Midland Brick Company Pty Ltd and Chief Executive Officer of Customs
[2008] AATA 673
•31 July 2008
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL
No: W 199800376
General Administrative Division No: W 1999/302
No: W 2001/178
Re: Midland Brick Company Pty Ltd
Applicant
And: Chief Executive Officer of Customs
Respondent
DIRECTION
TRIBUNAL: Mr A Sweidan, Senior Member
DATE: 21 August 2008
PLACE: Perth
The Tribunal made a decision on 31 July 2008.
The Tribunal is satisfied that there is an obvious error in the text of that decision.
The Tribunal therefore, pursuant to section 43AA(1) of the Administrative Appeals Tribunal Act 1975 (cth), DIRECTS the Registrar to alter the text of the decision by substituting the words “therefore applies” for the words “does not apply” in paragraph 119 of the decision.
...........(sgd) Mr A Sweidan......
Senior Member
DECISION AND REASONS FOR DECISION [2008] AATA 673
ADMINISTRATIVE APPEALS TRIBUNAL ) No W1998/376
) No W1999/302
) No W2001/178
| GENERAL ADMINISTRATIVE DIVISION | ||
| Re | MIDLAND BRICK COMPANY PTY LTD | |
Applicant
| And | CHIEF EXECUTIVE OFFICER OF CUSTOMS |
Respondent
DECISION
Tribunal Mr A Sweidan, Senior Member Date31 July 2008
PlacePerth
Decision The Tribunal affirms the decisions under review. ......(sgd) Mr A Sweidan.............
Senior Member
CATCHWORDS
CUSTOMS AND EXCISE – diesel fuel rebate –mining operations – mining for minerals – clay exception – kaolin exclusion – determination of applicant’s objective purpose – excavation not for kaolin – rebate not applicable – decisions under review affirmed
LEGISLATION Customs Act 1901 (Cth) s.164
CASES
Chief Executive Officer of Customs v Adelaide Brighton Cement Ltd (2004) FCAFC 183
Associated Blue-Metal Quarries v Federal Commissioner of Taxation (1955-56) 94 CLR 509
North Australian Cement Limited v TheCommission of Taxation (1969) 119 CLR 353
Neumann Dredging Co Ltd v Collector of Customs (1987) 79 ALR 588
North Australian Cement Limited v Federal Commissioner of Taxation (1989) 89 ATC 4765
Collector of Customs v Bell Basic Industries Ltd (1988) 20 FCR 146
Re Boral Bricks Ltd and Australian Customs Service (1988) 18 ALD 456
Re Neumann Sands Victoria Pty Ltd and Australian Customs Service (Q93/76, 14 February 1995)
Collector of Customs v Neumann Sands (Victoria) Pty Ltd (1996) 136 ALR 584.
Re Water Authority of WA and Collector of Customs (1995) 37 ALD 600
Re Boral Resources (NSW)Limited and Chief Executive Officer, Australian Customs Service (1996) 43 ALD 380
Re CSR Limited and Chief Executive Officer, Australian Customs Service (1997) 46 ALD 746.
CSR and Metromix v CEO of Customs (1997) 48 ALD 7
Re David Mitchell Ltd and Chief Executive Officer of Customs (1998) 51 ALD 389
Re Goliath Portland Cement Company and Chief Executive Officer of Customs (1998) 53 ALD 659
Goliath Portland Cement Co Ltd v Chief Executive Officer of Customs (2000) 101 FCR11
David Mitchell Ltd v Chief Executive Officer of Customs (2001) 107 FCR 252
Re Adelaide Brighton Cement Ltd and CEO of Customs (2002) 71 ALD 128
CEO of Customs v Adelaide Brighton Cement Ltd (2004) 139 FCR 147REASONS FOR DECISION
31 July 2008 Mr A Sweidan, Senior Member BACKGROUND
Decisions under review
1. In the decisions under review the respondent refused three applications for diesel fuel rebate lodged by the applicant (Midland), which together related to fuel which was purchased by Midland in the period from 1 July 1995 to 27 May 1999 (the claim period), and used by Midland:
1.1. in Midland’s extraction operations at its clay pits, and ancillary activities at the clay pits, such as rehabilitation of areas after extraction has finished, and construction of private access roads;
1.2. in trucks transporting the extracted clay to Midland’s brick manufacturing plant;and
1.3. in maintaining the stockpiles at the brick plant, and loading the clay into the primary crusher.
2. The respondent refused the applications for diesel fuel rebate on the basis that none of the fuel was used in mining operations as defined in s.164(7) of the Customs Act 1901 (Customs Act), as claimed by the applicant.
3. At the hearing Midland abandoned it’s claims for rebate in respect of any activities after the first stock piling of the extracted materials.
FACTS ALLEGED BY MIDLAND
4. Midland’s Statement of Facts reads in part, relevantly, as follows:
3. Two booklets are attached (Attachment A) which describe the business of Midland Brick Company Pty Ltd.
4. The Targeted Minerals
Midland conducts mining operations at various sites, targeting certain principal minerals for use in the manufacture of bricks. Those principal minerals (“the Targeted Minerals”) are:
·Kaolinite
·Illite
·Silica
5. The clay body
When considering clay, it is important to differentiate between the “clay body” and the “clay minerals” contained within the body.
6. The clay body material will be comprised of a number of minerals. One group of minerals contained within the clay body are hydrous aluminium silicate minerals referred to as “clay minerals”. Kaolinite and illite are two such clay minerals contained within the clay body. The presence of hydrous aluminium silicate minerals, or clay minerals, within the clay body gives it certain characteristics that make the material useful in brick making.
7. The clay body will also contain other minerals, such as silica. These other minerals are sometimes referred to as “non‑clay minerals”.
8. The word “clay” can sometimes be used to refer to the larger body of material that Midland removes from the earth, and at other times is used to refer to the aluminosilicate clay minerals contained within the larger body.
9. Midland seeks material that is suitable for the manufacture of bricks. In very basic terms, the manufacture of bricks involves heating or “firing” a suitable material at very high temperatures in a kiln, with the object of producing a finished brick product that is hard, strong, durable and highly resistant. When fired at high temperatures, chemical and physical changes take place to the minerals in the material that, on cooling, produce a hard, strong, highly resistant material suitable for use in building and construction.
10. Factors controlling the properties of clay are:
·clay mineral (hydrous aluminium silicate) composition;
·non-clay mineral composition;
·texture;
·exchangeable ions and soluble salts; and
·organic material.
11. It is unusual for clay body deposits to be completely homogenous. A number of other minerals and matter which are unwanted and regarded as contaminants (particularly when in excessive quantities) are also found in the various clay body deposits mined by Midland. These include:
·limestone (calcite);
·soluble salts;
·carbonaceous material;
·fluorides;
·vanadium oxide; and
·sulphates.
12. A report on Cretaceous Shale Deposits (Attachment B) is provided as an example of a geological report prepared for Midland in respect of one of its sites (Bullsbrook – Muchea). The report identifies (refer page 6) places within the deposit where the sulphur content is too high to be of use and the basal beds of the pits are too saline.
13. Clay is not extracted for any purpose by Midland other than for the Targeted Minerals contained within. Clay not fulfilling mineral or physical specifications is identified on site and rejected.
14. In addition to on-site quality assurance, clay is tested periodically for its mineralogical, chemical and physical composition. X-ray diffractometry (XRD) is used to determine the types of crystalline minerals present in clay on the basis of their crystal structures.
15. Physical composition relates to size, shape and size distribution and principally affects:
·plasticity;
·drying shrinkage; and
·dry strength.
16. Kaolinite
Kaolinite is a clay mineral, ie a hydrous aluminium silicate. It is sought by Midland because it is a key mineral in the manufacture of bricks. It is important to the brick making process because of its plasticity and the dry strength it provides to the unfired product. When fired at high temperatures, the kaolinite reacts with other components present in the clay body, resulting in agglomeration and partial melting/fusion of the components. The melt solidifies upon cooling, resulting in a strong glassy bond.
17. Kaolinite is a finely crystalline form of hydrated aluminosilicate. In its pure form it will have the chemical formula Al2O3.2SiO2.2H2O (the theoretical composition expressed in oxides would be SiO2 - 46.54%, Al2O3 - 39.50%, H2O - 13.96%).
18. A clay body that contains a significant proportion of kaolinite is known as kaolin.
19. Neither kaolinite or kaolin were excluded from the definition of “minerals” in former section 164(7) of the Customs Act 1901.
Illite
20. The other group of aluminosilicate clay minerals that are most useful for brick manufacture are illites, or hydrous micas. Illites are hydrated aluminosilicates that contain some potassium in their chemical structure. The chemical formula most commonly assigned to illite is of the form KyAl2(Si 4-y, Aly) O10(OH)2 where y is less than 1. Often illite clays also contain iron and magnesium oxides.
21. The illite group of clay minerals are important components to brick making clays. In general they have a shorter firing range than the kaolin group and show a higher fired shrinkage. These properties however contribute to a lower water absorption and higher fired strength which is due to the potassium oxide content and is akin to fluxing.
22. It is unlikely that a brick which contained kaolinite clays only could be fired to meet the specifications of a construction brick without the addition of fluxes as a fire brick would be the result. The illites provide the fluxing property required to produce bricks of suitable strength.
23. The iron content of the illite group can be a significant contributor to fired red coloration.
24. The plasticity and drying shrinkage properties are variable and some illite clays display a water expansive character. Like kaolinite, finer flake particles means a greater plasticity but this is often associated with higher drying shrinkage and drying cracking behaviour.
