Information As An Alternative To Mineral Rights Taxation
Organization: The Southern African Institute of Mining and Metallurgy
Jan 1, 1999
A new system for granting access to mineral rights is proposed in the recently released White Paper, ?A Minerals and Mining Policy for South Africa?. Official policy states that ?Government?s long-term objective is for all mineral rights to vest in the State for the benefit of and on behalf of all the people of South Africa?. In order to achieve this objective, government is presently investigating the feasibility of imposing a financial or tax-related disincentive to holding mineral rights. The paper aims to present the pros and cons and to examine the alternatives which will cause minimal disruption to the minerals industry in the period during which mineral rights are transferred to the State. South Africa is a country whose economic and political history is embedded in the development of its mineral resources and has inherited a system which cannot simply be wished away. Hasty or radical decisions will compound the problem, rather than provide a lasting and widely acceptable solution. Mineral rights ownership and its impact on access to mineral deposits are discussed. Taxation as a possible economic disincentive is also evaluated. Finally, the value of mineral resource related information as a prerequisite to mineral policy decisions and as an alternative to mineral rights taxation is emphasized.