32 I have already indicated that, in my opinion, the Tribunal found as a fact properly open to it that the extraction process was the obtaining of the mineral calcite, and was thus mining operations. Insofar as Ryan J characterised that process as the recovery of limestone, he appears to have accepted that the view of Heerey J that 'limestone' and 'calcite' are, for the purpose of the definition of "mining operations", synonymous, in the sense that if one recovers limestone one recovers calcite, and vice versa, a view rejected by the Full Court in Goliath.
33 However, in my opinion, Ryan J was correct when he concluded that:
"the Tribunal erred in holding that the total integrated process to the completion of calcination included dressing and beneficiation for the recovery of a mineral other than limestone".
The error identified was an error of law. That error was the failure to apply the proper test of what constitutes "mining operations" in par (b) of that definition, in particular failing to give effect to the crucial requirement that any dressing or beneficiation of a mineral, or an ore bearing a mineral, had to be as an integral part of the process of recovery of that mineral.
34 Before calcining, the limestone was subjected to screening, crushing and picking to ensure that it had an acceptably high calcite content. Ryan J noted (at [37]):
"That feature would tend to support the characterisation of the process as the dressing or beneficiation of limestone, but not as part of operations for the recovery of calcite."
Even if one were to accept that the screening, crushing and picking was a dressing or beneficiation of calcite, that would still not be part of operations for the recovery of calcite. Rather, it would be the dressing or beneficiation of calcite for the recovery of lime, and therefore not within the definition (b) of "mining operations".
35 The end product of the extraction and calcination is lime, but lime is not mined at Lilydale or Loongana. On the finding of the Tribunal, what is mined at Lilydale and Loongana is the mineral calcite.
36 Further, in my opinion, the calcining process cannot be seen as mining operations in reliance on par (b) of the concept of mining operations, namely the dressing or beneficiation of minerals or ores bearing minerals as an integral part of operations for their recovery.
37 The Full Court in Goliath noted at [24]:
Central to the phrase 'mining operations' is the notion of the recovery of minerals: see Collector of Customs v BHP Australia Coal Limited (1994) 53 FCR 499; Federal Commissioner of Taxation v Broken Hill Proprietary Co Ltd (1969) 120 CLR 240; 120 CLR 267; The Commissioner of Taxation v ICI Australia Ltd (1972) 127 CLR 529. The phrase 'as an integral part of the operations for their recovery', which qualifies the extended meaning given to 'mining operations' in par (b) in that definition, underlines this. What one has regard to is the object of the operations undertaken: the end product: Broken Hill Co Ltd, 273, 274. Put another way, that is when the mining operation ends. So, in cases concerning the recovery of the mineral salt from brine pumped to the surface and subjected to evaporation, it has been held that mining operations were engaged in: ICI Australia, 557; Regional Director of Customs (WA) v Dampier Salt (Operations) Pty Ltd (1996) 67 FCR 108. The completion of recovery may be said to occur, and the mining operations conclude, when no further process is undertaken by the miner to separate the mineral from any material adhering to it or intermixed with it prior to sale: Abbot Point Bulk Coal Pty Ltd v Collector of Customs (1992) 35 FCR 371, 380; Collector of Customs v BHP, 508; FCT v Broken Hill Co, 245."
38 So viewed, mining operations in this case are at an end when the limestone containing the mineral calcite is extracted from the earth.
39 Recovery in par (b) of the definition of "mining operations" involves the freeing or separation of the designated mineral from the ore body in which it inheres, as Ryan J held. The observations of Barwick CJ in Federal Commissioner of Taxation v ICI Australia Ltd (1972) 127 CLR 529 at 567 are apposite:
"In the mining to recover many metals what is brought out of or up from the earth is a substance in which the metal is embedded or intermixed. The recovery of the metal is a process of freeing it from that total substance, in general referred to as the ore or ore body. A mineral is defined in the Shorter Oxford Dictionary as 'any substance which is obtained by mining. In early and modern technical use the ore (of a metal)'. It does not seem to matter whether the process of freeing the mineral is mainly physical or chemical. In general, the process of freeing the metal leaves on the one hand the metal and on the other a residue. I much doubt whether that residue, for example, the sand resulting from the flotation process used in the barrier mines, or the quartz after the removal of the gold in the case of gold recovered from reef gold or the dross after a cyanide process is properly called the ore or the metal's ore. That term, it seems to me, is properly used to describe the substance in which the metal has been found whilst still embedded in or intermixed with it. But the section treats that from which the metal is separated as the ore of the metal. But be that as it may, in general, the 'separation' of the metal leaves two physically identifiable substances, usually solids."
40 In my opinion, consistent with the observations of Barwick CJ, limestone is not an "ore" bearing the mineral "lime".
41 I respectfully agree with the conclusion of Ryan J that limestone is not capable of being characterised as an ore of lime.
