ATO Interpretative Decision

ATO ID 2004/846 (Withdrawn)

Excise

Energy Grants (Credits) Scheme: off-road credit - minerals - attapulgite
FOI status: may be released

This ATO ID is withdrawn from 1 July 2012, the date the Energy Grants (Credits) Scheme Act 2003 was repealed.
Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of the period the Act was in force, 1 July 2003 up to and including 30 June 2012.

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Status of this decision: Decision Withdrawn 1 July 2012

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the clay, attapulgite, excluded from the definition of 'minerals' by paragraph 20(a) of the Energy Grants (Credit) Scheme Act 2003 (EGCSA)?

Decision

Yes. The clay attapulgite is excluded from the definition of 'minerals' by paragraph 20(a) of the EGCSA.

Facts

Attapulgite is defined in the Dictionary of Mining, Minerals, and Related Terms (Second Edition) as:

A light-green, magnesium-rich clay mineral, named from its occurrence at Attapulgus, GA, where it is quarried as fuller's earth.

Reasons for Decision

Section 20 of the EGCSA 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).

Given attapulgite is a clay, it will be excluded from the definition of 'minerals' in section 20 above unless it is either bentonite or kaolin. The following discussion will compare the chemical composition, crystal structure, classification, and origins and occurrences of attapulgite, bentonite, and kaolin as a means of determining whether attapulgite is bentonite or kaolin.

The following typical chemical characteristics of attapulgite, bentonite and kaolin show significant differences:

Attapulgite:	(Mg,Al,Fe)₅Si₈O₂₀(OH)₂(OH₂)₄.4H₂0 (MESA Journal #1, 1996) An alternative chemical composition is: (Mg,Al)₂Si₄O₁₀(OH).4H₂O (Dictionary of Geological Terms, 1976)
Bentonite:	(Al,Mg)₈(Si₄O₁₀)₃(OH)₁₀.12H₂O
Kaolin:	Al₂(Si₂O₅)(OH)₄ (Dictionary of Geological Terms, 1976)

However, in clay mineralogy, the crystal structure is probably more important than the chemical composition in determining the classification of minerals. Descriptions of the crystal structures of attapulgite, bentonite, and kaolin include:

Attapulgite:

'a rare fibrous clay mineral' (MESA Journal #1, 1996)

'clay with a chain type structure forming needle shaped crystals' (Industrial Minerals Handybook 1991)

'clay mineral characterised by rod or lath shaped crystals' (Dictionary of Geological Terms, 1976)

'fibrous open clay'

'needle like clay mineral' (Schlumberger Oilfield Glossary)

Bentonite:

'flake like' (Industrial Minerals Handybook 1991)

'three-layer clay'

Kaolin:

'plate like' (Industrial Minerals Handybook 1991)

'two-layer clay'

The descriptions outlined above show there are significant differences in crystal structure between attapulgite, bentonite, and kaolin. Given these differences, it must follow that the classification of attapulgite, bentonite, and kaolin are also different. These differences are reflected in the clay groups to which these three forms of clay have been classified. These classifications are:

Attapulgite:	'Attapulgite belongs to the Palygorskite group of clays' 'Attapulgite-sepiolite clay mineral group is known as the Hormite group' (Industrial Minerals Handybook 1991).
Bentonite:	'montmorillonite group of clay minerals' (Dictionary of Geological Terms, 1976)
Kaolin:	'kaolinite group of clay minerals' (Dictionary of Geological Terms, 1976)

Consideration of the origins and occurrences of attapulgite, bentonite, and kaolin also show significant differences:

Attapulgite:	'attapulgite is an important component of lake deposits which have salt-lagoon characteristics'
Bentonite:	'formed from alteration in situ of volcanic ash' (Dictionary of Geological Terms, 1976)
Kaolin:	'produced by the decomposition of other clays or feldspar'

Finally, the journal Industrial Minerals shows an alphabetical list of commodities and the price that they are commanding (for example in $/tonne) at the time of publication. This journal represents the industry perception and significantly, attapulgite, bentonite and kaolin are listed separately from one another. This shows the industry perception is these clays are different.

Conclusion

From the above discussion, the following points can be made.

1.: Apart from attapulgite sharing the definition of a clay with the minerals bentonite and kaolin, it is not related to them in terms of chemical composition, crystal structure, classification, origin and occurrence; and
2.: The non-metallic industry world wide recognises, from an economic point of view, attapulgite, bentonite and kaolin are separate types of clay.

Therefore, as attapulgite is a clay mineral but is neither bentonite nor kaolin, it is excluded from the definition of minerals by paragraph 20(a) of the EGCSA.

Date of decision: 2 October 2004

Legislative References:
Energy Grants (Credits) Scheme Act 2003
section 20

Other References:
Dictionary of Geological Terms, 1976, Anchor Books
Dictionary of Mining, Minerals, and Related Terms, 1997, compiled by the American Geological Institute
Industrial Minerals Journal, December 1990
Harben PW, Industrial Minerals Handybook, 1991, New York
Mines & Energy, South Australia, 1996, MESA Journal #1
Schlumberger Oilfield Glossary

Keywords
EGCS minerals
EGCS mining operation
EGCS off-road
EGCS recovery of minerals
Energy grants (credits) scheme
Excise
Excise payments

Business Line: Indirect Tax

Date of publication: 25 October 2004

ISSN: 1445-2782

history

	Date:	Version:
	2 October 2004	Original statement
You are here →	1 July 2012	Archived

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