Collector of Customs v BHP Australia Coal Ltd

53 FCR 499
1994 - 1118A - FCA; No. QG21 of 1994 Fed No. 868/94

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(Judgment by: Foster J, Cooper J, Whitlam J)

Between: Collector of Customs
And: BHP Australia Coal Ltd

Court:

Judges:
Foster J
Cooper J
Whitlam J

Subject References:
Customs and Excise

Hearing date: 28 April 1994
Judgment date: 18 November 1994

Brisbane

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Judgment by:
Foster J
Cooper J
Whitlam J

(Cth) (as amended) under which a rebate of duty is payable to a person who purchases diesel fuel for use by him in "mining operations".  The delegate of the Collector had denied the claim on the basis that the fuel was not used in such operations.  The question which was posed for the Tribunal, therefore, was whether the "pushing-in" procedure was part of "mining operations" conducted at BHP's mines.

The question for the Court, in this appeal brought pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth), is whether the Tribunal, in setting aside the delegate's decision and allowing the claims for rebate, committed errors of law.  The appeal is confined to such questions.  Errors of fact are not reviewable.  In order to isolate the questions of law said to arise in the appeal, it is first necessary to set out the relevant legislation.

THE LEGISLATIVE FRAMEWORK

Section 78A of the Excise Act 1901 (Cth) provides, so far as relevant:- 

"(1)

A rebate is, subject to subsections (2) and (3) and to such conditions and restrictions as are prescribed ... payable to a person who purchases diesel fuel, being diesel fuel upon which duty has been paid for use by him:

(a)

in mining operations (otherwise than for the purpose of propelling a road vehicle on a public road);

...

(7)

In this section 'mining operations' ... and 'use' have the same respective meanings as in section 164 of the Customs Act 1901."

Section 164(7) of the Customs Act 1901 (Cth) defines "mining operations". The relevant parts of the definition are as follows:- 

"(a)

exploration, prospecting or mining for minerals; or

(b)

the dressing or beneficiation (at the mining site or elsewhere) of minerals, or ores bearing minerals, as an integral part of operations for their recovery; and includes:

(c)

other operations connected with exploration, prospecting or mining for minerals that are carried out in, or at a place adjacent to, the area in which the exploration, prospecting or mining occurs;

(ca)

other operations connected with the dressing or beneficiation of minerals, or ores bearing minerals, where that dressing or beneficiation is an integral part of the operation for the recovery of the minerals or of the ores, being operations that are carried out in, or at a place adjacent to, the area in which the dressing or beneficiation occurs;

..."

There was no dispute that coal was relevantly a "mineral" and that the "pushing-in" operation had been carried out "at a place adjacent to the area in which the ... mining" occurred.  The specific questions for decision by the Tribunal were whether the operation amounted to "beneficiation" and, if so, whether it was "an integral part of operations for ... recovery" of the coal. It held that the operation fell within both of these statutory requirements and was therefore a "mining operation" within the meaning of para (b) of the definition.  It did not need to reach a decision on BHP's further submissions that the operation was relevantly one falling within para (c) as being "connected with ... mining for minerals" or within para (ca) as being one "connected with the beneficiation of minerals ... where that ... beneficiation is an integral part of the operation for recovery of the minerals ..." .  BHP has, however, raised these questions before the Court by way of a Notice of Contention.

It is the Collector's contention that, on the facts accepted by it in relation to the "pushing-in" operation, the Tribunal could not, as a matter of law, come to the conclusion either that the operation met the statutory description of "beneficiation" or that, if so, it was "an integral part of operations for ... recovery" of coal from the mines. The facts, it was submitted, simply did not admit of these ultimate findings being made.

The words "beneficiation" and "recovery" are not the subject of statutory definition.  Their meaning was the subject of expert evidence in the case.  It is not contested that it was appropriate for such evidence to be given, the words being non-legal technical terms. (Abbott Point Bulk Coal Pty Ltd v Collector of Customs (1992) 35 FCR 371 at 374).  The Tribunal approached the case by considering separately the questions of "beneficiation" and "recovery." We turn, then, to consider the Tribunal's reasoning in respect of each question and whether any error of law has been demonstrated.