42 The Act specifies that a mineral is something which is mined. The noun "minerals" has in its ordinary meaning the denotation of substances which can be won by mining. It appears from the definition of "mineral" as a noun in the Oxford English Dictionary that a "mineral" means "any substance which is obtained by mining; a product of the bowels of the earth". I agree with Ryan J that that denotation is reinforced by the definition of "mining operations" in s 164(7) with its concentration on "mining for minerals" and the "recovery" of minerals, of which is mining is regarded as an integral part.
43 Lime, as produced by the appellants, emerges after the calcining process of limestone. It does not occur naturally at the site of either phase of operations of the appellants, either in its own right or as a constituent of limestone. The lime is not "embedded" in or "intermixed" with the limestone, or with anything else. Lime is not "recovered" from the earth, and lime is not obtained by mining. It is obtained by calcining limestone.
44 I respectfully agree with Ryan J, when he observed:
"The fact that a synthetically produced substance may occur naturally elsewhere and, in those circumstances, be 'mined for', does not warrant equating the synthetic producer's activities with mining for a mineral."
45 In this case, lime is not "recovered" from its "ore" limestone: the limestone is not properly to be described as "the substance in which the lime has been found while still embedded in or intermixed with it". I acknowledge that in Chief Executive Officer of Customs v Tasmanian Electro Metallurgical Co Pty Ltd (1997) 76 FCR 476, Merkel J (at 489) held that it was open to the Tribunal to find that pyrolusite and cryptomelane were ores bearing manganese, and that it was open on the evidence for the Tribunal to conclude that:
s "the sintering and smelting operations at Bell Bay involved the beneficiation of a mineral or an ore-bearing mineral as an integral part of operations for their recovery
s manganese was a mineral
s the sintering and smelting operation at Bell Bay was a process of beneficiation of pyrolusite and cryptomelane, being ores bearing manganese, for the recovery of manganese in a form suitable for it use in steel making", being ferromanganese and silicomanganese.
46 His Honour further held (at 490) that the Tribunal was entitled to reject the submission that:
"…the processes at Bell Bay, involving chemical change and additives, were part of the process for manufacturing alloys rather than for the recovery of a mineral."
While I respectfully agree that the removal of impurities and the consequential improvement of a mineral concentration can form part of the "recovery" process, what has to be recovered is the mineral in the ore; I would, for myself, doubt whether the production of an alloy of the mineral in the ore could properly be described as the recovery of the mineral.
47 In Goliath, it was held that limestone was recovered and subjected to a process to produce cement. The Full Court said at [28]:
"In our view it could not be said that in this case that lime was a 'mineral' which was 'recovered'. Limestone is certainly recovered and the process which follows may be described as one of beneficiation of the limestone, but only as a part of a continuous process in the manufacture of cement …The whole process undertaken is one which goes well beyond the removal of impurities to recover any mineral. Whilst the nature of the process applied in recovery will not always be conclusive of the question whether a mineral has been recovered, what is required is that the mineral be present when the material in which it is contained was taken from the earth, as Ryan J points out in David Mitchell. It is in that sense that one views a process or processes of recovery and what is said to be a 'mineral': that which may be won by mining, albeit that other steps are necessary to render it useful or saleable. The fact that his Honour held limestone not to be an ore, which differs from the finding made here by the Tribunal, does not affect the approach otherwise taken. It is, in our view, highly artificial to speak of lime being 'recovered' in a process such as this because it was possible to physically remove it."
[My emphasis].
48 This reasoning supports the correctness of the decision of Ryan J that the par (b) definition of "mining operations" does not apply to the respondents' dressing and calcining operations.
49 To come within par (b) of "mining operations", what has to be dressed or beneficiated is the mineral which is recovered; or the ore bearing that mineral, which mineral is recovered. Here, what is recovered is lime, which is not that which is dressed or beneficiated. Nor is that which is dressed or beneficiated an ore of lime. Ryan J was correct to hold (at [37]) that "the Tribunal erred in holding the total integrated process to the completion of calcination included dressing and beneficiation for the recovery of a mineral other than limestone". It follows that neither appellant is entitled to a diesel fuel rebate in respect of the operations which involve screening, crushing and picking, and the calcining process itself.
50 Having regard to the terms of the decision of the AAT and of Ryan J, the appropriate orders to make on the appeal are as follows.
(1) The appeal be allowed.
(2) That each order of Ryan J of 19 November 1999 be set aside.
(3) That the decision of the Administrative Appeals Tribunal of 9 February 1998 be set aside and in lieu it be ordered that the reviewable decision in V96/607 and V96/1328 be set aside, and the matter be remitted to the Administrative Appeals Tribunal for reconsideration in accordance with the direction that diesel fuel rebate be assessed for payment in accordance with the reasons of this Court.
51 Since the appellants have been partially successful and therefore partially unsuccessful, a fair order as to costs is:
(4) that there be no order as to costs of the appeal, and no order as to costs of the proceedings before Ryan J.