ATO Interpretative Decision

ATO ID 2003/819 (Withdrawn)

Excise

• This ATO ID is withdrawn and is replaced by ATO ID 2003/1046.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is 'talc' a mineral for the purposes of determining 'mining operations' as defined in subsection 164(7) of the Customs Act 1901?

Decision

No. 'Talc' is not a mineral for the purposes of determining 'mining operations' as defined in subsection 164(7) of the Customs Act.

Facts

Raw talc is extracted from the ground by open-cut methods using large mining excavation equipment. It is extracted in the form of large rocks and/or small boulders which the excavator at the mine site and grinding mills at a processing plant can handle.

After extraction, the raw talc is trucked to a processing plant where grinding mills reduce the particle size of the talc into very fine powder. The end product after processing is talcum powder which is then packaged, palletized and despatched to specific customers.

Reasons for Decision

The Australian Oxford Dictionary 1999, Oxford University Press, Australia, defines 'talc' as:

Any crystalline form of magnesium silicate that occurs in soft flat plates, usu. white or pale green in colour and used as a lubricator.

Thrush, P.W. in A dictionary of mining, minerals, and related terms (U.S. Department of the Interior 1968, page 1118) defines talc 'as a natural hydrous magnesium silicate (Mg3Si4O10(OH)2).'

'Mining operations' is an eligible activity for the purposes of the diesel fuel rebate scheme. Paragraph (b) of the definition of 'mining operations' in subsection 164(7) of the Customs Act defines that term as meaning 'operations for the recovery of minerals'.

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

minerals in any form, whether solid, liquid or gaseous and whether organic or

inorganic, except:

(a)

sand, sandstone, soil, slate, clay (other than bentonite or kaolin), basalt, granite, gravel or water; or

(b)

limestone (other than agricultural use limestone).

The Encyclopaedia Britannica (2002) states that the term clay is generally applied to:

1.

a natural material with plastic properties;

2.

particles of very fine size, customarily those defined as particles smaller that two micrometres (7.9 x 10-5 inch); and

3.

very fine mineral fragments or particles composed mostly of hydrous-layer silicates of aluminium, though occasionally containing magnesium or iron.

The Encyclopaedia Britannica recognises that the clay minerals referred to in (3) above can include virtually any mineral of the above-cited particle size. It then classifies clay minerals into nine categories on the basis of variations of chemical composition and atomic structure. One of these categories is the 'Pyrophyllite-talc group'. Thus the encyclopaedia is recognising that talc is a clay. Also, it distinguishes the pyrophyllite-talc group from the 'kaolin-serpentine' group (kaolin) and the 'smectite group' (bentonite).

Under paragraph 164(7)(b) of the Customs Act, clay (other than bentonite or kaolin) is specifically excluded from the definition of 'minerals'. Only the clays bentonite and kaolin are eligible for the purposes of the diesel fuel rebate scheme. As talc is a type of clay and is not included in the list of clays which are defined as minerals, then talc is not a 'mineral' for the purpose of determining whether its recovery constitutes 'mining operations' under the Customs Act. Therefore, the recovery of talc is not 'mining for minerals' and the recovery of talc is not a 'mining operation' for the purposes of the diesel fuel rebate scheme.

Legislative References:
Excise Act 1901
   paragraph 78A(1)(a)
   subsection 78A(7)

Related Public Rulings (including Determinations)
Excise Ruling FGRR 2002/1

Other References:
The Australian Oxford Dictionary 1999, Oxford University Press, Melbourne
A dictionary of mining, minerals, and related terms, compiled and edited by Paul W Thrush and the Staff of the Bureau of Mines: US Department of the Interior 1968.
Encyclopaedia Britannica (2002)

Keywords
DFRS mining
Diesel fuel rebate scheme
Excise
Excise Business Line
Excise Diesel Fuel Industry Group
Excise payments
Mining operations

Business Line:  Excise

Date of publication:  12 September 2003

ISSN: 1445-2782