"BENEFICIATION"

The Tribunal was provided with an extensive Statement of Agreed Facts (the "Statement").  This was augmented by the evidence, affidavit and oral, of expert witnesses called on behalf of each side. The evidence dealt with the meaning to be attributed to the term "beneficiation" and with the industrial layout and the general nature of the operations conducted by BHP at its Norwich Park mine.  The Tribunal was satisfied, there being no suggestion to the contrary, that the layout and operations at that mine were basically similar to those at the other mines.

The Statement provided the following agreed information in relation to "coal":- 

"15.

Coal is a mineral for the purposes of the definition of 'mining operations' in subs.164(7) of the Customs Act 1901.

16.

As occurring in nature coal has a wide range of physical and chemical properties.  Any sample of mined raw coal is made up of a large number of separate components in variable proportions.  Broadly speaking the components of coal are:

(a)

carbon based organic material originally derived from plants which exhibit a varying chemical structure and composition according to the original source of plant material and subsequent geological history;

(b)

other non-organic components including finely dispersed clay particles and a variety of other naturally occurring minerals that were either deposited at the same times as the original organic material or subsequently deposited in the coal seam at a later geological time;

(c)

significant quantities of surrounding bedrock external to the coal seam which, as an unavoidable consequence of the mining operations, becomes entrained in the raw coal.

17.

It is common to talk of 'ash' as a component of coal.  This is a reference to the residue that is left when coal is heated in a furnace in the presence of oxygen to burn off any combustible material.  The percentage residue is by definition the ash percentage.  Coal sales contracts usually specify ash level, and a tolerance, as part of the specification for the coal.  If coal were supplied at an ash greater than the specification plus tolerance, then a price penalty would apply.  The contract may also specify a rejection point, above which the shipment would be rejected.

18.

It is also common to differentiate between thermal (or steaming) coal and coking coal.  The specific chemical and physical properties of coking coal are such that when the coal is heated in the absence of air it produces a cohesive porous material called coke.  Coke is an essential component of the blast furnace process for the making of iron."

The Norwich Park mine primarily yielded a high grade coking coal but also produced a lower grade coking coal suitable for blending "with other coal with complementary properties".  It also produced a small quantity of coal, unsuitable for the making of coke but useable as thermal coal.  The coal was obtained from twelve possible faces of varying quality, two or three faces being worked at any one time to achieve a mix of better quality with poorer quality raw coal.

The Statement dealt with stages of processing of the raw material thus won from the coal face.  First, it is transported to the ROM ("run of mine") stockpile from which it is "loaded into a breaker station as the first stage of beneficiation".  Here the coal is broken, crushed and screened with resulting separation and rejection of unwanted large, hard rocks.  The retained material then passes to the second stage of processing in which, by a further screening process, fine particles are separated from coarse material, the fine material constituting approximately 25% of the material retained after the first process. In this stage, both fine and coarse material are then subjected to wetting in order to reduce stickiness resulting from moisture present from the mining process.

The Statement continues its description of the second stage of processing as follows:- 

"The second stage of processing - fine material

25.

The second stage of processing for fine material is a froth flotation process.  Reagents and air are added to water and the coal rich material.  The reagents are diesel and a frothing agent.  Waste material stays in the water and goes out to tailings.

26.

Product material ('concentrate') is obtained by skimming the top of the water to retrieve the froth.  The froth flows into a vessel, which, after the frothing has reduced, leaves that concentrate.  The filtration process then involves applying a vacuum to a very fine mesh which draws water through and leaves the solid concentrate.

The second stage processing - coarse material

27.

The course (sic) material is processed in a separate second stage in a 'dense medium process'.  After the coarse material is screened off, it is placed in a dense medium. Some of the coarse particles at this stage are composed mainly of organic material and others of non-organic material but most are composed of a mixture of organic and non-organic material.

28.

The medium is a liquid which has a density approximately one and a half time that of water, and is made up of water and very fine magnetite.  Magnetite is a very dense very iron rich material in the form of a finley ground powder.  When it combines with water it forms a stable suspension which is dense enough so that the organic rich (or low ash particles) components of the coarse material float and the non-organic (or high ash) components sink.  The high ash components are rejected.

29.

The actual density of the medium can be adjusted during the processing operation in such a way that the particles which float contain either more or less ash.  This is done in order to control the levels of ash in the final product.

