Laterite clay is used by home aquaria hobbyists who have planted tanks. There is an enthusiastic sub-set of the pastime which is as interested in live plants as in fish. Many of them consider laterite as a beneficial and desirable additive for plants, and it is added to the substrate of fresh water tanks in order to provide iron, and a trace element chelating location. Even after the available iron is consumed, the clay continues to serve a nutritive purpose in the tank. The fact that the clay does not contain nitrogen and phosphorous or indeed any organic matter, is a good thing as most aquaria have an excess of these nutrients due to the fish load. Thus, laterite will not cause algal blooms, or contribute to a spike in ammonia. Although, occurences may be indirectly linked to it if one neglects to siphon the tank gravel because one does not wish to stir up the laterite.
Laterite is a relatively expensive substrate additive, and is usually available as a powder, and sometimes in pre-formed balls. For new tanks, the powder is mixed with the base gravel or sand and then the mixture is top-dressed with a cosmetic as well as anchoring layer of gravel or sand. All of this occurs prior to the addition of water. One can also make balls out of the powder by mixing the clay with a quantity of water, shaping it into small pieces about 1 inch in diameter, and then drying them in the oven at a low temperature. The balls can be pushed into the existing substrate of an established tank or placed next to 'special' plants upon which one wishes to lavish extra care and attention.
The clay is very light and will cloud the water column and film surfaces inside the tank as it settles out, so one must be careful when disturbing the substrate or adding water to a new tank setup. It can take several days for heavy clouding to clear naturally, without additional filtration or a water polisher. It is not appropriate for use with under gravel filters (UGF).
With thanks to thekrib.com for teaching me my fish stuff.