide Brighton Cement for its cement production operations at Birkenhead. Adelaide Brighton Cement achieves the balance of compounds it seeks by using the following strategies:

   

 •  A plan is made for the construction of each pre-crusher stockpile ("construction plan"). From the half yearly plan prepared using the SURPAC software, Adelaide Brighton Cement calculates the number of truckloads allocated to each location in the quarry. Having regard to the total number of locations, that number of truckloads is then reduced in proportion to the number of truckloads required to make a pre-crusher stockpile. Taking into account the locations that are not currently available, truckloads are selected from available locations for a first trial heap calculation. The grade of material from each location is taken into account as is the grade of any material to be fed into the crusher at the same time as material from the planned pre-crusher stockpile. The grade of the resulting planned pre-crusher stockpile must be in pre-determined planning limits. If it is not, modifications to the plan must be made by, for example, varying the amount of material taken from various locations in the quarry.

 •  The grade of a pre-crusher stockpile is controlled on a daily basis during its construction. Results of XRF analyses from the truckloads of material taken to the pre-crusher stockpile are used to up-date the calculation of the estimated grade of that pile. If the estimated grade differs from the planned grade calculated according to the construction plan and does so outside prescribed limits, the plan must be modified. The construction plan may be modified by, for example, varying the amount of material taken from various locations in the quarry but regard must be had to a number of factors including the XRF analysis of the previous shipment, the grade of the pre-blend heap being built at Birkenhead, requirements for crushing direct to the Accolade II and the storage bin, location availability, material crushability and location of equipment in the quarry. The prescribed limits are + 0.2% for silica and + 0.1% for alumina while MgO or equivalent alkalis must not exceed the limits set out in the construction plan (approximately 0.36% of combined K₂O and Na₂O) (see also the evidence of Mr Loomes).

 •  Samples are taken when all the loads to come from a particular location have been dumped on the pre-crusher stockpile. They are sent for XRF analysis.

 •  Material is taken from the pre-crusher stockpile in a south to north direction and so at right angles to the direction in which the material had been placed on the pre-crusher stockpile. This is intended to ensure that the content of the material is homogenised before it is processed.

What is the composition and use of limestone?

  11  On the basis of the evidence of Mr Brown and Mr Loomes, I find that limestone is a sedimentary rock containing more than 50% of calcium carbonate. Generally, the calcium carbonate is present in the form of crystalline mineral calcite.

  12  On the basis of the evidence of Mr Loomes, I find that the raw material used in the manufacture of cement is generally limestone for it contains not only calcium carbonate but, generally, some of the other 3 required compounds. Other sources are shells, such as those recovered from Cockburn Sound by Adelaide Brighton Cement for its cement works at that location, and marble as purchased by Adelaide Brighton Cement from Penrice for its cement works at Angaston.

Operations at Birkenhead

  13  On the basis of the evidence of Mr Sawyer, Mr Loomes and the brochure prepared by Adelaide Brighton Cement (exhibit A), I make the following findings with regard to the cement manufacturing operations at Birkenhead. Portland cement is produced at the end of those operations (exhibit A).

  14  After being discharged from the Accolade II, the material is transported via belt conveyors to the pre-blend building where it is stockpiled by a tripper into 25,000 tonne pre-blend heaps. The tripper moves back and forth along the centre line of the building forming heaps with a triangular section. A bridge-type scraper transfers the material to a conveyor that takes it to the weight building. Shale, sand and iron oxide are added by means of an automatically controlled proportioning system. The resulting mixture is fed by conveyor into 2 Loesche ring roller mills in the Kiln 4 dry process system. Samples of the material are taken during the building of the pre-blend heaps and when it is reclaimed from those heaps. Further samples are taken after the material is mixed with other materials. Sampling is intended to ensure that the mixture fed into the raw mills is correctly proportioned.

  15  In the raw mills, the mixture is dried and crushed finely. It is now known as "raw meal" and is transported on hot gases exhausted from the mill. The raw meal is taken to large electrofilters that separate the solid particles from the gas streams and allow the clean gases to pass up tall stacks into the atmosphere. The raw meal is taken to a 6000 tonne blending silo. The silo both blends and stores the raw meal into a chemically and physically homogenous substance ready to be fed into the rotary kiln.

  16  In the Kiln 4 dry process, raw meal is pre-heated to approximately 800^oC degrees and most of the carbon dioxide in the material is driven off so converting its calcium carbonate to calcium oxide (lime). In the rotating kiln, the raw meal is heated and further carbon dioxide is liberated from the material. Chemical reactions occur and clinker forms in nodules up to 3 centimetres in diameter and emerges from the kiln at high temperature to be cooled in the IKN grate cooler. The clinker is stored. Some is despatched by bulk ship transport to interstate and overseas markets. The remainder is used in the production of cement.

  17  The final stage of the operations produces cement. Two grades are produced. To produce Type G cement, clinker is fed into a ball mill with small amounts of gypsum and material. The mill contains steel balls and, as the mill rotates, the mixture is ground finely and mixed. The mixture then passes through a separator and is stored in a 30,000 tonne silo ready for delivery. Type GB cement is produced in the same mill but the mixture is different. Approximately 20% of the mixture comprises flyash, which is a by-product of power generation at Port Augusta. Cement is delivered to customers from Birkenhead either in bulk in bulk road tankers or in bags of various sizes.