..."

The Statement indicates that further separation between high-ash (non-organic) material and low-ash (organic rich) material is achieved by use of a cyclone machine at the end of this stage, after which the fine material and the coarser material leave this stage by their own exits and are both deposited onto a conveyor belt going to the product stockpile.  Although the Statement does not deal with this aspect, it appears from expert evidence accepted by the Tribunal that the stockpile is established on a flat surface under part of which is a concrete tunnel whose roof is flush with ground level.  This is referred to as the "product reclaim tunnel".  At appropriate times, trains are positioned in this tunnel so that containers may be filled with the coal product and transported thence to a nearby port where further stockpiles are established from which ships are loaded.

A "loading point" is established in the floor of the stockpile to provide access to the reclaim tunnel and the trains beneath.  The area surrounding this loading point is described in the evidence as "the active draw down area".  Coal from the stockpile must be moved to this area in order that it may be introduced into the train in the reclaim tunnel.  This involves the "pushing-in" operation whereby the bulldozer operators working on the stockpile select a suitable area of the stockpile and push coal from that area in a slot or bench towards the active draw down area.  Before considering this activity in more detail, it is convenient to refer to evidence accepted by the Tribunal as to the constitution of the stockpile itself.

When the coal arrives on the conveyor belt, after passing through the second stage processing referred to above, it consists of "coarse fraction " coal from the dense medium process and "fine fraction" coal from the flotation process.  These materials are deposited one on top of the other on the conveyor without mixing or "homogenising".  The material in this condition is taken from the conveyor belt by mechanical means and added to the stockpile by means of radial spreader arms.  This operation lays the material progressively over the top of the existing stockpile and "tends to cause segregation of coal according to size. The coarser particles tend to be thrown further and to roll down the sides of the pile, while the finer material 'sticks' and concentrates near the top of the pile."  This further promotes lack of "homogenisation" of the coarse and fine coal particles.

Furthermore, the coal reaching the stockpile after the second stage washing processes contains water introduced from the washing process itself and also from its original moisture content from the mine.  It is clear that the percentage moisture content of the ultimate product is an important commercial consideration and that the removal of water from the coal in the stack is an aim of the overall production process.  The way in which "de-watering" and "homogenisation" is dealt with at the stockpile and the role played by bulldozers both in "pushing-in" and "pushing-out" of the coal in the pile is set out in the following evidence which was accepted by the Tribunal. It comes from the Affidavit of Mr Davidson, an expert witness on behalf of BHP:- 

"21.

The ground on which the product stockpile is made is basically flat, but designed to slope away from the reclaim tunnels to promote de-watering.  Drainage paths tend to appear at points in the product stockpile with water trickling from the stockpile at these points to form channels across the base to the perimeter of the stockpile. A collecting drain goes to a water storage dam where the water is pumped back for re-use in the coal preparation plant.

22.

The use of the thrower and the use of dozers to push out the coal causes blinding of drainage paths, which causes instability in the stockpile and eventually would lead to a slump.  Dozer operators work to maintain the natural drainage paths and, if the stockpile is not draining, dozer operators also work to create a natural drainage point. They do this by selective movement of coal -

(a)

to avoid  blocking drainage paths; and

(b)

to expose wet sections of the stockpile to promote free drainage of these sections.

23.

Dozer operations on the stockpile cause degeneration of the product, breaking the coarser coal particles down to increase the quantity of fine material, and having a detrimental effect on the coal handling properties.  For this reason, it is important not to carry out more dozer work on the coal than is necessary for the operation of the stockpile.  For this reason, the pushing in operation is also calculated to promote the goal of dewatering."

The Tribunal also accepted the following evidence from the affidavit of Mr Gallagher, read on behalf of BHP:- 

"25.

The dozer operation tends to push the fine material from the top region down the outside of the pile, during the pushing out operation.  This fine material forms an impervious layer down the outside of the section being formed, and tends to prevent the drainage of water out of the pile, after it has drained to the base of the pile .

26.

The pushing in operation cuts back through the pile in slots with a single dozer push recombining the segregated material as it picks different layers up on the way through. In this way the pushing in operation tends to reduce segregation and promote homogenisation of the product."

