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

Glencore Operations SA (Pty) Ltd, a coal mining company and holder of mining rights under the Mineral and Petroleum Resources Development Act 28 of 2002, used diesel fuel in various mining-related activities at its Mpumalanga mines between August 2011 and 13 December 2013. Diesel fuel is subject to the fuel levy and Road Accident Fund levy under the Customs and Excise Act 91 of 1964. The Act provides a rebate for diesel used in 'own primary production activities in mining' under s 75(1A) read with Item 670.04 and Note 6(f)(iii) of Part 3 of Schedule 6. Glencore claimed refunds of diesel levies for this period. The Commissioner for SARS disallowed part of the claims, contending that the diesel was used in secondary mining activities, not qualifying primary production. Glencore appealed to the Gauteng Division of the High Court, which upheld its appeal and set aside the Commissioner’s determination. SARS then appealed to the Supreme Court of Appeal.

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.

This judgment clarifies the scope of diesel fuel rebates available to mining operations under the Customs and Excise Act. It affirms a restrictive and purpose-driven interpretation of 'own primary production activities in mining', limiting rebates to activities closely connected to mineral extraction and excluding secondary or post-mining processes. The case reinforces orthodox principles of statutory interpretation in fiscal matters and confirms that tax concessions must be construed within their defined legislative purpose.