  18  Samples are collected at all stages of the manufacturing process to ensure consistency of the products be they clinker, cement Type G or cement Type GB. On the basis of the evidence of Mr Loomes, I find that Portland cement clinker consists of 4 clinker compounds, which are also known as clinker phases. They are, in the terms adopted by Mr Loomes:

   

C₃S - tricalcium silicate

 

C₂S - dicalcium silicate

 

C₃A - tricalcium aluminate, and

 

C₄AF - tetracalcium alumino ferrite

 

In this nomenclature C = CaO, S = SiO₂, A = A1₂0₃, and F = Fe₂O₃. The above formulae do not fully describe the clinker compounds which in reality are chemical complexes with inclusion of other ions and oxides. None of these compounds actually exist in Portland cement in the chemically pure forms mentioned above. In recognition of this, they are often referred to as "hypothetical compounds". It is common practice among cement engineers to judge the quality of cement by the respective proportions of these compounds. (Exhibit C, page 275.)

Operations at Angaston

  19  Adelaide Brighton Cement has a cement production plant at Angaston in South Australia. It purchases raw material from Penrice Soda Products Pty Ltd (Penrice) for use in its cement production. Penrice operates a marble mine at Angaston.

The legislative background

  20  Adelaide Brighton Cement has paid duty on the diesel fuel it has used at Klein Point and on the Accolade II and, in the circumstances of this case, is entitled to a rebate of the duty it has paid on that fuel if it used it "in mining operations (otherwise than for the purpose of propelling a road vehicle on a public road)" (s 164(1)(a) of the Customs Act 1901 (Cth)). There is no suggestion in the evidence or otherwise that Adelaide Brighton Cement has used the diesel fuel in road vehicles on public roads.

  21  The expression "mining operations" as used in s 164(1)(a) is defined in s 164(7). During the period with which this case is concerned, that definition has been amended. For the period 1 July 1995 to 31 July 1997, it was defined, insofar as it is relevant, to mean:

   

 (a)  exploration, prospecting or mining for minerals, or the removal of overburden and other activities undertaken in the preparation of a site to enable mining for minerals to commence; or

 (b)  the dressing or beneficiation of minerals, or ores bearing minerals, as an integral part of operations for their recovery;

 

and includes:

 (c)  if minerals, or ores bearing minerals, are beneficiated at a place other than the mining site as an integral part of operations for their recovery:

 (i)  the journey undertaken for the purpose of transporting the mineral or ores from the mining site to that place …; and

 (ii)  the return journey of a vehicle, … from that place to the mining site … if it is undertaken for the purpose of repeating a journey referred to in subparagraph (i) …;

 

…

 

but does not include quarrying operations carried on for the sole purpose of obtaining stone for building, road making, or similar purposes.

  22  With effect from 1 August 1997, the definition of "mining operations" was amended by the Customs and Excise Legislation Amendment Act (No 1) 1997 (Cth) to read, insofar as it is relevant in this case:

   

"mining operations" means:

 (a)  exploration or prospecting for minerals, or the removal of overburden and other activities undertaken in the preparation of a site to enable mining for minerals to commence; or

 (b)  operations for the recovery of minerals, being:

 (i)  mining for those minerals …; or

 (ii)  the beneficiation of those minerals, or ores bearing those minerals;

 

…

 (c)  if minerals, or ores bearing minerals, are beneficiated at a place other than the mining site as an integral part of operations for their recovery:

 (i)  the journey undertaken for the purpose of transporting the mineral or ores from the mining site to that place except to the extent (if any) that the journey involves transportation by sea; and

 (ii)  the return journey of a vehicle, … from that place to the mining site … if it is undertaken for the purpose of repeating a journey referred to in subparagraph (i) …;

 

…

 

but does not include:

 (x)  quarrying or dredging operations to the extent that the purpose of the operations is to obtain materials for use in building, road making, landscaping, construction or similar purposes; …

 

…

 The meaning of para (b) is affected by s 164(7A) and (7B) but not in the circumstances of this case.

  23  At all times, the term "minerals" has been defined by s 164(7) to mean:

   

"minerals" means minerals in any form, whether solid, liquid or gaseous and whether organic or inorganic, except:

 (a)  sand, sandstone, soil, slate, clay (other than bentonite or kaolin), basalt, granite, gravel or water; or

 (b)  limestone (other than agricultural use limestone).

 "Agricultural use limestone" is " … limestone for use in the de-acidification of soil in any agricultural activity other than the activity referred to in para (t) of the definition of agriculture" (s 164(7)). Initially, all limestone was excluded from the definition of "minerals" by the Customs and Excise Legislation Amendment Act 1995 (Cth) with effect from 1 July 1995. Later, agricultural use limestone was restored from 1 July 1995 by the Customs and Excise Legislation Amendment Act (No 1) 1996 (Cth).

CONSIDERATION

  24  Much of the submissions made by both parties centred on the judgments of the full court in 2 cases: Goliath Portland Cement Co Ltd v Chief Executive Officer of Customs (2000) 101 FCR 11 (Lee, Cooper and Kiefel JJ) and David Mitchell Ltd v Chief Executive Officer of Customs (2001) 107 FCR 252; 46 ATR 433 (Spender, Marshall and Gyles JJ). I will return to them later in these reasons after setting out what I understand to be the principles established by earlier authorities.