As already indicated, the Tribunal had before it evidence as to the meaning to be attributed to the term "beneficiate".  It accepted the meaning:   "to increase the commercial value of a coal by appropriate treatment." This was the meaning provided by Australian Standard 2418 and was generally agreed in by the expert witnesses in the case.

The Tribunal accepted the submission made on behalf of BHP that the "pushing-in" activity:- 

"affects the physical or chemical properties of (the) coal so as to increase its commercial value by-

(a)

contributing to de-watering of the coal;

(b)

contributing to the homogenisation of the coal;

(c)

minimizing the extent to which the coking properties of the coal can deteriorate in consequence of time and exposure to air;

(d)

enabling the settings at the coal preparation plant to be set at a level which maximizes the amount of product coal which can be recovered from the raw coal."

These findings were amply based upon the evidence in the case.  It is not necessary to set that evidence out here.  There was no contest before the Court that the commercial value of the coal was enhanced by the matters set out in this passage.  The submission made to the Tribunal and repeated to the Court on behalf of the Collector was that the operation of "pushing-in", although it might have those incidental beneficial results could, nevertheless, not be characterised as "treatment" within the definition of "beneficiation." Evidence to this effect was given by expert witnesses called on behalf of the Collector. Evidence to the contrary was given on behalf of BHP.  The evidence from BHP was preferred by the Tribunal.  The Tribunal found as a fact that the operation of the bulldozers in "pushing-in" selected benches of coal towards the delivery point was part of the overall process of "de-watering" and "homogenising" which contributed to the commercial value of the coal by aiding its conformity with the customer's specifications as to homogeneity and water content.  We are of the opinion that this was essentially a question of fact for the Tribunal. Before the Court, the attempt has been made to elevate it into a question of law on the basis that the finding that "pushing-in" amounted to "treatment" was not open on the evidence.  It was not legally possible, it was submitted, to view it otherwise than as an aspect of the transportation of the coal to its ultimate delivery site. There was abundant evidence that the operation could be characterised as being part of the overall treatment of the coal produced from the mine. The question of law must be decided in favour of BHP.

"RECOVERY"

It was the Collector's submission to the Tribunal that the "pushing-in", even if it amounted to "beneficiation" of the coal in the stockpile, nevertheless, took place after the coal had been "recovered". The Tribunal held, on the evidence, that the "pushing-in" activity was part of the "recovery" process.  In so doing it had regard to meanings attributed to the latter word in previous decisions of this Court, particularly in Abbott Point. The Tribunal's findings are exiguously expressed.  It accepted the evidence of BHP's witnesses "as supporting the further finding that the activity is an integral part of the applicant's operations at the Norwich Park and Goonyella/Riverside mines for the recovery of coal." It also observed "that the facts going in the instant case to establish the nature of the applicant's operations at the Norwich Park and Goonyella/Riverside mines establish that this case was vastly different from that presented on behalf of the applicant in the Abbott Point case.  There was little, if any, parity of factual consideration."

It is the Collector's contention that the facts of the case, necessarily viewed in their most favourable light for BHP, were not capable of basing the Tribunals' finding.  They must, it was submitted, inevitably lead to the conclusion that the coal was relevantly "recovered" before the "pushing-in" operation was applied to it.

In answer, counsel for BHP submits that the finding was capable of being justified on the evidence in either of two possible ways.  Before considering them, it is convenient to refer briefly to the decision in Abbott Point.

The case involved a claim for rebate on diesel fuel purchases.  The fuel was used in transporting coal which had been mined, crushed, screened, washed and stockpiled at various mine sites.  The transportation was by dedicated railway from the mine sites to the coal export facility at Abbott Point.  Upon reaching that destination the coal was placed into separate stockpiles depending upon  its ash content and place of derivation.  Blending to meet customer's requirements was effected by taking coal from different stockpiles and loading the coal directly into ships.  The rebate sought related to fuel used for the rail transportation and in vehicles at the Abbott Point facility. The claim was therefore made in respect of fuel used later in the industrial process than the fuel the subject of these proceedings.  Rebate was refused by the delegate of the Collector of Customs.  This decision was affirmed by the Administrative Appeals Tribunal and its decision was upheld on appeal to this Court.

