bone char is used in the Sugar
industry to dechlorinate the sugar. here is some interesting info about that. more at link.
Almost all cane Sugar
refineries require the use of a specific filter to decolorise the sugar and absorb inorganic material from it. This whitening process occurs towards the end of the sugar refining procedure. The filter may be either bone char, granulated carbon, or an ion exchange system. The granular carbon has a wood or coal base, and the ion exchange does not require the use of any animal products (2).
Bones from cows are the only type used to make bone char. According to the Sugar Association and several large sugar producers, all of the cows have died of "natural causes" and do not come from the U.S. meat industry. Bone char cannot be produced or bought in the United States (3).
Bone char is derived from the bones of cattle from Afghanistan, Argentina, India and Pakistan. The sun-bleached bones are bought by Scottish, Brazilian, and Egyptian marketers, who sell them to the U.S. sugar industry after the bones are first used by the gelatin industry (4).
Bone is heated to an extremely high temperature, which results in a physical change in the bones composition. The bone becomes pure carbon before it is used in a refinery.
Refined sugar does not contain any bone particles and is therefore kosher certified. The bone char simply removes impurities from the sugar, but does not become a part of the sugar.
Individual pieces of bone char, like granular carbon, can be used for several years. They must be continuously washed to remove the sugar deposits. Companies that use bone char claim that the char is more economically feasible and efficient than other types of filters (4).
Many cane refineries use bone char. Domino, the largest sugar manufacturer, uses bone char in the filtration process. The cane refineries of Savannah Foods, the second largest sugar manufacturer, also use bone char. California and Hawaiian Sugar employs bone char filters in addition to granular carbon and ion exchange filters. All these companies use the bone char in the refining process of brown sugar, powdered sugar (sugar mixed with corn starch) and White Sugar