  25  Inherent in both cases is the proposition that I must focus on the notions of the minerals sought and upon their recovery for that is central to the definition of the expression "mining operations". This is so whether regard is had to para (a) or (b) of the definition. The definition begins with the very first step in any mining operation, ie "exploration or prospecting for minerals". It then moves logically to the next steps being those necessary "to enable mining for minerals to commence", ie the removal of the overburden and other activities undertaken in the preparation of a site. These steps are the subject of para (a) of the definition. Paragraph (b) is concerned with the "operations for the recovery of minerals" and it explains that 2 activities are encompassed in such operations ie "mining for those minerals …" and "the beneficiation of those minerals, or of ores bearing those minerals" (Emphasis added). The full court expanded upon the notion of the recovery of minerals being the central point of reference when it had regard also to paras (c) and (d) of the definition in State Rail Authority (NSW) v Collector of Customs (1991) 33 FCR 211 at 215 (Beaumont, Burchett and Foster JJ):

   

It will be seen that, although the definition of "mining operations" progressively expands through the successive subparagraphs of s 164(7), relevantly down to subpara (d), at all times, the concept of the recovery of the minerals is retained as the central point of reference. That this recovery process is intended to be the key element for present purposes is emphasised by the language of subpara (d) itself. This provision picks up, as part of an expended concept of a mining operation, the transporting of minerals from the mine site to a place to be beneficiated but only where the beneficiation of the minerals is carried out "as an integral part of operations for their recovery".

  26  In order for an activity to be characterised as being mining for minerals or the recovery of minerals, it is not enough that the end product contains minerals. In Neumann Dredging Co Ltd (t/a Neumann Contractors) v Collector of Customs (1987) 79 ALR 588 (Northrop, Burchett and Spender JJ), for example, dredging operations "… were not to win anything having a characteristic of a kind which ordinary understanding would describe as mineral, but to win building materials for the uses outlined at the beginning of these reasons. …" ie "… for later building activities of the nature of land reclamation and retaining wall construction. …". (At 590 and 588.)

  27  Does the ultimate use to which material is put determine the issue of whether activities may be regarded as mining operations? This was a question considered by Menzies J in North Australian Cement Ltd v FCT (1969) 119 CLR 353; 1 ATR 225; 69 ATC 4077. His Honour considered whether the recovery of limestone by an open cut operation was the carrying on of a mining operation upon a mining property within s 122(1) of the Income Tax Assessment Act 1936 (Cth). He considered whether the ultimate use of the limestone determined the issue and said at CLR 362; ATR 231; ATC 4083:

   

I have no doubt that workings for diamonds or opals are "mining", although cutting the stones for use involves no change in their constitution or character. Furthermore, if the recovery of limestone for cement making is mining, so, I think, must be the recovery of limestone for grinding for agricultural purposes or crushing for road-making purposes. I think that coal is mined however it may subsequently be used, whether to burn in a stove or for the manufacture of gas or chemicals. I cannot accept the thesis that the use of what is extracted from the earth finally determines whether the extraction from the earth by open cut methods is to be called mining or something else.

  28  His Honour went on to say, at CLR 362-3; ATR 231; ATC 4083 that:

   

… whether an open cut extraction of material is mining or not is something to be determined by an informed general usage which takes into account both the way in which the deposits of the material occur, the character of the material to be recovered and the use to which it may reasonably be put. This is, I think, what is indicated by NSW Association Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509. The conclusion is largely one of fact.

  29  That approach has been followed by the Federal Court in Collector of Customs v Bell Basic Industries Ltd (1988) 20 FCR 146 (Jenkinson, Spender and French JJ). The court and the tribunal before it, considered whether the extraction of black granite dolerite was mining for minerals. Dolerite was in demand for use as cladding of buildings and as monumental stone. Jenkinson J with whom Spender J agreed, said at 151-2:

   

The Tribunal was in my opinion justified in treating as consistent with its ultimate conclusions the circumstances that the material being sought was of substantial value and of particular commercial use, as distinct from building or road stone of comparatively low value, and that it was extracted from the earth's crust, not by merely fragmenting and separating explosive force, but by a specialised technique for dissevering the material into commercially useful blocks of particular dimensions with as little waste of the material as possible. And the Tribunal was not, in my opinion, precluded by anything said in the High Court cases to which Mr O'Sullivan referred from giving effect to its "own understanding of the sense in which words are currently used", as Kitto J did in the Blue Metal Quarries case (at 514). The substances which were being sought in those cases were not black granite, nor were the uses to which black granite is put significant uses to which any of those substances were put at the respective times when those cases were being decided. Further, the most recent of those cases fell for decision almost two decades past. Vernacular usage in the spheres of activity with which the Tribunal was concerned has not been static. The decision of fact which the Tribunal made that the recovery in this country at this time of black granite was in the parlance of those who have occasion to speak of it "mining for minerals" was one which in my opinion the evidence could support, and one which the reasoning in the High Court cases did not as a matter of law contradict.

  30  What are "minerals"? Jenkinson J also considered that question. His Honour considered the dictionary definitions of the word at 149-50:

   

… The Macquarie Dictionary has for the noun "mineral" the following:

   

n 1. a substance obtained by mining; ore. 2. any of a class of substances occurring in nature, usu comprising inorganic substances (as quartz, felspar, etc) of definite chemical composition and definite crystal structure, but sometimes taken to include aggregations of these substances (more correctly called rocks) and also certain natural products of organic origin, as asphalt, coal etc. 3. a substance neither animal nor vegetable. 4. (usu pl) mineral water.

 

The second meaning given by that dictionary accorded, Mr O'Sullivan submitted, with geological classification and was the meaning within which a substance must fall, unless usage had compelled its acceptance as a mineral, in order to answer the description "minerals" in s 164. The substance which the respondent was recovering from the earth was an aggregation of several of the substances geologically classified as minerals and therefore ought to be called rock and ought to be denied description as a mineral, the submission concluded.

 

The Shorter Oxford English Dictionary, as well as the Macquarie Dictionary, gives as a meaning of the word "mineral" a substance obtained by mining. But, according to Mr O'Sullivan's submission, the phrase "mining for minerals" ought not to be understood in a tautological sense, as would be the case if "minerals" were to be read as "a substance obtained by mining". However, that reading would sort well with the other phrases in par (a) of the definition - "exploration … for minerals" and "prospecting … for minerals" and with other phrases elsewhere in the definition.