The question was whether the fuel had been used in "mining operations" pursuant to s 164(7) of the Customs Act.  The basic question in issue was whether the operations in which the fuel was consumed were an integral part of operations for the "recovery" of the coal.

The Tribunal held that "recovery" had been complete when coal was "loaded onto a product stockpile at the mine site at the end of the coal preparation operations".  It also stated that "recovery" was complete "when an end product is obtained which is saleable.  The further blending of that product to meet contract specification is not part of the recovery of the mineral and ... is not an activity contemplated by the section".  Accordingly, the Tribunal held that the relevant fuel had not been used in the "recovery" process.  It characterised the operations at Abbott Point "as cargo manipulation or assembly".

In this Court, Ryan and Cooper JJ said (at 378-9) in relation to the Tribunal's reasoning:- 

"The question is whether or not a distinction is to be drawn between winning a product for a market of the miner's choosing and winning it for any available market whether or not the miner chooses to sell into that market.  The Tribunal has held that to be a real distinction and that recovery is complete when the product is capable of being sold into any market irrespective of whether or not it is one which the miner, for commercial reasons, wishes to supply.  In this regard the Tribunal relied upon an earlier decision of the Tribunal in Re Queensland Bulk Handling Pty Ltd and Collector of Customs (Qld) (unreported, Deputy President CJ Bannon QC N88/790, 26 May 1989). Whether an activity falls within the definition of 'mining operations' as defined in s 164(7) of the Customs Act is a question of fact.  So too is the question of when recovery is complete.  In each case a commonsense and commercial approach has to be taken to the question having regard to the exploitation of mineral deposits in Australia.  However, a point is reached where the mineral has been recovered and what is done with it thereafter is the use or processing of it for its better use as a mineral.  Although care needs to be taken in referring to decisions on other legislative enactments to determine the meaning of 'mining operations' in the Customs Act, the authorities do give some understanding as to the common or ordinary acceptation of that term.

In Commissioner of Taxation (Cth) v Broken Hill Pty Co Ltd (1969) 120 CLR 240 at 273 Barwick CJ, McTiernan and Menzies JJ said:

'We do not doubt that to separate  what 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 utilisation of that mineral.'

In Commissioner of Taxation (Cth) v ICI Australia Ltd (1972) 127 CLR 529, Barwick CJ, with whom McTiernan J agreed, said (at 567):

'In the mining to recover any metals what is brought out of or up form the earth is a substance in which the metal is embedded or intermixed.  The recovery of the metal is the process of freeing it from the total substance, in general referred to as the ore or ore body ...  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 the 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 the 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 describe the substance in which the metal has been found whilst still embedded in or intermixed with it.'

See comments to similar effect in the judgments of Walsh J (at 550) and Gibbs J (as he then was) (at 583).

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 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."

Their Honours concluded their judgment by saying (at 380):- 

"The Tribunal, in our view, was correct in concluding that recovery was complete when coal was loaded on to a product stockpile at the mine site at the end of the coal preparation operations.  We should not be taken as deciding that recovery is always complete as soon as an end product is obtained which is saleable.  Rather, for reasons which we have outlined above, we regard recovery as complete for the purposes of s 164 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."

It is apparent, therefore, that their Honours found no error of law in the Tribunals' reasoning as to when, on the facts as found, "recovery" could be said to have been completed.  It is submitted, however, by the Collector that in the passage last quoted, they enunciated a general proposition as to when "recovery" should be regarded as finalised for the purpose of the application of the definition of "mining operations" in s 164.  For the reasons which follow we are of the opinion that this was not so.

French J, in his separate judgment, dealt with the question of law arising in the case (at 389) as follows:- 