25. Mica, the parent mineral of the illite clays, is also a useful mineral - giving the clay the necessary fluxing properties as well as the illite. The mica mined by Midland is also known as muscovite (or potash mica).
26. Neither illite or mica were excluded from the definition of “minerals” in former section 164(7) of the Customs Act 1901.
Silica (quartz)
27. Another key mineral in the manufacture of bricks is silica (quartz). Silica is not a clay mineral, ie it is not a hydrated aluminosilicate. (In this context, the “free silica” contained as a separate mineral in the clay body should not be confused with the silica that is chemically combined within the hydrated aluminosilicate clay minerals).
28. Silica is an inert material that is chemically resistant and has a high melting point. Silica is a non‑plastic material, and its presence reduces the plasticity and drying shrinkage of the unfired clay body. The presence of silica in the clay body material provides the basic skeleton structure required for brick making. Silica provides a stable structure to the material that balances the plasticity of the hydrated aluminosilicate clay minerals - it reduces the material’s tendency to slump or distort when fired to temperatures that result in the formation of large amounts of melt.
29. Silica is important in balancing the shrinkage of the clay in the drying and firing stages of brick manufacture. Excessive shrinkage renders the bricks prone to warpage, cracking or structural imperfections. The desired shrinkage factor at both the drying and firing stages is obtained through the presence of an optimum proportion of silica or other non‑plastic material in the clay body.
30. Silica was not excluded from the definition of “minerals” in former section 164(7) of the Customs Act 1901.
Quality Standards & Mineralogy Tests
31. The quality standard for the extracted materials, as used during the claim periods, is provided at Attachment C. It is in the form of a study of “Clay in Use at Whitmans Brick Co Pty Ltd – July 1985” (now part of Midland).
32. A list of all the clay mineralogy tests recorded by Midland since 21 June 1967, together with an analysis of all of the clay stored in the different bays at the brick works, and copies of two of these test results dated 18 November 2003 and 20 November 2002 are attached (Attachments D, E and F).
The Mining Operation
Mining Approvals
33. Applications to mine for clay in Western Australia must be approved by the State Planning Commission, and are subject to licensing by the relevant shire or city council. The council will issue an Excavation Licence where the activity is approved.
34. The Mines Regulation Act of Western Australia requires Midland to have a Registered Mine Manager as the person directly responsible for the clay mining activity.
Mining Sites
35. Midland currently mines for clay in 5 geological zones, all within about 100 kilometres of Perth situated on a combination of land owned or leased by Midland, and land in private ownership.
36. A list of mine sites within each zone is at Attachment G. This includes sites which are currently active, and sites which have been exhausted (consumed) during the period to which these rebate claims relate.
37. The above list also shows the major mineral component of each site. Whilst the clays found in each zone have distinctive chemical and physical properties, the targeted minerals are shown as being present at each site.
38. For Midland’s operational purposes, each type of clay is allocated a grade reference. A list of the approximate chemical composition (as determined by Midland) of each grade is at Attachment H.
Targeting of New Mine Sites
39. The first step in finding a new mine site is to look for the required type of geological zone.
40. This is followed by drilling and sampling along a grid pattern. Samples are sent to Midland’s laboratory for chemical and physical testing, and results recorded.
41. In determining whether a new site is suitable for mining, Midland assesses several factors, including:
·the volume of raw material (ie clay);
·its uniformity;
·how the new material will interact with current (known) material; and
·the chemical and physical composition, based on laboratory testing
42. If a site is identified as containing the targeted minerals, surveyors will produce a base map of the site, based on the grid points from the drilling program.
Mine Planning
43. Prior to mining commencing, the site will be re-drilled to confirm previous results.
44. Mining of a site will depend on the operation requirements of Midland for particular clay types, and will typically commence 1–2 years in advance of the need for that clay.
Extraction and Stockpiling
45. Midland generally mines the clay by the following process:
·cap rock and overburden (4 – 5 metres average) are stripped by excavator
·front end loaders are used to load layers of clay directly in to trucks
·clay is then:
o stockpiled and/or pre-blended/homogenised on site, or
o transported directly to the brickworks, and stockpiled in discrete bays
46. Mining occurs primarily during the driest months.
47. When the clay is transported back to Midland’s brickworks, it is weighed, and segregated in covered bays in the stockpile shed, according to its chemical and physical characteristics. The average turnaround time of this clay is about 3 months from delivery to the stockpile shed to its use in the manufacture of bricks, although some particular clay may be turned around on the same day as being delivered.
MIDLAND’S ASSERTIONS
48. Midland’s Statement of Contentions concludes as follows:
80. The required minerals are the target of the mining operations.
These minerals are not impacted by the exclusions in respect of the definition
of “minerals”.
81. Alternatively, the material Midland mines is kaolin. Kaolin is not excluded from the definition of “minerals”.
82. In summary, the Applicant contends that:
1The Applicant is entitled to diesel fuel rebate under former section164(1) of the Customs Act 1901 and/or section 78A(1) of the Excise Act as it has purchased and used the diesel fuel the subject of this application for the purpose of mining operations at various sites in Western Australia within the meaning of former section 164(7) of the Act.
2The purpose of the operations being carried on at those sites was, and is, to mine for commercial use the minerals kaolinite, illite and silica.
3The nature and characteristics of the extraction activities carried on at the sites are those of mining, and, in particular, mining for the Targeted Minerals. It is contended that Midland’s activities bear the nature and character of a mining operation because they involve:
3.1exploration
3.2mine planning;
3.3the testing of minerals through the taking of samples for geological testing for Targeted Mineral content and quality prior to extraction;
3.4the stripping and removal of overburden undertaken in the preparation of the mine sites to enable mining for minerals to commence;
3.5operations for the recovery of the Targeted Minerals, being mining for those minerals;
3.6rehabilitation.
4Each of the Targeted Minerals was present when the material in which it was contained (being the clay body) was taken from the earth at the various sites; and each of the Targeted Minerals was in that way recovered as a result of the mining operations.
5The fact that the Targeted Minerals are later used by Midland for the purposes of manufacturing bricks does not affect the characterisation of the extraction operations by which they are targeted and recovered from the earth as constituting mining operations. The purpose of the mining is to recover the Targeted Minerals for use in the subsequent manufacture of bricks.
6Therefore, as the Targeted Minerals are “minerals” and they are not individually excluded by former section 164(7) of the Customs Act, there is no basis for the Respondent to reject claims for rebate in respect of the extraction and beneficiation of the clay ore that possesses the Targeted Minerals.
7It is also important to note that the plural of the word “minerals” is used in the Act so as to be able to cover a situation of mining for a specific mineral or suite of minerals. In this case, the clay is not the mineral being mined, but merely the host ore that contains the desired minerals, the object of Midland’s mining operations.
8Moreover although Midland does not mine for the clay per se, the exclusion of clay under former section 164(7) of the Customs Act does allow for two forms of clay to be eligible “minerals” for diesel fuel rebate: bentonite or kaolin. In this instance, the excavated clay meets the description of kaolin.
9Midland actively seeks out only mining sites that are identified as containing kaolinite content as it is essential for the raw material for making bricks. It is the kaolinite properties that enable the clay to be used for brick making.
10Accordingly, the excavated clay host in question, being kaolin clay, is not excluded by former section 164(7) of the Customs Act and is therefore eligible for the diesel fuel rebate scheme.
11In addition, as stated previously Midland does not mine for purposes of recovering the clay per se. It mines for the purpose of recovering the Targeted Minerals within those deposits, the end use of which is dependent upon the mineral content.
12The drying / souring, homogenisation and crushing / screening activities are identified as beneficiation activities which improve the quality of the mineral bearing ore.
13The excavation is not for the mineral “clay,” per se, but rather for the minerals which are contained within the clay body.
14The Targeted Minerals (not the clay body) are the minerals deliberately mined for and recovered within the meaning of the Act. Alternatively, the excavated clay host in question, being kaolin clay, is not excluded by section 164(7) of the Customs Act and is thus eligible for the diesel fuel rebate scheme.
15Therefore, since the diesel fuel was purchased and used by the Applicant in and for the purpose of the mining activity, the Applicant contends that it is entitled to rebate for all of the fuel purchased and used in the period of the claims in the mining operations including the extraction of the Targeted Minerals.
83. In summary, it is contended by the Applicant that it is entitled to rebate for all
of the diesel fuel purchased and used, in the periods of the claims, for the mining
operations comprising the extraction of the targeted minerals and beneficiation
activities up to and including the crushing and screening.
5. It is clear in the Tribunal’s view that the references to “Targeted Minerals” are designed to bring Midland’s operations within the ambit of the Full Federal Court decision in Chief Executive Officer of Customs v Adelaide Brighton Cement Ltd (2004) FCAFC 183. (Adelaide Brighton Cement)
6. In the Tribunal’s opinion however the evidence does not support Midland’s assertions regarding “Targeted Minerals” and, as set out below, the evidence shows that the facts in this matter are different and distinguishable on a number of grounds from those in Adelaide Brighton Cement.
LEGISLATIVE AND CASE HISTORY
The respondent provided the following history which was not disputed by Midland:
Before the 1995 amendment to the Customs Act 1901
7. It is clear that Australian law has long recognised a distinction between mining and other operations such as quarrying or dredging for building materials. It is not the case that the extraction of any substance from the ground in order to sell it or use it is regarded as mining, or mining for minerals .
8. The leading case in that regard is NSW Associated Blue-Metal Quarries v Federal Commissioner of Taxation (1955-56) 94 CLR 509 where the High Court held that the extraction of bluestone for road-making was not mining operations on a mining property within the meaning of an Income Tax provision.