 

The inclusion in the definition of the word "minerals" of "gaseous" demonstrates, in my opinion, a legislative intention to comprehend by that word substances which would not be regarded as minerals upon any geological classification. From that circumstance I infer an intention to comprehend by that word any substance to which the word is applied in informed general usage. I find no indication in the statutory context of a legislative intention to refer the determination of the question which the definition of the word "minerals" leaves unanswered to any system of scientific categorisation.

  31  French J did not express a definitive view of the meaning of the word "minerals". He noted, at 156, that the common factor in the dictionary definitions is "… the notion of a mineral as a kind of subterranean solid". Ordinary usage of the word does not encompass liquids and gases but s 164 gives the word an extended meaning in that regard. The Customs Act 1901 (Cth) is, though, a revenue statute and there is a strong argument that its terms should be given their commercial or individual meaning where there was such a meaning.

  32  What is meant by "recovery" of minerals. In Federal Commissioner of Taxation v Broken Hill Pty Ltd (1968) 120 CLR 240; 1 ATR 40; 69 ATC 4028, Kitto J had said, at CLR 245, that "mining operations" extend to "… any work done on the property subsequently to the winning of the mineral (eg, transporting, crushing, sluicing and screening) for the purpose of completing the recovery of the desired end product of the whole activity". On appeal, the full court of the High Court (Barwick CJ, McTiernan and Menzies JJ) expressed a reservation. Their Honours said at CLR 273; ATR 45; ATC 4031:

   

… We do not doubt that to separate what it is sought to obtain by mining from that which is mined with it, eg, the separation of gold from quartz by crushing etc., or the separation of tin from dirt by sluicing, is part of a "mining operation" but we would not extend the conception to what is merely the treatment of the mineral recovered for the purpose of the better utilization of that mineral. Thus to crush bluestone in a stone crushing plant so that it can be used for road making, or to fashion sandstone so that it becomes suitable for building a wall or a town hall is not, as we see it, a mining operation. Nor would the cutting of diamonds or opals which have been recovered by mining operations fall within the description of mining operations. In Federal Commissioner of Taxation v Henderson (1943) 68 CLR 29 it was decided that to obtain gold from gold-bearing material, ie, slum dumps, by sluicing, screening, filtering and chemical treatment was a mining operation and this, of course, we accept. The reason for so deciding, however, has no application to a process that does no more than either reduce in size lumps of ironstone of manageable size taken from the earth, or, to increase the size of small fragments of ore taken from the earth in order that the ore which has been mined can be conveniently carried away from the mine and utilized in steel making. In Henderson's Case the object of the taxpayer's mining operations was to obtain gold and those operations comprehended all the steps in the recovery of gold from the slum dumps; here the object of the taxpayer's mining operations is to obtain iron ore-the end product - and those operations comprehend all the steps taken to do so, but once the iron ore is obtained in manageable lumps then its further treatment, either to reduce or increase its size so that it can be conveniently transported from the mine and better utilized in industry, forms no part of the mining operation. In the same way we would not regard the converting of brown coal into briquettes as part of a mining operation; …

  33  The concept of recovery was developed further by Barwick CJ, with whom McTiernan J concurred, in FCT v ICI Australia Ltd (1971) 127 CLR 529; 3 ATR 321; 72 ATC 4213 (Barwick CJ, McTiernan, Menzies and Gibbs JJ). The respondent sank bores and pumped brine to the surface where it was concentrated by natural evaporation, unwanted elements removed and crystallised salt removed and washed. Then s 122(1) of the Income Tax Assessment Act 1936 (Cth) provided for certain deductions where a person incurred certain expenditure "in connexion with the carrying on by him of mining operations upon a mining property". For the purposes of the legislation, salt was regarded as a metal and concentration in relation to a metal and in the context of the case meant the separation of the metal from its ore by any process. Barwick CJ said at CLR 567; ATR 326-7; ATC 4219:

   

The evaporative process which I have described does in fact effect a concentration of the sodium chloride by separation of it from the other constituents of the brine which was, as I think, mined. In the mining to recover many metals what is brought out of or up from the earth is a substance in which the metal is embedded or intermixed. The recovery of the metal is a process of freeing it from that total substance, in general referred to as the ore or ore body. A mineral is defined in the Shorter Oxford Dictionary as "any substance which is obtained by mining. In early and modern technical use the ore (of a metal)". It does not seem to matter whether the process of freeing the mineral is mainly physical or chemical. In general, the process of freeing the metal leaves on one hand the metal and on the other a residue. I much doubt whether that residue, for example, the sand resulting from the flotation process used in barrier mines, or the quartz after the removal of the gold in the case of gold recovered from reef gold or the dross after a cyanide process is properly called the ore or the metal's ore. That term, it seems to me, is properly used to described the substance in which the metal has been found whilst still embedded in or intermixed with it. But the section treats that from which the metal is separated as the ore of the metal. But be that as it may, in general, the "separation" of the metal leaves two physically identifiable substances, usually solids.

  34  Just when a mineral has been recovered and when activities cease to be related to its recovery was considered in Abbott Point Bulk Coal Pty Ltd v Collector of Customs (1992) 35 FCR 371 (Ryan and Cooper JJ, French J dissenting). The essential facts are summarised in the headnote at 371:

   

Coal was mined, crushed, screened, washed and stockpiled at mines at Collinsville and Newlands. The coal was then transported by dedicated railway to the Abbott Point coal export facility, where it was stockpiled according to ash content and derivation. Ships were loaded with coal selected from different stockpiles so as to produce a blend meeting each customer's requirements.

