Commissioner for the South African Revenue Service v Glencore Operations SA (Pty) Ltd

Glencore Operations SA (Pty) Ltd is a mining company holding mining rights under the Mineral and Petroleum Resources Development Act 28 of 2002, conducting coal mining operations in Middelburg, Mpumalanga. Glencore uses various vehicles, plant and equipment that use diesel in its mining operations. Glencore submitted claims to the Commissioner for the South African Revenue Service for refund of fuel levies (diesel fuel levy and Road Accident Fund levy) paid on diesel used in its operations for the period from August 2011 to 13 December 2013. The government had introduced a diesel fuel concession for own primary production activities in various sectors including mining, pursuant to section 75(1A) of the Customs and Excise Act 91 of 1964 read with Item 670.04 in Part 3 of Schedule 6. To qualify for the rebate, the diesel must be purchased for and used for own primary production activities in mining as defined in Note 6(f)(ii) and (iii). The Commissioner disallowed some of Glencore's claims on the grounds that the diesel was not used in "own primary production activities in mining" as contemplated in Note 6(f)(iii), but rather in secondary production activities. Glencore's diesel-using activities included: transporting coal from the pit to stockpiles, feeding coal by conveyor belt to crushers, crushing coal to specified sizes, loading discard and by-products, moving coal from stockpiles via feeders to the plant, maintaining conveyor belts and plant equipment, returning discard to the pit, conveying washed coal to stockpiles or railway siding, and loading coal onto train wagons. Glencore appealed the Commissioner's determination to the Gauteng Division of the High Court, Pretoria, which upheld the appeal and set aside the Commissioner's determination. The Commissioner sought and obtained leave to appeal to the Supreme Court of Appeal.

• What is the proper interpretation of the expression 'own primary production activities in mining' as used in Note 6(f)(ii)(aa) of Part 3 of Schedule 6 to the Customs and Excise Act 91 of 1964?
• Whether the list of activities set out in Note 6(f)(iii) of Part 3 of Schedule 6 to the Act which qualify as own primary production activities in mining is exhaustive or non-exhaustive?
• Whether Glencore's mining operations in relation to which diesel refunds were claimed qualify as own primary production activities in mining entitling it to refunds of fuel levies?
• What is the proper interpretation of the word 'include' located in Note 6(f)(iii) in the context of determining whether the list of qualifying activities is exhaustive?

The appeal was upheld with costs, including the costs of two counsel. The order of the high court was set aside and substituted with an order dismissing Glencore's application with costs, including the costs of two counsel where so employed. This means the Commissioner's original determination disallowing Glencore's claims for diesel levy refunds was reinstated.

The binding legal principles established are: (1) The list of activities in Note 6(f)(iii) of Part 3 of Schedule 6 to the Customs and Excise Act 91 of 1964 that qualify as 'own primary production activities in mining' for purposes of diesel fuel levy rebates is exhaustive, not non-exhaustive; (2) The word 'include' in Note 6(f)(iii) is used to make the definition of 'own primary production activities in mining' more precise by comprehensively listing qualifying activities, not to extend its meaning beyond those listed activities; (3) Where a statutory list introduced by 'include' contains items that go beyond the primary meaning of the defined term, and where the list is comprehensive and detailed, the purpose is to carefully circumscribe the scope of the definition, indicating the list is exhaustive; (4) 'Primary production activities in mining' means activities associated with the extraction of minerals from the ground, as distinct from secondary activities that occur after minerals have been extracted; (5) Diesel fuel rebate provisions, being exceptions to the general revenue-raising fuel levy provisions, must be interpreted in a manner consistent with the broader fiscal framework and the Act's revenue objectives, which favors a restrictive rather than expansive interpretation of qualifying activities; (6) Activities involving the transportation and processing of extracted minerals (as opposed to ore or other substances containing minerals) after extraction do not constitute 'primary production activities in mining' within the meaning of Note 6(f)(iii).

Several non-binding observations were made: (1) The Court expressed a preference not to rely on ministerial budget speeches as aids to statutory interpretation where the language of the provision is clear and unambiguous, leaving open the question of in what circumstances such speeches may be consulted (paras 37-38); (2) The Court noted that the contra fiscum rule (resolving ambiguity in favor of the taxpayer) only applies where there is 'irresoluble ambiguity' after all conventional methods of contextual and purposive construction have been exhausted (para 18); (3) Petse DP noted that the evidence presented by Glencore was 'at best equivocal' and left a 'gaping factual void' as to the precise nature of its primary activities, making it impossible to determine eligibility for refunds on the primary argument (para 32); (4) Rogers AJA observed that certain listed items such as (nn) (reactivation of carbon for gold processing) and (vv) (rehabilitation) can be interpreted as consistent with 'primary production activities' when understood as referring to activities at the place of extraction or necessary prerequisites to extraction (paras 64, 68); (5) Rogers AJA commented that the main purpose of the list in Note 6(f)(iii) was to identify activities sufficiently closely associated with extraction of minerals from the ground to be included in the rebate scheme, resolving potential doubts about ancillary activities (para 71); (6) The Court noted that sub-paragraph (vv) regarding rehabilitation was only added to Note 6(f)(iii) in 2016 and therefore had no bearing on the interpretation for the period in question (footnote 19); (7) Glencore's argument regarding the existence of paragraph (d) in Note 6 (which explicitly excluded certain activities) as supporting a non-exhaustive interpretation was rejected without detailed analysis (para 35).

This case is significant for establishing the proper interpretation of the diesel fuel rebate scheme for mining operations under the Customs and Excise Act. It clarifies that: (1) The list of activities qualifying as 'own primary production activities in mining' in Note 6(f)(iii) of Part 3 of Schedule 6 is exhaustive, not open-ended; (2) The diesel rebate concession must be interpreted restrictively as an exception to the general revenue-raising purpose of fuel levies; (3) 'Primary production activities in mining' are limited to activities associated with extracting minerals from the ground, not post-extraction processing or secondary activities; (4) The word 'include' in a statutory definition must be interpreted contextually, and may introduce an exhaustive list where the purpose is to define precisely rather than to extend meaning; (5) Fiscal legislation providing for exceptions or concessions must be interpreted in light of the broader fiscal framework and revenue objectives. The case reinforces the importance of purposive and contextual interpretation of tax legislation, and provides guidance on when a list introduced by 'include' will be held exhaustive versus non-exhaustive. It is also significant for the mining industry in delineating which diesel-using activities qualify for fuel levy rebates, potentially affecting the cost structure and competitiveness of mining operations.