Taxation Ruling

IT 142

Mining operations : harvesting and washing operations

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FOI status:

FACTS

The Full High Court in FCT v I.C.I Australia Ltd. (1972) 46 ALJR 679 upheld the previous decision that the activities conducted by I.C.I. at Port Alma to the stage of crystallization of the salt were mining operations upon a mining property within the meaning of Division 10. However, the Court refrained from deciding whether the harvesting and washing operations, subsequent to crystallization, were part of the mining operations.

2. The salt produced at Port Alma is used largely by the company in the production of chlorine. It would be of advantage to the company to argue that the harvesting and washing operations were not mining operations but the first stages in the manufacture of chlorine - this approach would enable the company to obtain depreciation and investment allowance deductions on the cost of new plant used in these operations.

RULING

3. Bearing in mind, however, that the harvesting and washing are part of a continuous operation, it has been decided that it would be more natural and logical to regard the harvesting and washing as mining operations.

COMMISSIONER OF TAXATION
21 December 1972

References

ATO references:
NO 70/5130 P2 F304

Date original memo issued:
21.12.72

Subject References:
MINING
HARVESTING OPERATIONS
WASHING OPERATIONS
CRYSTALLIZATION

Legislative References:
DIVISION 10