 

The applicants claimed diesel fuel rebate on the fuel used in transporting the coal by rail and in vehicles used at the export facility. …

 There was a market for such lower grade coal but it was smaller, prices were very low, demand fluctuated and there was no customer loyalty. By washing and blending the lower grade coal with higher grade coal, it could be sold in markets in which it would not otherwise be saleable. At the same time, the return from the higher grade coal could be maximised by bulking it out with lower grade coal but only to the point where it met a minimum standard specified by each customer.

  35  The applicants had submitted that the recovery of the coal was not completed until the coal had been blended and that occurred when it was placed on board a ship in layers with each layer coming from specified stockpiles of coal. Ryan and Cooper JJ rejected that submission and said:

   

The process of recovery includes, in our view, those steps which are taken by a miner before sale, by whatever process, to remove the mineral from that in which it is embedded or with which it is intermixed. Such a process comprehends the refining of minerals or ore to remove impurities naturally occurring in the material as it has been mined. Once the process of separation or refining has been completed, to subject the mineral product to a process or procedure designed purely to facilitate its better use as so separated or refined or to render it more readily or more advantageously marketable is not in our view part of the recovery process.

 

In the instant case the coal, as coal, was recovered when it was washed and stockpiled at the mine sites. No further step was taken to separate the coal from foreign material adhering to it or intermixed with it for the purpose of improving the product by separation. What occurred thereafter was an operation designed to place clean coal on board ships in such proportions as to create a combined product with an ash content of 15 per cent, or whatever other content was necessary, to satisfy requirements of a particular buyer. It was a process designed to best utilise the lower grade coal as coal.

  36  That brings me back to the cases of Goliath Portland Cement Co Ltd v Chief Executive Officer of Customs and David Mitchell Ltd v Chief Executive Officer of Customs. Both cases were concerned with operations in which limestone was first won from the earth. In both cases, the tribunal set aside the decision of the CEO refusing the payment of diesel fuel rebate.

  37  In the case of Goliath, the tribunal had earlier found that almost exclusively, the purpose of the extraction process was to obtain the mineral calcite. It also found that the purpose of the mining operations was to recover calcium oxide, which is known as lime. Together with carbon dioxide, calcium oxide was present in the material mined by Goliath and it was present in the form of calcite (ie calcium carbonate). The tribunal found that lime is a mineral and that it is recovered by driving off the carbon dioxide from the calcite. The extraction, subsequent blending and crushing, screening and water removal constituted beneficiation and so came within the description of "mining for minerals". The calcining process in the pre-heater was beneficiation as it led to the recovery of the lime. The subsequent use made of the lime in the clinkering process when it reacted with silica, alumina and ferric oxide to form cement compounds was not part of the beneficiation process. Instead, it was part of the manufacturing of cement. (Re Goliath Portland Cement Co Ltd and Chief Executive Officer of Customs (1998) 53 ALD 659, Deputy President Blow and Mr Gillham and Associate Professor Davis, Members.)

  38  In David Mitchell, the tribunal found that limestone is an ore and that the process of recovering it is mining. The operations to upgrade it physically to prepare it for calcination constitute dressing and the calcining process constitutes beneficiation. The resulting product, lime, is a mineral. Lime was sold variously for agricultural and industrial application and for use in goldmining operations. The remainder was further processed to produce calcium hydroxide or hydrated lime. (David Mitchell Ltd and Chief Executive Officer of Customs (1998) 51 ALD 389 Deputy President McDonald and Mr Gillham, Member.)

  39  In both cases, appeals were lodged by the CEO against the decisions of the tribunal. They were first determined by a single judge and then by the full court (Chief Executive Officer of Customs v Goliath Portland Cement Co Ltd (1999) 42 ATR 189; 99 ATC 4825 (Heery J) and Chief Executive Officer of Customs v David Mitchell Ltd (1999) 43 ATR 191 (Ryan J). Judgment was given by the full court first in Goliath. The essential points made by the full court in that case were:

   

 •  Central to the phrase "mining operations" is the notion of recovery of minerals: see Collector of Customs v BHP Australia Coal Ltd (1994) 53 FCR 499; Commissioner of Taxation (Cth) v Broken Hill Proprietary Co Ltd (1969) 120 CLR 240; Commissioner of Taxation v ICI Australia Ltd (1972) 127 CLR 529. The phrase "as an integral part of the operations for their recovery", which qualifies the extended meaning given to "mining operations" in para (b) in that definition, underlines this. … (At 17.)

 •  What one has regard to is the object of the operations undertaken: the end product: Broken Hill Co Ltd at 273, 274. Put another way, that is when the mining operation ends. So, in cases concerning the recovery of the mineral salt from brine pumped to the surface and subjected to evaporation, it has been held that mining operations were engaged in: ICI Australia at 557; Regional Director of Customs (WA) v Dampier Salt (Operations) Pty Ltd (1996) 67 FCR 108. … (At 17.)

 •  The completion of recovery may be said to occur, and the mining operations conclude, when no further process is undertaken by the miner to separate the mineral from any material adhering to it or intermixed with it prior to sale: Abbott Point Bulk Coal Pty Ltd v Collector of Customs (1992) 35 FCR 371 at 380; Collector of Customs v BHP at 508; Commissioner of Taxation (Cth) v Broken Hill Co at 245. … (At 17.)