9. Menzies J applied Blue-Metal Quarries in North Australia Cement Ltd v Commissioner of Taxation (1969) 119 CLR 353 where he held that the extraction of limestone for use in making cement was not mining operations on a mining property for Income Tax purposes. Menzies J at 362-363 proposed the following test, adopted from the reasoning in Blue-Metal Quarries:
“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”
10. That informed general usage test has been applied in numerous subsequent cases, under both the Income Tax Assessment Act and the Customs Act 1901 (Customs Act).
11. The diesel fuel rebate (DFR) scheme commenced in 1982 with the Diesel Fuel Taxes Legislation Amendment Act 1982. That Act inserted a new s. 164 of the Customs Act 1901, and s. 78A of the Excise Act 1901. Each section provided for a rebate of duty to be paid for fuel purchased for use in, inter alia, “mining operations’.
12. The definition of mining operations for both provisions was in s. 164(7) of the Customs Act, and relevantly provided:
mining operations means-
(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 -
…
but does not include quarrying operations carried on for the sole purpose of obtaining stone for building, road making or similar purposes.
13. Those relevant parts of the mining operations definition remained essentially the same until 1997, and applies to part of the claim period in this matter. At all relevant times the central concept in the definition has remained mining for minerals.
14. The 1982 Act also included the following definition of minerals in s.164(7):
‘minerals’ means minerals in any form, whether solid, liquid or gaseous and whether organic or inorganic.
15. That definition was not amended until 1995.
16. The Full Federal Court first applied the informed general usage approach of Menzies J in the Customs Act context in Neumann Dredging Co Ltd v Collector of Customs (1987) 79 ALR 588, in upholding a decision of the AAT that the dredging of sand for use as landfill was not mining for minerals within the meaning of s.164(7).
17. Spender J also applied the approach of Menzies J in North Australian Cement Limited v Federal Commissioner of Taxation (1989) 89 ATC 4765, but with the opposite result, finding that the same operations of extraction of limestone for use in making cement were mining operations on a mining property for Income Tax purposes.
18. In Collector of Customs v Bell Basic Industries Ltd (1988) 20 FCR 146, the Full Federal Court again applied the informed general usage test in holding that it was open to the AAT to find that the extraction of an ornamental black granite was mining for minerals . The black granite was rare and valuable, about $4,000 per cubic metre. The Tribunal distinguished the rarity and commercial value of the black granite, compared to ordinary building stone, in finding that the black granite was a “mineral”, and its extraction was mining for minerals .
19. However of more significance for present purposes was Re Boral Bricks Ltd and Australian Customs Service (1988) 18 ALD 456, where the Tribunal found that the extraction of clay for use in making bricks was mining for minerals , and therefore eligible for DFR. The Tribunal stated:
The rebate is also payable where the mining operations result in the winning of a product, the end use of which is dependent upon, inter alia, perhaps, its mineral content.
There was no appeal from that decision. In the Tribunal’s view the
sentence quoted above does not provide a correct test for determining
whether an operation is mining for minerals . It is considerably different than
the test of informed general usage that was previously and subsequently
applied. In any event, that sentence could not now be applied in the face of
the subsequent exclusion of clay from minerals .
20. In the unreported decision of the AAT in Re Neumann Sands Victoria Pty Ltd and Australian Customs Service (Q93/76, 14 February 1995) the Tribunal found that the dredging of sand for use as concrete aggregate was mining for minerals. The Tribunal’s reasoning included at [45] [47] that as desirable qualities of the sand such as durability, density, hardness and inertness were related to its mineral content, and the content of the sand was 90% silica in the form of the mineral quartz, and the dredging method may be described as mining, that Neumann Sands was mining for minerals, ie the quartz. The Federal Court dismissed an appeal from that decision in Collector of Customs v Neumann Sands (Victoria) Pty Ltd (1996) 136 ALR 584.
21. In Re Water Authority of WA and Collector of Customs (1995) 37 ALD 600 the AAT found that the extraction of ground water for use in a town’s water supply was mining for minerals , and therefore eligible for DFR.
22. The Tribunal was informed that following Neumann Sands the respondent received several hundred DFR applications which cumulatively claimed DFR in respect of almost all the quarries in Australia involved in the extraction of hard rock aggregates, gravel and sand for construction purposes, going back to 1 August 1986. Many of the claims were lodged by two major construction materials groups, Boral and CSR.
1995 and 1997 Amendments
23. In the Tribunal’s view it was the 1995 AAT decisions in Neumann Sands and in Water Authority that moved the Government to introduce the 1995 amendments to the definition of “minerals”.
24. The Customs and Excise Legislation Amendment Act 1995, No 87 of 1995, (CELA 1995) amended the definition of minerals by adding the words except sand, sandstone, soil, slate, clay (other than bentonite or kaolin), basalt, granite, gravel, limestone and water.
25. The Customs and Excise Legislation Amendment Act 1995, No 21 of 1996, relevantly amended CELA 1995 by introducing an exception to the limestone exclusion for agricultural use limestone , ie limestone used in the de-acidification of agricultural land, with retrospective effect from 1 July 1995. The minerals definition applicable since 1 July 1995 (and in this matter) is therefore:
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).
26. The Customs and Excise Legislation Amendment Act (No. 1) 1997, No 97 of 1997 amended the definition of mining operations so that it relevantly read, from 1 August 1997:
mining operations means
(a) exploration, prospecting or mining for minerals, or the removal of overburden
and other activities undertaken in the preparation of the site to enable mining
for minerals to commence; or
(b) operations for recovery of minerals, being:
(i) mining for those minerals including the recovery of salts by
evaporation; or
(ii) the beneficiation of those minerals; or ores bearing those minerals;
and includes
...
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.
27. Relevantly, the 1997 amendments considerably widened the quarrying exclusion at the end of the definition of mining operations.
28. The 1997 amendments also introduced a new subsection (7A) that provides:
(7A) For the purposes of the definition of mining operations, operations for the recovery of a mineral cease:
(a) when the process of beneficiation ceases; or
(b) in the absence of a beneficiation process when the mineral or ores
bearing the minerals:(i) are first stockpiled or otherwise stored at the place at which the mining operation is carried on; or
(ii) if subparagraph (i) does not apply are removed from the ore
body or deposit.
29. There have been no further relevant changes to the definitions of mining operations and minerals since 1997. On 1 July 2003 the Energy Grants (Credits) Scheme Act 2003 No.53 of 2003 commenced and the diesel fuel rebate provisions of the Customs Act 1901 were repealed, subject to savings provisions. Grants are payable under the current Energy Grants (Credits) Scheme Act 2003 for fuel used in mining operations as defined in relevantly identical terms to s.164(7) of the Customs Act 1901 as it was from 1 August 1997. (See the definition of mining operations in s. 11, the definition of minerals in s. 20, and the entitlement provisions in s. 51 and s. 56.)
Boral and CSR
30. Two cases involving the quarries claims mentioned above proceeded to hearing under the pre 1 July 1995 legislation. Customs’ decisions to refuse those claims were upheld in two AAT hearings: Re Boral Resources (NSW)Limited and Chief Executive Officer, Australian Customs Service (1996) 43 ALD 380 and in Re CSR Limited and Chief Executive Officer, Australian Customs Service (1997) 46 ALD 746. These applications involved three different types of sites, ie hard rock quarries, sand and gravel quarries, and dredging operations. In each case the AAT applied the informed general usage test of Menzies J and found to the effect that:
a) The relevant sites were consistently referred to within the industry, including in the applicants own documents, as quarries (if on land) and not as mines ;
b) Similarly, the extraction of the materials was consistently referred to as quarrying , or as dredging , and not as mining ;
c) The materials extracted were consistently referred to as sand, gravel, stone etc, and not as a mineral or minerals ;
d) The applicants did not target particular minerals, nor did they test for a particular desirable mineral content, rather they sought sand, gravel and rock with appropriate physical properties for use as building materials. Importantly, the evidence established that the desired physical properties were not determined by the mineral content of the material; and
e) In the circumstances, the applicants were not engaged in mining for minerals.
31. CSR and Boral both appealed. The Full Federal Court dismissed CSR’s appeal in CSR and Metromix v CEO of Customs (1997) 48 ALD 7, finding that the Tribunal did not err in adopting the informed general usage approach. Boral then withdrew its appeal, and the Tribunal was informed that the other AAT applicants seeking DFR in relation to the extraction of building materials also generally withdrew. It appears that, in effect, the result of Neumann Sands was reversed, on the better and more extensive evidence that was presented in the Boral and CSR cases.
Cases on the exception from Minerals
32. Following the 1995 amendments, the respondent ceased paying rebate for limestone and clay extraction operations. Many DFR claimants applied to the AAT for review.
33. Three matters have been decided on the exception from minerals each involving whether the exception of limestone applied.
34. Two limestone cases initially proceeded to hearing in the AAT. David Mitchell involved the extraction of limestone for use in making lime. Goliath involved the extraction of limestone for use in making cement.
35. The Tribunal found against Customs in both cases: Re David Mitchell Ltd and Chief Executive Officer of Customs (1998) 51 ALD 389; and Re Goliath Portland Cement Company and Chief Executive Officer of Customs (1998) 53 ALD 659. Each Tribunal found that "...the purpose of the extraction process is to obtain the mineral calcite", a mineral contained in the limestone, and the mineral lime.
36. The respondent won both of the initial subsequent appeals determined by single Judges of the Federal Court.
37. Goliath’s subsequent appeal to the Full Court was dismissed in a unanimous decision: Goliath Portland Cement Co Ltd v Chief Executive Officer of Customs (2000) 101 FCR11, on the basis that the limestone exception applied.
