A New Royalty For South African Mineral Resources
Organization: The Southern African Institute of Mining and Metallurgy
Jan 1, 2001
The new South African Mineral Policy has major implications on the way mineral rent will be collected and shared between the stakeholders in future. Although the policy does not supply details on how this will be done, drastic departures from practices under the previous dispensation require a new approach. For example, there introduction of the ?right to mine? principle implies that the repealed lease consideration concept will be expanded to all minerals. The new policy also makes provision for predetermined standard terms and conditions for all prospecting and mining permissions. It also states that, regardless of whether the mineral rights are state or privately-owned, all prospecting fees and mineral royalties will be determined by state officials after consultation with the registered holder of the mineral rights. This paper proposes a standard mineral royalty formula that complies with the principles mentioned in the White Paper and has been shown to be internationally competitive.