 •  The process of separation may however be a lengthy one and involve the application of forces or to chemicals recover the mineral, as the case referred to by Ryan J in David Mitchell illustrates (Chief Executive Officer of Customs v Tasmanian Electro Metallurgical Co Pty Ltd (1997) 76 FCR 476). There Merkel J held that the recovery of mineral can encompass not only the removal of impurities but also a chemical change and the introduction of additives: there sintering and smelting processes directed to the recovery of manganese, a mineral, within ore. In Dampier Salt at 116-117, it was held that the process of recovery continues until at least a saleable product emerges, but not necessarily upon the first production of a saleable product. That is to say, the focus is upon the desired end product. (At 17.)

 •  Limestone was recovered and the processes that followed could be described as the beneficiation of limestone as part of a continuous process in the manufacture of cement. (At 18.)

 •  It could not be said that "… lime was a "mineral" which was recovered. … At the point of stockpiling of the blend prior to its use, it was not suggested that a relevant material could be regarded as recovered and in a form to be saleable. The whole process undertaken is one which goes well beyond the removal of impurities to recover any mineral. …" (At 18.)

 •  Whilst the nature of the process applied in recovery will not always be conclusive of the question whether a mineral has been recovered, what is required is that the mineral be present when the material in which it is contained was taken from the earth, as Ryan J points out in David Mitchell. It is in that sense that one views a process or processes of recovery and what is said to be a "mineral": that which may be won by mining, albeit that other steps are necessary to render it useful or saleable. … (At 18.)

 •  Although not necessary to decide the case, the Full Court could not agree with Heerey J in Goliath or Ryan J in David Mitchell that any more was intended by the exclusion of limestone than limestone itself. In particular, it did not agree with Heerey J that "If "limestone" has been expressly excluded from the statutory definition of "minerals" it seems to me to follow inexorably that the essential and defining component of limestone, namely calcite, must also be excluded. One cannot mine for calcite without mining for limestone, and vice versa". (At ATR 193; ATC 4829.) In rejecting that proposition, the Full Court said: "An exclusion from beneficial legislation should not, in our view, be read widely unless it is clear that it was intended to incorporate more than is conveyed, namely the stated material. Calcite cannot, as a matter of language, be regarded as a derivative of the word limestone. …" (At 18-9.)

  40  In David Mitchell, Gyles J concurred with Spender J while Marshall J dissented. The essential points made by Spender J were:

   

 •  The Tribunal had found that what was mined was the mineral calcite. (At FCR 257; ATR 437.)

 •  The processes for its recovery are not prevented from being "mining operations" for minerals by the exclusion of limestone from the definition of "minerals". (At FCR 257; ATR 437-8.)

 •  Therefore, there was no legal error by the Tribunal in its holding that the extraction process for the mineral calcite constitutes mining operations with the consequence that the process attracts an entitlement to diesel fuel rebate. (At FCR 257-8; ATR 438.)

 •  The end process of the extraction process was, however, not calcite but lime. (At FCR 258; ATR 439.)

 •  Before calcining, the limestone was subjected to screening, crushing and picking to ensure that it had an acceptably high calcite level. Ryan J had said that this tended to support the characterisation of the process as the dressing or beneficiation of limestone but not as part of the operations for the recovery of calcite. Spender J said that, even if it were accepted that screening, crushing and picking was a dressing or beneficiation of calcite, that would not be part of the operations for the recovery of calcite. Instead, it would be dressing or beneficiation for the recovery of lime. The Tribunal had found that what was mined was calcite and, as the dressing or beneficiation would be of calcite for the recovery of lime, that dressing or beneficiation did not come within para (b) of the definition of "mining operations". (At FCR 258; ATR 438-9.)

 •  The calcining process cannot be seen as mining operations in reliance on para (b) of the definition of "mining operations". Recovery involves the freeing or separation of the designated mineral from the ore body in which it inheres. Limestone is not an ore bearing the mineral lime. Limestone is not capable of being characterised as an ore of lime. Lime is not embedded or intermixed with limestone. It is not recovered from the earth and lime is not obtained by mining. It is obtained by calcining limestone. (At FCR 258-60 and 261; ATR 439-40 and 441.)

  41  In returning to the case with which I am concerned, it seems to me to be important that I return to the principles enunciated in these authorities rather than be seduced by any similarities their factual circumstances may have to those with which I am concerned. The first question that I must ask myself, therefore, concerns the identification of the minerals for which Adelaide Brighton Cement was mining. There is no issue that quarrying is encompassed within the meaning of the word "mining". It is certainly the case that the brochures and public relations material that it produces refer to limestone's being quarried at Klein Point and limestone's being used in the manufacture of Portland Cement (exhibits 3, 4, A and F). Mining Lease Number 5881 specifies that "Mining operations for the recovery of limestone may be conducted over the lease" (exhibit 1). In his curriculum vitae, Mr Sawyer referred to the production of limestone at Klein Point in describing his duties as Mine Superintendent, Birkenhead Division, of Adelaide Brighton Cement (exhibit C, p 74). When Adelaide Brighton Cement considered selling its operation at Klein Point and purchasing material from the successful purchaser, reference was made in the negotiations to "your Klein's Point Limestone operation" by a potential purchaser (exhibit C, pp 110 and 113). Another estimated the costs "to mine, crush, shipload and shipping of limestone from Kleins Point to Birkenhead" (exhibit C, pp 117, 119 and 131). A third submitted "an expression of interest for the Mining Processing and Transportation of limestone from Klein Point Quarry to the Birkenhead Plant" (exhibit C, p 138).

  42  At the same time, it is clear from the brochures and public relations material that it is only limestone with particular qualities that is suited to Adelaide Brighton Cement's needs. Therefore, for example, the brochure entitled "Adelaide Brighton Cement Ltd Klein Point Quarry" includes the following statements:

   

Computer analysis of the raw material before it is loaded means that the Birkenhead works receives an even grade sample every day. (Exhibit 4, p 3.)