38. David Mitchell’s appeal to the Full Court was upheld in part: David Mitchell Ltd v Chief Executive Officer of Customs (2001) 107 FCR 252. Spender J, with whom Gyles J agreed, held that the finding of the Tribunal that calcite was the mineral mined was open (at [25] and [32]). However, his Honour found that it was not open to the Tribunal to conclude that lime was a recovered mineral, on the basis that lime was not a natural mineral present in the limestone as mined (at [33], [35] and [43]). The result was that David Mitchell was entitled to rebate for the initial extraction of the limestone from the earth (at [38]), but not for the subsequent processing of the limestone to produce lime.
Adelaide Brighton Cement
39. Due to the contrasting results of the two Full Federal Court decisions in Goliath and David Mitchell, a third limestone case proceeded. The Tribunal, constituted by Deputy President Forgie, found for the applicant in Re Adelaide Brighton Cement Ltd and CEO of Customs (2002) 71 ALD 128. The Tribunal’s findings may be summarised as follows:
a) Klein Point lies on an extensive limestone deposit [5]. The material that Adelaide Brighton Cement obtains from Klein Point is generally known both by it and by others in the industry as limestone [45];
b) It is only limestone with particular qualities that is suited to Adelaide Brighton Cement's cement manufacture needs. Adelaide Brighton Cement aims 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%).[42]-[44];
c)Adelaide Brighton Cement ‘s object in mining was not to recover limestone. It was mining limestone for four specific minerals that the limestone contained. Its operations were for the recovery of four minerals, ie calcite, alumina, silica and haematite, that were required by it in its manufacture of cement. The operations were not for the recovery of limestone, and the limestone exclusion did not apply. [54]
d) The four minerals are recovered when they are stockpiled (at Klein Point). The subsequent processing of the limestone was not related to the recovery of the minerals, but to their use in the production of cement, and did not amount to beneficiation . [50], [52] and [53].
40. The Tribunal acknowledged that Adelaide Brighton’s Cement operations were materially indistinguishable from those the subject of the Goliath Full Court decision. However, the Tribunal found that DFR was payable in respect of the extraction of limestone up to the stockpile, when the minerals were recovered, but not for any subsequent transport to the cement plant or processing.
41. The Federal Court convened a special bench of five judges to hear the subsequent appeal to the Full Court of the Federal Court, on the basis that it might be necessary to resolve differences between the previous Goliath and David Mitchell Full Court decisions.
42. That special Full Court dismissed Customs appeal: CEO of Customs v Adelaide Brighton Cement Ltd (2004) 139 FCR 147. (Black CJ and Selway J dissented.) Tamberlin, Sackville and Finn JJ gave joint reasons. Their Honours findings may be summarised as follows:
1) The issue for the AAT to decide was whether Adelaide Brighton was mining for minerals, or for any of the excluded minerals. [111]
2) Where an operator excavates limestone with little or no concern as to the
precise mineral content of the limestone, there can be no doubt that the
operations should be characterised as mining for limestone. [114]3) Other cases, where an operator claims to excavate limestone in order to utilise the particular mineral compounds, as distinct from the limestone as such, may involve difficult questions of characterisation. It may be that a decision-maker could reasonably reach either conclusion. [115]
4) The Tribunal, in considering the characterisation question appropriately took into account a number of matters. It had to weigh factors such as the targeting of the four desired minerals against other considerations such as the absence of a process designed to separate any of the four minerals and the fact that Adelaide Brighton described its operations as mining for limestone. [117] [119]
5) It was open to the AAT to conclude that the respondent's operations involved mining for the four particular minerals rather than limestone. [117]
6) The conclusion that the AAT committed no error of law does not necessarily mean that every operation involving the mining of limestone for use in cement production is to be regarded as mining for minerals other than limestone. Other cases may not have the features that persuaded the AAT to make the critical findings in Adelaide Brighton’s favour. [120]
The approach to the exclusions from minerals
43. In the Tribunal’s view it seems clear that the approach to be applied in any consideration of the exclusions from minerals is that apparently accepted by the majority in Adelaide Brighton Cement at [111], ie, do the relevant operations involve mining for minerals or is the applicant rather mining, or quarrying, for one of the excluded substances, in this case for clay (other than kaolin)? That question is largely one of characterisation and fact for the Tribunal, to be resolved by a weighing of all relevant factors, as the majority discussed at [114] to [117]. It is therefore the objective purpose of Midland’s extraction operations that must be determined.
ISSUES
44. The main issue for the Tribunal is whether Midland’s extraction operations during the claim period constituted mining for minerals within the definition of mining operations , when throughout the claim period minerals was relevantly defined:
“minerals means minerals in any form, whether solid, liquid or gaseous
and whether organic or inorganic, except:
(a) clay (other than bentonite or kaolin)”
45. If the Tribunal determines (as it has done) that the answer to the main issue is “no” then no other issue would arise, and the decisions under review to refuse diesel fuel rebate should be affirmed.
Evidence and Tribunal Findings
46. The Tribunal heard evidence from a number of witnesses, including experts, called by Midland and the respondent.
47. As already indicated, in the Tribunal’s opinion, Midland’s key assertions as to the nature and in particular the purpose of its relevant operations are not supported by the evidence.
48. The Tribunal does not propose to provide a detailed analysis of all the evidence, much of which revolved around expert opinions as to the nature, properties and correct description of clay, kaolin, kaolinite and other materials. What follows is a summary of the relevant evidence which led to the Tribunal’s conclusions as set out below.
49. The evidence is that all of the material extracted by Midland in the claim period was used to manufacture what Midland describes as clay bricks.
50. None of Midland’s materials provided to customers state that it is extracting kaolin or illite or any other mineral. It consistently describes itself as extracting clay in its own material and that description is in accordance with usual commercial terminology.
51. Midland’s witness, Mr Glucina, in his first statement, says that his job was to conduct exploration for suitable clays and at page 157 of the transcript Mr Ackers another of Midland’s witnesses, conceded that Midland’s operations “would properly be described as quarrying or extracting clay”.
52. The evidence is that Midland’s relevant extractive industries licences and development permissions are all for clay. Not a single one is for kaolin, kaolinite, illite, silica or any other particular mineral.
53. Midland’s raw material and clay mix specifications set limits for several properties, being nine in total. Four of these are chemical, but they include no requirements for kaolinite, quartz or any other particular mineral content.
54. The physical properties were tested usually more than once a day, 3000 times a year, but the tests for mineral content in the claims period are rare indeed. A test for mineral content was obtained in January 2007, the XRD analysis across the spectrum of Midland’s clays. This was the first time that this done in that form. It was clearly done for the purposes of this litigation as a response to the respondent’s first witness statements.
55. There is simply no evidence of the mineralogy of the various clays that were in use during the claim period, 1995 to 1999. So whatever the position might be in 2007, there is no evidence that the mineralogy was the same in the claim period. The evidence shows that there was a broad range of clays, a broad range of mineral properties, different pits being opened and shut down and different methodologies in some cases.
56. In Adelaide Brighton Cement at para 91, on page 168 the finding was:
“Adelaide Brighton seeks to produce material from its operations at Klein Point in the following proportions: Calcite 85 per cent; silica 10.5 per cent; alumina 1.5 per cent; and haematite 1.2 per cent, other compounds are contained with the limestone excavated at Klein Point and Adelaide Brighton Cement seeks to limit the amounts of those compounds that it regards as deleterious to its cement production.”
57. There is no evidence in this case that Midland Brick sought to produce minerals in any proportions at any time, let alone at the clay pits.
58. Counsel for Midland Brick argued, in effect, that it is sufficient for Midland to say that it is mining for minerals in a general sense. However, the Tribunal notes that this is not what was alleged by Midland. The case as pleaded appears in the applicant’s statement of facts and contentions. In paragraph 4 it pleaded:
Midland conducts mining operations at various sites targeting certain principal minerals for use in the manufacture of bricks. Those principal minerals,” the Targeted Minerals” are kaolinite, illite and silica.
59. None of the evidence supported this assertion.
60. Further at paragraph 80 and 81 of the Statement of Facts and Contentions, it is claimed:
The required minerals are the target of the mining operations. These minerals are not impacted by the exclusions in respect to the definition of minerals.
61. In paragraph 81, it is pleaded in the alternative that the material Midland mines is kaolin and that kaolin is not excluded from the definition of minerals.
62. The Tribunal notes that in Adelaide Brighton in their Honour’s decision and reasons for decision, in paragraph 92, they stated:
The material obtained by Adelaide Brighton from Klein Point is known generally in the industry as limestone. However, it is only limestone with particular qualities that suits Adelaide Brighton’s needs.
63. However, the Tribunal also notes that these particular qualities are quite specific in very fine proportions as set out in paragraph 91. In paragraph 98 in reference to the AAT decision the Court said:
It was also satisfied that in extracting the material of Klein Point, Adelaide Brighton was mining for minerals. Those minerals being calcite, silica, alumina and haematite. It was not mining that material for limestone.
64. Then at 109:
As Adelaide Brighton pointed out, the AAT made a critical finding that in carrying on its operations at Klein Point, Adelaide Brighton was mining for four minerals, namely calcite, silica, alumina and haematite.
65. After saying that was a finding that was open to the Tribunal, at – commencing at paragraph 111 (this is the paragraph where the ratio decidendi is found in part) the Court said:
The Act doesn’t state that operations cannot be for the recovery of minerals unless those minerals are separated from the soil or from other minerals, whether at the point of stockpiling or at any other time. The current definition of mining operations requires the decision maker to consider in a case such as the present, whether the person has engaged in operations for the recovery of minerals, being mining for those minerals. In view of the exclusions from the definition of the minerals, the decision maker must also consider whether the mining has been for any of the excluded minerals, one of which is limestone.
