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For the purposes of the Diesel Fuel Rebate Scheme, is the recovery of feldspar (or felspar) an eligible activity within the definition of 'mining operations' in subsection 164(7) of the Customs Act 1901.

Yes. Feldspar is within the definition of 'mineral' and mining for minerals is within the definition of 'mining operations' in subsection 164(7) of the Customs Act.

The entity is contracted to a mining company to carry out the recovery of 'feldspar' (also known as 'felspar').

The activities for recovery involve the drilling, blasting, extraction and haulage of ore and ballast material to specific locations on the mining company's leases, including open pit, stockpiling areas and a quarry.

The recovered material is high grade feldspar and is exported for use in the ceramics industry.

The Australian Oxford Dictionary 1999, Oxford University Press, Australia, defines 'feldspar' as: Any of a group of aluminium silicates of potassium, sodium, or calcium which are the most abundant minerals in the earth's crust

'Mining operations' is an eligible activity for the purposes of the Diesel Fuel Rebate Scheme. Paragraph (b) of the definition of 'mining operations' in subsection 164(7) of the Customs Act defines that term as meaning 'operations for the recovery of minerals'.

Subsection 164(7) of the Customs Act defines 'minerals' as meaning: 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).

The Australian Oxford Dictionary defines 'mineral' as 'a substance obtained by mining'. Therefore a factor to be considered in determining if a substance is a mineral is whether the extraction or recovery process would correspond to the normal understanding of the term 'mining'.

The definition of 'minerals' provided by subsection 164(7) of the Customs Act, therefore, adopts the ordinary meaning of 'minerals'. It then clarifies the meaning in respect of form and chemical qualities - that is, a mineral can be solid, liquid or gaseous and organic or inorganic - and restricts it by excluding certain substances (other than bentonite, kaolin and agricultural use limestone).

The Courts have taken the view that the term 'minerals' has in its ordinary meaning the denotation of substances which can be won by mining (as per the comments of Barwick C J in Federal Commissioner of Taxation v. ICI Australia (1972) 127 CLR 529; 72 ATC 4213; (1972) 3 ATR 321). This denotation is reinforced by the definition of 'mining operations' contained in subsection 164(7) of the Customs Act, with its concentration on 'mining for minerals' and the 'recovery' of minerals, of which mining is an essential part.

Feldspar is a 'mineral' within the ordinary meaning of that word and is subject to operations for its recovery and those operations may be characterised as 'mining'. Feldspar is not excluded from the definition of 'minerals' in section 164(7) of the Customs Act.

Consequently, feldspar is a 'mineral' for the purposes of the definition of 'mining operations' in subsection 164(7) of the Customs Act. As recovery of feldspar is an operation for the recovery of a mineral, it falls within the definition 'mining operations' and is therefore an eligible activity for the purposes of the Diesel Fuel Rebate Scheme. History note: The phrase "other than" has been added to the 5th paragraph of the Reasons for Decision to avoid ambiguity.