"The conclusion that 'recovery within the meaning of the statute was complete upon the bringing into existence of a saleable end product was ... a finding about the construction or effect of the term as used in the Act and therefore raises a question of law ...  So, too, does the effect of the phrase of which it forms part requiring that eligible beneficiation of minerals be an 'integral part of operations for their recovery'.  It was evidently the Tribunal's view that once the recovery process was complete in the sense that there was a vendible product, no subsequent step could be seen as an integral part of it. The construction to be given to the word 'recovery' and the larger phrase of which it forms a part must take into account the legislative policy of these provisions which was identified by a Full Court in Collector of Customs v Cliff Robe River Iron Associates (1985) 7 FCR 271 at 275 when it was said: 'The relevant provisions of the Excise Act 1901 (Cth) reflect a legislative policy of encouragement of mining operations and should not be given a narrow application.'  There is nothing in the concept of recovery which required the conclusion that it ceases when a vendible product is produced.  The mere  excavation and stockpiling of a mineral may yield a vendible product.  Even reject material in tailings dumps can attract buyers.  Whether a product is vendible depends upon whether somebody is prepared to pay for it .  While some concept of utility or commercial value may be inherent in the idea of recovery, there is no warrant for the conclusion that it is a process which ceases upon first production of a saleable product. Such a restrictive construction of the term 'recovery' is, in my opinion, not mandated by the language of the subsection and seems antithetical to the legislative policy.

In making the finding it did on this point the Tribunal, in my opinion, erred on a question of law.  But, in the event, the error was irrelevant to the outcome of the case.  For whatever effect is given to the word 'recovery' it does involve the notion of separation of material and was a process which, on the Tribunal's finding of fact, had ceased by the time the coal was delivered to Abbott Point."

On a full consideration of the judgments in Abbott Point we are quite satisfied that the Court did not purport to lay down any general proposition that recovery of coal was complete when coal was loaded on to a product stockpile at the mine site.  In Abbott Point the coal preparation operations, on the evidence in that case, were finished before reaching the mine stockpile and it was for that reason that Ryan and Cooper JJ expressed the view that recovery was complete when coal was loaded onto that stockpile.  However, it is a question of fact in each case when recovery has occurred.  How the question will be answered will depend upon the nature of the mineral sought to be recovered and the process undertaken to recover it.  It may not be a simple process of physically separating the mineral from any material adhering to it or intermixed with it.  It may, for instance, involve as part of the process of recovery the removal of material or substances introduced during the process for the purpose of recovering the mineral.  Also, it may involve as a part of the process the breaking down and reconstitution of the mineral.

The decision in this case fell to be decided on the evidence tendered before the Tribunal.  It may be remembered that the Tribunal, in the present case, in referring to Abbott Point, said that there was "little, if any, parity of factual consideration" between the two cases and that a "vastly different" case had been presented on behalf of the applicant in the instant case.  When one compares the facts of the two cases, this becomes very obvious.  As already indicated, the relevant fuel use in Abbott Point occurred initially, after the loading of coal onto the train in the reclaim tunnel, and secondly, after the coal was delivered by train to the loading port and stockpiled.  More importantly, however, there appears to have been no factual issue in Abbott Point as to whether work done on the stockpile at the mine site amounted to "beneficiation" or was part of the "recovery" process.  The evidence as to procedures prior to the placing of the coal in the reclaim tunnel was summarised by the Tribunal (and accepted on appeal) as follows (at 372):- 

"The coal undergoes three stages of crushing and screening and fine coal is removed in a 'deduster'.  The coal is then washed in Batac jigs where inferior coal and shaly material are removed.  The washed coal is then 'dewatered'.  The coals from the two modules (the two streams of washed coal and two streams of fine) are then combined on a single product conveyor and taken via a sampling station to the product stockpile.  Underneath the product stockpile is a reclaim tunnel which allows the coal to be transported via another conveyor to the train loadout for shipment to Abbott Point."

Either the processes of "de-watering" and "homogenising" which, in the present case, were undertaken by the bulldozers at the stockpile, did not occur at the mine stockpiles in Abbott Point or they were not referred to in evidence because they had no significance in the case.  There was, of course, no claim made in Abbott Point for rebates for fuel used in relation to work done at the mine stockpiles.

For these reasons, it is our opinion, that the decision in Abbott Point cannot be conclusive of the decision in the present case. The fuel was used for significantly different operations.  The work of the bulldozers at the mine stockpile was not relevant and, accordingly, was not the subject of consideration.  The assistance of that work in "de-watering" and "homogenising" was not in question.