66. Significantly the Court went on to say at 114:
An operator may excavate limestone with a view to stockpiling and using or marketing the product so excavated. For example, for building purposes. The operator may have little or no concern about the precise mineral content of the limestone. In these circumstances, there can be little doubt that the operation should be characterised as mining for limestone. This is so notwithstanding that the particular limestone comprises a number of identifiable mineral compounds. The operations would therefore be caught by the exclusion in paragraph b of the definition of minerals in subsection 164(7) of the Act and the diesel fuel rebate would not be payable.
67. The Tribunal finds that the evidence in this case when viewed objectively and applied consistently is to similar effect, that is namely that Midland was mining for clay and was, contrary to it’s assertions, not concerned about the precise mineral content of that clay, albeit that it contained various minerals.
68. As already noted, and as set out in more detail below the Tribunal finds that the facts of this case are significantly and materially different from those in Adelaide Brighton Cement.
69. The Tribunal notes that respondent’s expert witness, Sue Border, said under cross examination at transcript page 304 line 13
“I suggest to you, as a geologist it’s a little bit odd to accept that something is not a clay but then turn around for some purpose and suggest that it is a clay in a commercial sense?‑‑‑ Well, it’s a clay in a commercial sense in that they’re mining it under an extractive industry’s permit.
So would you say, for example, that if you happened to be mining on Crown land, it’s okay but if you’re mining the same where you need a mining lease, no, but if you happen to mine on private property?‑‑‑No, sorry, I didn’t mean that but what I meant is that they’re mining ‑ ‑ ‑
Well, it would be a bizarre result, wouldn’t it, if the characterisation of what you were doing depended upon whether it was on Crown land or whether it was on private property?‑‑‑
No but it’s commonly accepted that the characterisation of what you’re doing depends on what you’re doing it for. That is commonly accepted in the statistics, for instance, throughout Australia.”
70. The Tribunal finds that what Midland Brick is doing is mining clay for use in brick-making. That conclusion is supported by the evidence of Midland’s expert witness, Mr McKnight, who under cross-examination on the issue of characterisation said at transcript 189 to 90.
Clay is defined in terms of properties or plasticity and hardening upon firing?‑‑‑Yes.
Those properties are the properties exploited by brick makers in making bricks?‑‑‑Yes.
So brick makers are looking for clay that has properties of plasticity and hardening upon firing.
Continuing:
Those properties are expressly, by this definition, properties of the clay as a whole substance?‑‑‑Yes. In that context, yes”
Therefore those properties are properties of the clay as such. They are properties of the clay. In fact they are the – you heard Mr Ackers yesterday say that those two properties, plasticity and hardening, are the fundamental properties of clay. You heard that?‑‑‑Yes.
That was based on his practical point of view as a brick maker?‑‑‑Mm.
It seems that those two properties he identifies as fundamental properties are now in this most recent scientific definition?‑‑‑Mm.
Do you agree?‑‑‑Yes.
Further, the definition makes it plain that those properties are of the whole clay substance and not just the clay minerals in it?‑‑‑Yes.
Therefore I will put it to you; they are properties of the clay as such?‑‑‑Yes.
71. Mr McKnight agreed that the use of clay in making bricks is the use of the clay as such. This brings Midland within the parameters of paragraphs 111 and 114 of their Honours reasons in Adelaide Brighton Cement. The test in Adelaide Brighton Cement is a choice of two i.e. are Midland Brick mining for minerals or are they mining for clay? This is a question of characterisation and in the view of the Tribunal the evidence here is overwhelmingly to the effect that they are mining for clay.
72. In Adelaide Brighton Cement the evidence showed that the mining was for particular minerals in particular proportions. Each of the four minerals was controlled to within very narrow ranges and specifications. This is not the case here, as the evidence clearly shows.
73. It is clear in the Tribunal’s view that the ratio decidendi of Adelaide Brighton Cement is not to the effect that if mineralogy in the broad sense has a relationship to the clay mix, that requires a finding that there is mining for minerals. If this was correct, the exclusion of clay in the definition of minerals would have no practical application because every use of clay could be said to be dependent upon mineral composition.
74. With regard to Midland’s claims to be mining kaolin the Tribunal notes that the original witness statements, filed by Midland, contained but a single statement regarding kaolin – that was at paragraph 26 of Mr Prokopovich’s statement in which he said a clay body in which kaolinite is a principal clay mineral is known as kaolin. No specific claim was made in any of the original witness statements filed by Midland that any of the Midland clays were kaolin.
75. The Tribunal also notes that the only clays described as kaolin in any of Midland’s internal documents were those from Muchea i.e. the G, GG series of clays. However in their 2007 responsive statements, after respondent’s experts gave their first statements, Mr Prokopovich at 25 and Mr Glucina at 24 and Mr McKnight at 21, 26 and 31 in his second statements, in effect adopted Mr Prokopovich’s definition without referring to any published material to support it. Mr McKnight, at paragraph 56 of his statement, and Mr Prokopovich at 25 sought to apply that definition to the January 2007 XRD mineral tests commissioned for this case by Midland to claim that all the Muchea clays, the Toodyay and Red Hill clays, are kaolin. Neither Mr Prokopovich or Mr McKnight claimed that any of the mixed brown clays are kaolin in their statements, even though the 2007 analysis would indicate that the MBs and the MB Hoc and the MB premix clays would satisfy their definition as kaolinite is the principal clay mineral.
76. They clearly recognised that highly coloured brown clays are not kaolin. Mr Glucina applied the same definition but claimed that all Midland’s materials are kaolin, except only the MLS and MLR. Mr Collier said that when he used the term kaolin, he meant a clay with a relatively high level of kaolinite as a percentage of the clay body as a whole, which was a very different view to that taken by the other witnesses. He did not specify what would be a relatively high level, and he did not mention kaolin again in his statement, apart from the one reference at paragraph 3, subparagraph c - Mr Ackers did not mention kaolin in either of his witness statements, and he was the most senior of the three Midland employee witnesses.
77. The Tribunal finds that regardless of the geological definition of kaolin, as applied by reference to the XRD testing in 2007, there is simply no evidence of the mineralogy during the claim period. Midland has failed to establish on the evidence what the mineralogical composition of the clay was during that period.
78. As noted earlier it was agreed by Midland’s expert witness, Mr McKnight, at transcript 189 to 190, that the use of clay in making bricks is the use of clay as such. That is a very significant concession. This is so because the evidence shows that the latest scientific definition of clay is in terms of properties of plasticity at appropriate water content and hardening when dried or fired. Those two properties, which Mr Ackers described as the two fundamental properties of clay, are the properties of clay exploited in making bricks.
79. The evidence shows that those are also properties of the whole clay substance and not just the clay minerals in it. Both the plasticity property and the hardening property are affected by complex interaction of several different factors, and tests of properties of interest, being plasticity and hardening properties, are directly observed and measured by producing test bricks. There are a broad range of acceptable mineral compositions for brick manufacture, including quartz. Mr Prokopovich agreed with that at transcript 237, line 35, and transcript 238, line 10. At transcript 248, Mr Prokopovich agreed that kaolinite is a very common mineral, and that illite is the most abundant clay mineral in sediments, quartz the most abundant mineral in the earth’s crust, and that each of these minerals are present to a greater or lesser degree in most clay deposits.
80. None of Midland’s witnesses Mr McKnight, Mr Prokopovich or Mr Glucina could provide any references to support their definition of kaolin, which was to the effect that kaolin is any clay in which kaolinite is the principle mineral. For example, at transcript 141, it put to Mr Glucina:
“The XRD results don’t have any definitions, do they?‑‑‑Any definitions as such? No, not at all, correct. Well, they give you a range of samples for testing and parameters of what they’ve actually found in the samples.”
“Can you point me to any published material which supports your definition of kaolin?‑‑‑Not directly, no.”
“Can you do it indirectly off the – sitting here?‑‑‑No, I can’t.”
81. The Tribunal is of the view that this is a telling point. If references had been available to these gentlemen, all of whom were careful witnesses who were clearly experts in their field, to support those definitions, they would have been produced. Ultimately, Mr McKnight agreed with many of the points put regarding kaolin. He expressly agreed that Midland’s clays are not kaolin in the mineralogical sense, and are not kaolin in the most common sense of a particular traded commercial clay. Mr Prokopovich agreed that in the United States, Great Britain and to some extent, Australia, kaolin is one specific variety of kaolinitic clay, at transcript 254, line 35. At transcript 256, 35, he ultimately agreed with the preferred industry definition of kaolin. This is clearly inconsistent with the definition he put forward.
82. Dealing briefly with the evidence that related to the properties of clays, at transcript 191 at lines 35 to 45, Mr McKnight said that plasticity is affected by the type of clay mineral, particle size and shape, content of organic matter and soluble salts, and the amount and type of non clay minerals, and also the degree of crystallinity of minerals such as kaolinite. He agreed that the property of plasticity is complex and relates to a number of factors. The hardening property is also influenced by the complex interaction of a number of factors, including the total mineral composition, chemistry of the clay, including the presence of soluble salts and alkalis, and organic matter and carbon and particle size distribution.
83. He agreed with those propositions at transcript 192 and the top of 193. Then at 194, similarly, he agreed that drying shrinkage, firing shrinkage and loss on admission are each parameters generally measured through the production of briquettes in a laboratory furnace. Studies of many different clays have shown that these characteristics have a complex relationship with total mineralogy of the clay brick and in which every mineral constituent of the original clay plays a part – and he said in addition to those factors, particle size, distribution and the chemistry, including such things as soluble salts, which aren’t part of the intrinsic mineralogy, also play a part. Transcript 194, line 10.