 

Each truck load is sampled and analysed to ensure that the stockpiles are built to a precise chemical specification before reclaiming and crushing. (Exhibit 4, p 5.)

 

The cement grade limestone is used for making cement and clinker. (Exhibit 4, p 5, emphasis added.)

 

Overburden and waste consisting of weathered limestone , clay and calcareous sand are dumped into worked out areas of the quarry at a rate of 500,000 tonnes per year. (Exhibit 4, p 7, emphasis added.)

 In addition, Mr Baker's article in the MESA Journal dated October, 1996 refers to " cement-grade limestone" (exhibit 3).

  43  The first 2 of the passages in the brochure entitled "Adelaide Brighton Cement Ltd Klein Point Quarry" place emphasis on the chemical content of the material quarried at Klein Point. The reason for that becomes clear from the brochure prepared by Adelaide Brighton Cement and headed "The Manufacture of Portland Cement" (exhibit A). Having explained the processes required to form clinker, the brochure states that:

   

Clinker contains controlled proportions of calcium oxide (lime), silica, alumina and iron oxide. These components are found in materials which fall into two main categories; calcareous or lime-bearing, such as limestone and argillaceous, or clay-like, such as shale. Iron ore is used to provide additional iron oxide. (Exhibit A.)

 Although not clear from the passage, and that is not unexpected as it does not purport to be a scientific analysis of the process, lime does not occur naturally in the limestone as quarried but is a derivative after carbon dioxide is released from the calcium carbonate in the limestone leaving calcium oxide or lime. For all that, the passage indicates in Adelaide Brighton Cement's brochure or public relations material that the chemical composition of the limestone is important to it.

  44  That the chemical composition is important to Adelaide Brighton Cement is also apparent from the steps it takes in the mining of the material at Klein Point. I have already made findings in relation to those above. They include testing the material taken in the exploratory drilling, removal of kunkar, maintenance of detailed records of the quantities in which 12 substances in the quarry (SiO₂, Al₂O₃, Fe₂O₃, CaO, MgO, Na₂O, K₂O, SO₃, TiO₂, P₂O₅, LOI and Cl) occur in various locations in the quarry and comparisons of the needs of the Birkenhead plant with the deposits of those compounds and chlorine. They also include sampling and testing each truck load of material taken to the stock pile and planning of the stock pile. In view of these steps, I am satisfied that Adelaide Brighton Cement attempts to ensure that the material produced at Klein Point has the following proportions of compounds: calcite (85%), silica (10.5%), alumina (1.5%) and haematite (1.2%). I am also satisfied that it attempts to ensure that the material it produces has no more than 1.2% of magnesium and no more than a combined limit of 0.36% of potassium and sodium. In some areas of the quarry, the material comprises up to 3.0% magnesium and up to 1.2% of potassium and sodium.

  45  Having regard to all of the material, I find that the material that Adelaide Brighton Cement obtains from Klein Point is generally known both by it and by others in the industry as limestone. It is not, however, mining it for its being limestone. If it were doing that, it would have no need to discard the kunkar or to test the remaining limestone to ensure that it meets certain prescribed standards. I am satisfied that it is mining it for 4 specific compounds that the limestone contains: calcite, silica, alumina and haematite.

  46  There was no question raised at the hearing that each of the 4 compounds was anything other than a mineral. Each is described either in both or in one or other of the Macquarie Dictionary and the New Shorter Oxford English Dictionary as a mineral. I am satisfied that each is a mineral as that word is defined in s 164 of the Customs Act 1901 (Cth).

  47  I am also satisfied that Adelaide Brighton Cement does not separate all or any of the 4 minerals from each other. It does not need to separate them for the purposes for which it uses them, ie in the production of cement. All that it requires is that the 4 minerals be present in the materials in the specified proportions and within the specified maximum levels of impurities so that they may undergo certain chemical reactions with other compounds and lead ultimately to the production of clinker. Further physical processes lead to the production of cement. I am satisfied, therefore, that the ultimate purpose of Adelaide Brighton Cement in mining the limestone is for use in its cement works at Birkenhead for the production of cement. It is not for the recovery of calcium carbonate, silica, alumina and haematite.

  48  Putting to one side for the moment the exclusion of limestone from the definition of "minerals", did the fact that Adelaide Brighton Cement does not separate all or any of the 4 minerals from each other or from the mixed material itself mean that Adelaide Brighton Cement is not entitled to a diesel fuel rebate? I think not. I have already found that it is mining for 4 minerals. Therefore, it is entitled to be paid diesel fuel rebate in respect of the exploration, prospecting or mining for minerals, or the removal of overburden and other activities undertaken in preparation of the site as set out in para (a) of the definition of "mining operations" as in force prior to 1 August 1997. Similarly, it is entitled to be paid diesel fuel rebate under paras (a) and (b)(i) of the definition of "mining operations" as in force after 1 August 1997. It seems to me that its entitlement is not dependent upon the separation of the minerals one from the other and upon their separation from the other material. The definition before 1 August 1997 speaks simply of "mining for minerals". The definition after 1 August 1997 speaks, insofar as it is relevant, of "operations for the recovery of minerals, being … mining for those minerals …". Adelaide Brighton Cement wins the 4 minerals from the earth and does so purposively because it has a specific use for them. It no less wins or recovers them by virtue of winning or recovering all 4 at once.

