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In constructing a building on a mining site, where diesel fuel is used in cranes which lift prefabricated components from a delivery vehicle and position them on the construction site, is that diesel fuel used a 'mining construction activity' as defined in paragraph 11(1)(f) of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?

Yes. In constructing a building on a mining site, where diesel fuel is used in cranes which lift prefabricated components from a delivery vehicle and position them on the construction site, that diesel fuel is used a 'mining construction activity' as defined in paragraph 11(1)(f) of the EGCSA.

On a mining site, an entity constructs a building that will be used in a mining operation.

The prefabricated components are delivered by vehicle to the construction site.

A crane is used to lift the prefabricated components from the vehicle and manoeuvre them into position.

An entity then levels, aligns and secures the prefabricated components whilst they are held into position by the cranes.

Section 53 of the EGCSA provides that you are entitled to an off-road credit if you purchase off-road diesel fuel for a use by you that qualifies. Use in 'mining operations', otherwise than for the purpose of propelling any vehicle on a public road, is a use that qualifies.

The term 'mining operations' is relevantly defined in subsection 11(1) of the EGCSA and includes: ... (f) a mining construction activity. ...

The term 'mining construction activity' is relevantly defined in paragraph 15(d) of the EGCSA and includes the construction of buildings, plant or equipment that is for use in a mining operation referred to in paragraph 11(1)(a) or 11(1)(b) of the EGCSA, provided the construction is carried out: • at the place where the mining operation is carried on, and • the construction is carried out by the person who carries on the mining operation or by a person contracted by that person.

Although the word 'construction' is not defined in the EGCSA, guidance can be had from its ordinary meaning. The Macquarie Dictionary, [Multimedia], version 5.0.0, 1/10/01 defines the verb 'construct' as: 1. to form by putting together parts; build; frame; devise.

In this case, the use of diesel in lifting and positioning the components is a use that can be described as 'putting together parts' to make the finished building. Once the cranes have lifted and manoeuvred the components into position, the parts are permanently secured there.

Thus the lifting and manoeuvring are integral activities in the 'construction' of the building.

This conclusion is supported by the application of the principle in Collector of Customs v. Pressure Tankers Pty Ltd and Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 the issue for determination was whether or not the operation of loading stock feed from the truck to the storage silos is an operation connected with the rearing of live-stock for the purpose of the off-road rebate provisions. The Court said that such cases always involve a question of degree and where to make the cut-off point. It adopted, for the purposes of the cases before it, the observations of Ryan and Cooper JJ, in Abbott Point Bulk Coal Pty Ltd v. Collector of Customs (1992) 35 FCR 371 at 378 which referred to the need to take 'a commonsense and commercial approach ... to the question having regard to the evident purpose of the legislation...'. It considered that the purpose of the legislation is to encourage the activities for which the off-road credit is payable.

In this case, we consider that the relevant activities are more closely associated with the eligible category of 'mining operations' than with the distribution and delivery of prefabricated building components.

We determine that, on a mining site, the activities of lifting prefabricated components from a vehicle and manoeuvring them into their permanent place are activities which take place in the course of construction.