84. Mr McKnight said that the drying performance of a clay is determined more by the total amount of clay mineral and particle size distribution than whether the predominant clay mineral is kaolinite or illite. See transcript pages 201 to 202.
85. There were a number of inaccurate statements made by Mr McKnight in the course of his evidence in chief, and he agreed that this was the case at transcript 197 to 198. He agreed that each of the following statements which were contained on page 1 of his first statement are inaccurate, firstly, the essential component of any brick clay is the mineral kaolinite, second, kaolinite imparts most of the physical properties necessary for brick forming, particularly the plasticity required, and thirdly, the response of the raw formed brick to firing is also fundamentally controlled by the kaolinite component of the brick mix. Those were the three statements. At page 197 of the transcript, that first statement is put to him at the bottom of page 197 by Counsel:
“Generally, an essential component of any brick mixture used in the chemical manufacture of bricks, is kaolinite?‑‑‑Yes.”
At the top of page 198
“Now, do I take it that by that modification, you agree that the first statement was inaccurate?‑‑‑Yes.”
“You also stated in your first statement kaolinite imparts most of the physical properties necessary for brick roll or brick forming, particularly the plasticity required for the extrusion process, which is overwhelmingly the dominant forming or shaping method is Australia. Now, as we’ve seen and you’ve agreed, plasticity is affected by a number of different factors. Do you agree that that statement as put is too general and inaccurate?‑‑‑As it’s put, I think that it probably is.”
86. Then in line 23, Mr McKnight said:
“In the context of a brick mix, having other than kaolinite in it, then that statement would be too general. If the mix was one of Midland’s mixes, which dominated by kaolinite, then the statement is a fair description of what’s happening.”
87. Counsel put:
“Well, in Midland’s mixes, some of them seem to have about 50 per cent kaolinite, and they also include some mica and various other minerals, fluxing minerals and so on, and you agree with the statement by Mr Prentice, which I put to you is more accurate, which you’ve attached to this statement, ‘studies of many different clays have shown that these characteristics, namely drying shrinkage, firing shrinkage and loss in ignition have a complex relationship with the total mineralogy of the clay brick in which almost every mineral constituent in the regional clays plays a part’ That’s a more accurate statement than to say it’s fundamentally controlled by kaolinite, isn’t it?‑‑‑Yes.”
88. At transcript 202, at line 40 to transcript 203, line 35, Mr McKnight agreed that when firing defects occurred, it’s usually the result of a combination of factors, clay minerals come in a range of sizes, and the size impacts on plasticity, with smaller particle sizes generally being more plastic according to Mr Prokopovich at transcript 241, line 20. As to tests, it is clear on the evidence that the the range of tests used by Midland and other brick makers are for properties of significance in the brick making process, and the range of tests regularly used do not include mineral content analysis, see for example, Mr McKnight, transcript 193, line 30. The test procedure of forming and using firing briquettes, provides a direct measurement of the plasticity and hardening properties.
89. The evidence shows that test procedure also allows several aspects of the hardening property to be directly observed, including drying shrinkage, firing shrinkage, fire colour, friability index, and test briquettes are done both on individual clays and on clay mixes, see Mr McKnight at transcript 194 to 195, Mr Prokopovich agreed that Midland’s tests are tests of physical properties, at transcript 244, line 35. As far as Bullsbrook materials are concerned, in cross-examination, Mr McKnight agreed that the Bullsbrook MLR and MNR materials are in fact fine grain materials, contrary to his second written statement at paragraph 20 in that statement. See transcript 197, line 15. He also agreed that the Bullsbrook materials obviously fire well, Mr McKnight’s evidence on kaolin could be summarised as follows, he was asked at transcript 20920:
“so there are no references, no text to support your definition, you have inferred it?‑‑‑Yes.”
90. Mr McKnight was familiar with the fact that there is a recognised kaolin industry which includes Imerys in Victoria, which produces very fine white clays for such usages as papers and ceramics. Transcript 207, line 40. He said it would be uncommon to refer to very brown clays as kaolin, even though some of the mixed brown clays of Midland would fit within his definition at transcript 208. He was asked why that was at line 43, and he said, “I don’t know, I can’t answer that.” He agreed that the Cornwall deposits from which recovery of kaolin may be as low as 10 per cent, may be more accurately referred to as kaolin deposits or kaolinised granite rather than as kaolin, transcript 210, line 40.
91. He also agreed the terms China clay and kaolin are used interchangeably in the industry, including the kaolin industry and ceramics industry, at transcript 212, line 25. He stated in relation to several different kinds of kaolinitic clays, they could be called kaolin loosely, he said, in the geological sense. See transcript 212.40. He agreed that the distinction drawn in the British Geological Facts Sheet between kaolin and other kaolinitic clays, is consistent with the way in which the term is used in the industry, at transcript 213, line 40. He could not provide any geological definition from a recognised geological text that was consistent with his definition. It is clear that his definition is not consistent with the commercial usage of the term, kaolin, in the sense of a commercial clay product. He said that:
“Kaolin is clearly used in a commercial sense for a refined – a fairly extensively refined and beneficiated product –“
see transcript 219 line 30 –
“and it is used in the field for a clay type.”
92. Mr McKnight agreed that Midland’s clays are not kaolin in the mineralogical sense of the term – at transcript 219, 40. That mineralogical definition, although he considers it inaccurate, and he’s dealt with that in paragraph 24 of his second statement, is found in geological dictionaries but his definition is not, he agreed at transcript 220 line 30. Kaolin, as a mineral commodity used in industry refers to the refined kaolin products and none of Midland’s clays would be described as kaolin in that sense – see the transcript 222 line 40.
93. There is a recognised kaolin industry that produces refined kaolin products that are referred to and traded as kaolin – transcript 223, line 10. He was asked about kaolin products other than in ceramics, whether they were essentially monomorillonitic kaolinite or calcined kaolinite and he said most – the majority are at transcript 233, line 35. He agreed with Sue Border’s statement as to the typical requirements for ceramic-grade kaolin which she set out at paragraph 108 of her second statement. He agreed with her in his evidence at transcript 224, line 15. He agreed at transcript 225, line 20, that Midland’s clays do not satisfy any known commercial specification for kaolin. He also agreed that Midland’s clays are not kaolin in the most common sense of an industrial mineral commodity.
94. Mr Prokopovich said that he had no qualifications or experience as a mineralogist or geologist and had no experience in the mining industry at transcript 234. His opinion seemed to be based on an article that he didn’t provide to his report and didn’t produce to the Tribunal regarding some kind of kaolinitic products supplied from the Czech Republic being described as raw kaolins. Transcript 248, 249. There were a couple of references which refer to kaolin as a clay containing certain proportions of kaolinite to which he referred at transcript 254, line 10. Mr Prokopovich did agree with the Encyclopaedia Britannica definition of kaolin in his evidence at transcript 251 and 252. That definition, however, is inconsistent with his definitions.
95. With regard to Mr Ackers’ evidence at page 151, line 36, he was taken to paragraph 15 of his first statement in the final sentence “the presence of a suitable proportion of silicon”. He was asked:
“You refer to there it’s a balance of plasticity. That reference to suitable proportion of silicon, what are you referring to there? What proportion of quartz are you referring to as suitable?”
He said:
“Well, typically you need something in the range of 20 to 50 per cent of quartz in a clay body to be easily managed in a brick-making process. I’m sure there are cases where it’s either side of that but that would be a normal sort of range.”
96. It is clear that the percentage of that mineral which is required is in a very, very large range. It doesn’t matter to the brick-maker much whether it’s 20 or whether it’s 50. That’s the normal range. He would say so, he said.
He then said in his statement:
“The physical characteristics and mineralogical composition of the clay in each bay is well understood before it’s used in a blend.”
He was asked :
“How is it understood? What did you mean by that?”
He said:
“Well we work with these clays for a long time. We do a number of tests on them to understand how the clay is going to behave and in some instances we will refer to mineralogy with data that we have as well. In many instances, we would look at the physical characteristics such as its shrinkage characteristics, whether it’s cracking or what colour it might be, all the simple tests that we do that give us a tag on how that clay will behave.”
97. It was put to him:
“Now we’ve had evidence of the raw material specifications and the physical properties that are tested for in those specifications. They’re the regular tests that are conducted by Midland are they not?‑‑‑That’s right.”
98. He went on to say that he couldn’t remember the exact number but it was a large number and the also went on to say that the physical characteristics are frequently tested.
99. Then it was put to him at 154 that there were, in fact, only three mineralogical tests that were, in fact, conducted by XRD analysis during the claim period. This is clear from the document attached to the applicant’s statement of facts. That document was put him and he was asked about the three tests that were conducted during the clay period and he said at line 15 - one of them referred to a Camberlyn clay. He said he’d never heard of it so that must have been something that came and went.
“Camberlyn clay is a property I’ve never heard of so it must have come and gone before I joined the company.”
100. He was asked about Vern Redell. He said:
“Never heard of it. Must be named after the property owner, I assume and it is not someone I am familiar with.”
101. Then at line 40:
“Is it the case that you were able during the years 1983 to 1986 to secure clay for a new Perth brick manufacturer when other manufacturers had been operating in the area for decades?‑‑‑Yes, that’s true. I’d already worked for one of those manufacturers so I had some knowledge of the area.”
102. Asked whether suitable clays were abundant in the area. He said:
“I wouldn’t say that. I had a lot of tags, like where the existing people pulled their clay from. First thing I do is go next door and the second thing I do is go next door on the other side.”