  49  There is nothing in the authorities to suggest that each must be separated from the other. Citing Abbott Point Bulk Coal, the full court in Goliath said that the completion of recovery may be said to occur when no further process is undertaken by the miner to separate the material adhering to it and intermixed with it prior to sale. There was no suggestion that it had to be separated in its entirety; only that no further process is undertaken to separate it. In this case, the 4 minerals are not recovered for the purpose of sale but for use by Adelaide Brighton Cement itself. That it does not sell them to another does not alter the principle inherent in Abbott Point Bulk Coal. All that needs to be done to separate the 4 sought minerals from the material adhering to them prior to them being able to be used has been done. Had Adelaide Brighton Cement sold its Klein Point operations as it once contemplated, the purchaser would, at the same stage, have taken all processes to separate all the 4 minerals prior to its selling them to Adelaide Brighton Cement. That purchaser's situation would then have been entirely consistent with that of Abbott Point Bulk Coal. There is no reason why there should be a difference between an operation in which minerals are recovered for sale and one in which they are recovered for use in the operation's own manufacturing process.

  50  I find that the 4 minerals are recovered when they are stockpiled. Any further blending or crushing is beneficial to Adelaide Brighton Cement in its subsequent use of the 4 minerals but it cannot be said to be related to their recovery. Adelaide Brighton Cement's activities in that regard are analogous to Abbott Point Bulk Coal's activities in blending its coal to achieve maximum return for its coal by enabling lower grade coal to be introduced into a wider range of markets than would otherwise be the case. The 4 minerals have been recovered and what is done for their better utilisation in the production of cement is not part of their recovery and so does not attract a diesel fuel rebate.

  51  Returning to the question raised by s 164(7), I have had regard to the manner in which the minerals are recovered, the way in which they occur and the use to which the compounds are put. I am satisfied that, in extracting the material at Klein Point, Adelaide Brighton Cement is mining for minerals and that those minerals are calcite, silica, alumina and haematite.

  52  Having extracted the material carrying the 4 minerals, I find that none of the subsequent processes to which the material or the 4 minerals are subject can be said to amount to their being beneficiated. What is meant by "beneficiation" is a term explained in Abbott Point Bulk Coal at 374:

   

It is clear, in our view, that "beneficiation" is not a term in ordinary English usage. It is a technical term applicable to a range of processes in the mining and metallurgical industries. Accordingly, its meaning is to be determined as a question of fact: see, for example, Max Cooper & Sons Pty Ltd v Sydney City Council (1980) 54 ALJR 234 at 239. Here, the Tribunal found, at least by implication from its reference to another decision of the AAT in Re Western Mining Corp Ltd and Collector of Customs (1984) 56 ALN N456 in which there was evidence similar in effect to that in the present case, that "beneficiation" denotes the processing of minerals or ore-bearing minerals to improve their physical and chemical properties.

  53  The processes that are undertaken after stockpiling the material at Klein Point and at Birkenhead are directed to the use of the minerals in the manufacture of cement. They are not directed to improving the physical or chemical properties of the minerals. Furthermore, they are not directed to the recovery of the minerals. Instead, they are directed to the creation of other chemical compounds and, ultimately, tricalcium silicate, dicalcium silicate, tricalcium aluminate and tetracalcium alumino ferrite, ie Portland cement clinker. Indeed, at no stage of the processes after the extraction of the material from the ground can it be said that Adelaide Brighton Cement's operations are for the recovery of the 4 minerals. Consequently, it is not entitled to a diesel fuel rebate for any part of the journey to transport the minerals to Birkenhead.

  54  But for the exclusion of limestone from the definition of minerals, it would follow that Adelaide Brighton Cement is entitled to a diesel fuel rebate up to and including its stockpiling the material at Klein Point. Does the exclusion of limestone disentitle it? In view of the findings that I have already made, I do not consider that it does. I have found that Adelaide Brighton Cement's object in mining is not limestone. Indeed, it discards some of the limestone as suitable only for land re-examination. Its operations I have found are for the recovery of calcite, alumina, silica and haematite. They are not for the recovery of limestone. The fact that limestone does or may contain those 4 minerals does not detract from this finding. The section focuses on Adelaide Brighton Cement's operations and on what those operations are for. It does not focus on whether the minerals sought by Adelaide Brighton Cement are found in limestone and disentitle the company to a diesel fuel claim on that basis.

  55  That brings me to the full court's judgment in the case of Goliath. Mr Williams submitted that the features of the operation at Klein Point are not materially different from the features of the operation conducted by Goliath at Railton. Both may be described as part of a fully integrated process for the production of cement. Both of Mr Williams' submissions seem to me to be correct. The difference, however, is in the material that I have found is sought by Adelaide Brighton Cement and that which the full court determined the tribunal had found was sought by Goliath. In the case of Adelaide Brighton Cement the material extracted from Klein Point is extracted because it contains calcite, alumina, silica and haematite and because those 4 minerals are required by it in its production of cement. It is extracted from those 4 minerals.

  56  In the case of Goliath, what is extracted from Goliath's quarry is not the mineral sought, ie lime. Lime was not present in the limestone that was extracted from the earth and so could not be said to be recovered from it even though it was later derived from the material as a result of a chemical reaction. It follows that the facts that I have found distinguish this case from that considered by the full court in Goliath.

  57  In deed, the facts that I have found bear some similarity to those in David Mitchell. David Mitchell mined for a mineral calcite. It later used that mineral in a process to recover another product. Mining for calcite was determined to attract an entitlement to a diesel fuel rebate but not the subsequent product.

  58  For the reasons I have given, I:

 1.  set aside each of the decisions under review;

 2.  substitute decisions that the applicant is entitled to a diesel fuel rebate pursuant to s 164 of the Customs Act 1901 for its operations at Klein Point up to and including its stockpiling the recovered material at Klein Point; and

 3.  remit the applications to the respondent to calculate and pay diesel fuel rebate to the applicant.