Additionally, it would appear that the detailed evidence given as to the nature of "coal" in the present case was not given in Abbott Point.  It is apparent, however, from the evidence given in this case, that coal cannot be recovered in a pure form in the same way as a metal.  Of its very nature, it exists in different grades and compositions.  The very processes of extraction and refinement which, in the case of a metal, produce a pure product, in the case of coal, fragment the mineral into particles of different size and grade which require that they be later mixed in a appropriate way to produce a satisfactory end product.  The evidence indicates that this is so, even if the end product so produced does not meet the particular specifications of a customer.  The more so, of course, if the object of the whole process is to meet such a specification.  It would seem, therefore, that in the case of coal the separation process is not complete until the segregated particles are de-watered and remixed into an homogenised whole.  It is at that point that the coal can be regarded as "recovered".  It is not until this process is complete that a useable end product is achieved.  And this is so, even if, thereafter , additional operations are required to meet a specific customer's requirements.

If, as we are satisfied, Abbott Point is not to be taken as authority for a proposition that "recovery" of coal must inevitably be complete when it reaches the stockpile at the Mine site, then the way is open for the Tribunal to have made its finding without the commission of legal error.

We revert, then, to BHP's submission that there were two possible paths by which the Tribunal could have reached its finding that the "pushing-in" operation was an integral part of the "recovery" process.  We find it necessary to refer only to the first of the suggested lines of argument.  The argument proceeds, validly in our view, on the basis that moisture or water in excessive quantities is relevantly an impurity to be eliminated in the mining of coal as part of the "recovery" process.  In the present case, the evidence establishes clearly that moisture is present in the raw coal as mined and that considerable water is introduced in the washing procedures both of the fine and also the coarse coal fragments in the second stage of the "recovery" procedure.  When the coal emanating from each aspect of the washing process is placed upon the conveyor belt to take it to the stockpile, it contains more water than is regarded as desirable for the purpose of the end product.  The "pushing-in" operation helps in the reduction of the excess water.  It is, therefore, part of the "recovery" process.

Moreover, the mixture of the fine with the coarse fragments is inadequate. As Mr Gallagher, whose evidence was obviously accepted, said, the process of separation necessarily involved in the washing procedure had to be reversed in order, in effect, to reconstitute the coal as an end product.  The "pushing-in" operation, by aiding this "homogenisation" also assisted in this reconstitution. Both the "de-watering" and the "homogenisation" of the coal were procedures necessary to its "recovery." The evidence, in our view, clearly enabled the Tribunal to find that, until these procedures had been undertaken the "recovery" process was continuing.  Accordingly, it was open to the Tribunal to find, as it did, that the "pushing-in" procedure was both a "beneficiation" and an integral part of the "recovery" of the coal.

In coming to this conclusion, we have not ignored an argument, put on behalf of the Collector, which was based upon evidence that approximately one-third of the coal placed upon the conveyor belt after completion of the washing process was delivered directly to the draw down area and into the reclaim tunnel.  It was submitted that, of necessity, this coal would have retained the percentage of water which it had absorbed in the washing process. As this coal went straight to the train for transport in this condition it had necessarily to be regarded as "recovered".  Accordingly, it was submitted, the coal placed on the stockpile in the same watered condition should also be regarded as "recovered" with the result that the "pushing-in" operation must necessarily be regarded as a post-recovery procedure.  We are not persuaded by this submission.  It ignores the thrust of BHP's evidence to the effect that the operations at the stockpile and the partial by-passing of the stockpile in the direct loading of the train were all part of a planned industrial process designed to produce the desired end product.  Accordingly, the "recovery" process could embrace the ultimate loading of the train with coal containing different moisture contents. The fact that the directly loaded coal which was to be mixed with the coal pushed-in from the stockpile contained a higher moisture content than the coal coming from the stockpile did not mean that the latter coal had not undergone a "recovery" procedure in having its moisture content further reduced by the additional process of "pushing-in" .

Accordingly, we hold that this argument does not demonstrate that the Tribunal has committed an error of law.

The second path of argument advanced by BHP involves, as we see it, a reconsideration of at least portion of the judgment in Abbott Point.  As we are satisfied that the appeal should be rejected on the basis of our acceptance of the first line of argument, it is undesirable that we should, unnecessarily, enter upon any re-examination of the reasoning in Abbott Point. Accordingly, we decline to do so.

The decision we have reached also renders it unnecessary to consider the submissions advanced by BHP in the Notice of Contention.

Accordingly, the Court orders that:-

1.

The appeal be dismissed.

2.

The applicant pay the respondent's costs of the appeal.