“So there was a history of brick making in the area, a history of clay extraction?‑‑‑Yes. It’s easy to follow a truck and figure out where it’s going. So it was quite easy to use existing information and also I’d worked at Whitemans Brick so I had an understanding of where the materials were from that employment.”
103. The evidence of Mr Glucina was that he can look at the sections and can identify almost by sight – he said almost by taste – he can determine whether or not the sample that he’s looking at will constitute suitable clay for use in brick making.
104. In cross examination of Mr Ackers Counsel put to him the quality control clay file and the document headed Limitations on Present Clay Mixes at line 33:
“You know what this table represents?‑‑‑Yes, it’s particle size limitations for the various mixes.”
“These are the only specifications on clay mixes that Midland produce, are they not?‑‑‑No.”
“Which are the other specifications?‑‑‑We have sulphur content, carbon content. They are listed on the left-hand bottom column.”
“Yes. Can you think of any others?‑‑‑No. They are the regular tests we do.”
105. At line 30, Counsel put to him:
“The size limits are obviously important to Midland?‑‑‑Yes. They are, yes.”
“Would you agree that properties including plasticity, green and dry strength, drying abilities, drying and firing, shrinkage, porosity and the texture of the final product are significantly influenced by the particle size distribution of the initial clay mix?‑‑‑Yes.”
“You also agree that particle size distribution of a mix is of importance as it affects the packing of particles and the porosity and texture of the mix?‑‑‑Yes.”
“You also agree that particle size distribution is a significant factor in the firing performance of clay-based ceramics?‑‑‑Yes.”
“So that a coarser texture is required for good drying and firing performance in bricks than in finer ceramics including tiles and whiteware, for example?‑‑‑It allows you to dry the material more quickly.”
“So particle size distribution in the starting clay mix plays a role in the drying and firing performance and the strength of the final product?‑‑‑Certainly. That’s why we control our crushing processes as well as we do.”
106. On page 159 at line 10, he said:
“The mixes weren’t on the basis of whether they were fine or coarse. They were made on the basis of properties that those clays gave me in making a brick and fineness or coarseness was probably the least of the considerations.”
“You were concerned principally about colour?‑‑‑I was concerned about dryability, I was concerned about performance in the kiln. I was concerned about firing time. I was concerned about colour, yes.”
“So you would have regard to the physical properties that we’ve seen on the raw material specification sheet?‑‑‑I would have a what?”
“You would take into account all of those properties that we’ve been looking at on the raw material specifications?‑‑‑That’s right. Those physical properties, yes, plus maybe sulphur and carbon, yes.”
107. This is a very clear statement of the significance of the interrelationship between those physical properties and the manner in which they can be adjusted. The evidence shows how they can be adjusted, i.e. when Midland want to change a particular outcome in terms of the end product, the end, the look of it, the feel of it, they mix the batch recipes to suit accordingly.
108. At transcript 163, line 15:
“Do you agree with me that all of the clay attained by Midland during the claim period would have contained a significant proportion of one or more of kaolinite, illite and or silica?‑‑‑Yes, in varying proportions, yes.”
“What were the other minerals most commonly – apart from kaolinite, illite and silica?‑‑‑You get micas, some feldspars, you get things like some of the iron compounds and other bits and pieces, really, and each clay deposit is a bit different.”
“Would you agree with me that the desirable properties of clay for brick making include its ability to be shaped when wet, plasticity in other words?‑‑‑Plasticity is the fundamental property, yes, and to harden upon firing, that’s the other fundamental property, yes.”
“They are the two fundamental properties, yes?‑‑‑Absolutely, these are physical properties.”
109. He was then asked:
“Is that otherwise known as vitrification?‑‑‑ It is, yes.”
“Then those two properties coming together will produce a durable, strong, and hopefully an attractive brick?‑‑‑“Yes.”
“Is it the case that no material is separated from the clay in Midland Brick’s manufacturing process so that the entire clay is fed into a kiln and used in the manufacture of bricks?‑‑‑At the mining stage, we obviously remove the overburden, yes at the mining stage, we remove the clay or the pieces of the deposit that are of no use to us because it contains too much rock or too much of something else. Once it gets to the site, the only thing that normally gets removed is a piece of rock. If it’s too big or too hard, for the crusher. Beyond that, it all goes through.”
110. At line 14:
‘Do you agree with me that Midland’s extraction sites could be described as clay pits or quarries?‑‑‑Yes.”
At line 25:
“Do you agree that Midland’s extraction operations could properly be described as quarrying or extracting clay?‑‑‑Sure.”
111. In relation to tests for mineralogy Mr Glucina was asked at transcript 117:
“How many XRD results did you look at during the claim period?‑‑‑I can’t recall.”
“Can you recall whether you looked at any during the claim period?‑‑‑No, off the cuff I can’t recall.”
112. At 124 he was asked about the Muchea kaolinite, the GG black clay. He said:
“We’ve got the kaolinite SD to find a subdominant?‑‑‑That’s correct.”
“Next, most abundant but less than 20 per cent of the total?‑‑‑Yes.”
“So that at that time that test on the sample GG black the kaolinite was less than 20 per cent of the total ‑ ‑ ‑ ?‑‑‑Correct.”
“‑ ‑ ‑ on this test result?‑‑‑Yes.”
“That’s very different to the 60 per cent plus kaolinite figures for the Muchea claim in 2007 test data, isn’t it?‑‑‑Yes.”
113. This clearly demonstrates the extent to which the kaolinite figures can vary in similar clays when tested at different times over different periods.
114. At transcript 125:
“I was just testing your statement in your evidence that each of the materials had been of consistent composition over the last 28 years.”
At line 35:
“I’m putting to you that the documents show clearly that the composition does vary and vary markedly on your own documents. Do you agree with that?‑‑‑In the case of the information provided, yes, it does.”
At 129:
“There is evidential material to which I rely to support the following propositions: that there has been a variation in chemistry in the case of the iron component in RHD ranging from six per cent in 2007, 10 per cent in 2001 and 22.5 per cent on average in 2004. Do you agree with that?‑‑‑I do agree with the numbers, yes.”
115. Then at line 45:
“In the case of the mixed G the iron content is varied from 3.2 per cent in 2007, 7.4 per cent in 2001 and 5.4 per cent in 2004?‑‑‑I agree.”
Then at the top of page 130:
“In the case of GG the Fe 203 is 2.2 per cent in 2007, 3.4 per cent in 2001 and four per cent in 2004. Do you agree with that?‑‑‑I agree with the numbers, yes.”
116. So the evidence shows variation in the chemistry in that case in the iron component in that particular clay, the RHD clay. There is clearly a broad spectrum of clays, a broad spectrum of what is acceptable within a range, and the evidence shows the proportions of particular minerals varying very substantially from year to year, from sample to sample. All of this shows that what Midland Brick is concerned with is to identify suitable clays for use in brick making, not particular minerals as was asserted.
117. A series of publications by the Geological Survey of Western Australia which was tendered in evidence indicate that that organisation does not regard Midland’s clays as being kaolin even though it was well aware that some of Midland’s clays are white firing kaolinitic materials. See, in particular, Mr Kennedy’s second statement at paragraphs 48 to 53. It is clear from those publications that the Geological Survey has been well aware since at least 1975 that Midland and other brick companies extract white clays and has decided that they’re not kaolin. A series of publications consistently refer to such clays in terms other than kaolin. See, for example, the 1975 report at tab 1, Clay Resources of the Perth Region; the table at page 8 and pages 16, 17, 18 and 21 substantiates respondent’s witness Mr Kennedy’s evidence which he gave at paragraph 49. See also the extract from the 2002 volume Bentonite, Attapulgite and Common Clays in Western Australia at tab 3, particularly the description of Midland’s white firing materials at page 77. The distinction the Geological Survey draws between the white clays extracted by Midland and kaolin strongly substantiates the respondent’s witnesses’ evidence regarding kaolin.
118. With regard to mineral content Midland’s witness Mr Ackers said at transcript 151:
“There is a wide variety of abundant clay suitable for use in brick manufacture.”
and Ms Border said at transcript 292:
“It’s almost impossible to get clay without one or more of kaolinite, illite and quartz.”
TRIBUNAL’S CONCLUSIONS
Clay
119. The Tribunal finds that all the raw materials extracted by Midland were "clay", and that the exclusion from “minerals” does not apply.
Kaolin
120. Midland’s position appears to be that almost all the material it obtains is kaolin, based on the proposition that [a] clay body in which kaolinite is the principal clay mineral present is kaolin.
121. That proposition is a matter of disputed expert evidence. However, the Tribunal rejects that proposition. In the Tribunal’s opinion the correct finding on the weight of the evidence is that clay in which kaolin is the principal clay mineral is properly described as kaolinitic. Only some kaolinitic clay is properly or usually described as kaolin.
122. The evidence also shows kaolin is an internationally recognised and traded mineral commodity, being a particular kind of fine white clay, which always contains a high percentage of fine particle-size kaolinite. The commercial uses of kaolin include porcelain, ceramics, paints and paper coating. Specifications for material sold as kaolin typically include requirements for whiteness (measured in degrees of brightness), and very fine particle size restrictions. The tests that are conducted to ensure that the products meet those specifications are different to the tests that Midland conducts.
123. Further the evidence shows that the production of kaolin almost always involves extensive beneficiation to concentrate the kaolinite. The kaolin that is sold as such always has a high kaolinite content, and always has a fine particle size. In contrast the clays which Midland claim to be kaolin are natural clays which have not been beneficiated, do not have a very high kaolinite content, and are very coarse compared to kaolin. Further, some of the claimed "kaolin" clays are brown and fire brown or red, and are therefore very different from any material described in the literature as kaolin.
124. Commercial terminology within the mining and minerals industry generally distinguishes between kaolin and brick clay. There may be some rare examples where a true kaolin, a fine white clay suitable for use in such applications as paper coating and fine ceramics, is used in brick manufacture, but there is no substantial evidence that Midland's clays would be so regarded. The weight of evidence indicates that Midland's coarse kaolinitic clays would not be regarded as kaolin by the mining industry, or the wider commercial community.
125. Except in the case of land alienated in fee simple prior to 1 January 1899, all minerals as defined by s.8 of the West Australian Mining Act 1978, are the property of the Crown, for which the WA Mining Act requires, inter alia:
125.1 an exploration lease before any exploration is carried out;
125.2a mining lease to be obtained before any mining operations may be undertaken;
125.3 a quarterly production report of any minerals produced; and
125.4the payment of royalties, (of 5% of the royalty value in relation to kaolin).
126. The definition of minerals in s.8 of the WA Mining Act excludes, if occurring on private land, clay, other than kaolin, bentonite, attapulgite or montmorillonite . This exclusion from minerals in the WA Mining Act relevantly takes the same form as the exclusion from minerals in the Customs Act definition. Both definitions exclude clay, other than kaolin. It would be a strange result for Midland to be regarded as mining for kaolin under the Commonwealth Legislation, if it is not so regarded under the WA legislation.
127. Midland has not produced any evidence to show that it has ever applied for any exploration lease for "kaolin". Midland has not applied for any mining title under the WA Mining Act to extract "kaolin". Nor has Midland paid royalties for any kaolin produced, or reported that it has produced any kaolin. These facts are a substantial indication that none of the material Midland extracted during the claim period was kaolin. If Midland was mining for kaolin, it could reasonably be expected that Midland would comply with the relevant WA State legal requirements and/or that the WA Department of Minerals and Energy would impose those requirements.
128. Further, as already mentioned the series of publications by the Geological Survey of Western Australia indicate that organisation does not regard Midland's clays as being kaolin, even though it was well aware that some of Midland's clays are white firing kaolinitic materials.
129. The Tribunal is of the view that kaolin should be given its usual commercial meaning within the mining and minerals industry as described and illustrated in the evidence filed for the respondent.
130. That evidence clearly shows that the clay extracted by Midland during the claim period was not kaolin within the usual commercial understanding of that term, and that Midland’s operations are not regarded commercially, or by the relevant WA authorities, as mining for kaolin .
131. The Tribunal finds that none of the clay Midland extracted in the claim period was kaolin, and Midland was not "mining for kaolin".
The purpose of Midland’s extraction operations
132. The Tribunal finds that either all or most of the material extracted by Midland in the claim period was clay and was not kaolin. In relation to this material the Tribunal finds that the objective purpose of Midland’s extraction operations was for clay and not for the minerals kaolinite and quartz (and perhaps some other minerals contained in the clay) as Midland asserts.
133. The Tribunal’s findings having regard to all relevant factors may therefore be summarised as follows:
133.1All of the material extracted by Midland in the claim period was used to manufacture what Midland accurately described as clay bricks ;
133.2 Clay brick manufacture is a traditional and common use of clay;
133.3Midland consistently described the material it extracts as clay , and this description is in accordance with usual commercial terminology;
133.4Midland’s relevant extractive industries licenses and development permissions are for clay , they are not for kaolin, kaolinite, illite, silica or any other particular minerals;
133.5Midland’s raw material and clay mix specifications set limits for several properties (the specified properties) but do not include any requirements for kaolinite, quartz or any other particular mineral content;
133.6The specified properties are largely physical properties of clay, with the only chemical requirements being pH and limits for salt, carbon and sulpur;
133.7Midland regularly tests the specified properties, but rarely tests for mineral content;
133.8Kaolinite, illite and silica are geologically abundant. Almost all clays contain a significant proportion of one or more of these minerals. Clays which do not contain a significant proportion of one or more of these minerals are relatively rare;
133.9The suitability of clay for brick manufacture is influenced by, but is not determined by, its kaolinite, illite and silica content. Factors which influence the suitability of clay for brick manufacture include:
133.9.1 particle size distribution;
133.9.2the total mineral composition (and not just the kaolinite, illite and silica content); and
133.9.3the total chemical composition, including the presence of undesirable impurities such as soluble salts, carbon and sulphur.
133.10All the clay obtained by Midland during the claim period would have contained a significant proportion of one or more of kaolinite, illite and/or silica. However, the clays also contained other minerals, sometimes in significant proportions. The precise mineral content of the clays extracted by Midland during the claim period is largely unknown, since few tests of mineral content were conducted;
133.11The desirable properties of clay for brick making, include its ability to be shaped when wet (plasticity), and to harden upon firing (vitrification) to produce a durable, strong and attractive brick. These desirable physical properties are of the clay as such;
133.12There are a wide variety of geologically abundant clays, with a diversity of mineral composition, that are suitable for use in brick manufacture;
133.13It is the overall properties of a clay that determines suitability for clay brick manufacture, and not merely its kaolinite, illite and silica content;
133.14No material is separated from the clay in Midland’s brick manufacture process. The entire clay is fed into the brick kiln, and used in the manufacture of clay bricks.
134. Taking all relevant factors into account the Tribunal finds that the objective purpose of Midland’s extraction operations should be characterised as being for clay, rather than for kaolinite, illite and silica .
135. The Tribunal further finds that mining for the minerals kaolinite, illite and silica (or mining for any other particular set of minerals) is both an inaccurate and unnatural description of Midland’s extraction operations. The operations are clearly not so described commercially. In contrast, mining or excavating for clay is both an accurate and natural description of Midland’s extraction operations, and in accordance with the usual commercial description of such operations.
136. The applicant’s claim requires that Midland’s operations of obtaining suitable clay for use in the manufacture of clay bricks be characterised as not being for clay . That position is contrary to logic and common sense.
137. In the Tribunal’s view most of the technical evidence regarding how kaolinite, quartz and other minerals influence the suitability of clay for brick making is in the end of marginal significance to the issue the Tribunal has to determine. In the Tribunal's view, Midland's case generally exaggerates the importance of particular minerals compared to other factors such as particle size distribution. Cutting through that technical dispute, it is common ground that there are other factors in determining whether a clay is suitable for brick manufacture besides the content of a few particular minerals.
138. Further, it is clear that a variety of clays, with diverse mineral composition are used to manufacture clay bricks. Regardless of precisely how important mineral content is, the finding of the Tribunal is that Midland's objective purpose was to obtain suitable clay for clay brick manufacture.
Different facts to David Mitchell and Adelaide Brighton Cement
139. David Mitchell produced lime, by burning limestone in kilns.
140. There was no dispute that in order to produce lime by calcination it is necessary to feed calcium carbonate (CaCO3) to the kiln. The calcium carbonate is in the form of calcite which is present in the limestone together with other materials. Both parties agreed calcite is a mineral.
141. Similarly, in Adelaide Brighton Cement calcite was absolutely required to manufacture cement. However, other minerals were also required for cement manufacture. The Tribunal found that Adelaide Brighton s mining operations sought to produce limestone containing calcite (85%), silica (10.5%), alumina (1.5%) and haematite (1.2%). To achieve that objective Adelaide Brighton conducted a sophisticated process which involved exploration drilling, mapping the results of chemical analysis on SURFAC mining software, selective mining, blending of limestone from different areas, and extensive XRF chemical testing including of samples taken at 2m intervals from each exploration drillhole and of samples taken from each truck load taken to the product stockpile.
142. In both Adelaide Brighton Cement and David Mitchell:
142.1 The requirements for the material sought were entirely chemical, and directly determined by mineral content. There were no requirements for physical properties such as particle size or colour;
142.2 The tests conducted were all tests for mineral content; and
142.3 In those circumstances it was clearly open for the Tribunal to find that certain minerals were targeted, and that the applicants were mining for those minerals.
143. In contrast, in this matter, Midland’s specifications for individual clays and for clay mixes do not include any requirements for kaolinite, illite or silica content. Midland rarely tests for mineral content, but regularly tests the specified properties, which are largely physical.
144. Further, in both David Mitchell and Adelaide Brighton Cement, the Tribunal took into account that calcite can be sourced from materials other than limestone (including marble and sea shells) in finding that the applicants were not mining for limestone as such. The applicants were indifferent as to whether the calcite source was limestone.
145. In this matter the Tribunal finds that Midland does require clay, as such, to manufacture clay bricks. There is no evidence of alternatives to clay in the manufacture of clay bricks as there were alternatives to limestone in the manufacture of lime and cement. It is clay, and not just some of the minerals in the clay, that is required and used to manufacture clay bricks.
146. In the opinion of the Tribunal the critical factors that led the Tribunal to find for David Mitchell and Adelaide Brighton Cement are not present in this matter.
DECISION
The Tribunal affirms the decisions under review.
I certify that the 146 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member
Signed:…..(sgd)…T Freeman............
Associate
Date/s of Hearing 23-27 June 2008
Date of Decision 31 July 2008
Counsel for the Applicant Mr J De Wijn QC and Ms L Strk-Lingard
Solicitor for the Applicant Mallesons Stephen Jaques
Counsel for the Respondent Mr S Owen-Conway QC and Mr R Northcote
Solicitor for the Respondent Australian Government Solicitor
Key Legal Topics
Areas of Law
-
Administrative Law
Legal Concepts
-
Judicial Review
-
Statutory Interpretation
0
8
0