The Effect Of The Proposed Royalty Billon Mineral Property Values - Introduction

Lilford, E. V.
Organization: The Southern African Institute of Mining and Metallurgy
Pages: 8
Publication Date: Jan 1, 2003
The South African Minerals Development Act (?the Act?) has been promulgated and will come into full force and effect once it is gazetted. Thereafter, all Old Order mineral rights will have to be converted into New Order mineral rights within a 5-year period, probably by the end of 2008. The conversion of rights will be achieved only with the demonstrated inclusion of empowerment groups in the conversion applications. In addition to the Act, the first draft of the proposed Royalty Bill (?the Bill?) was released during the week beginning 17 March 2003. Comments on the Bill?s contents had to be submitted before 30 April 2003. The contents were to be considered in terms of applicability and acceptability to the South African minerals industry, where after proposed comments and suggested amendments were to be submitted to the relevant State Treasury office. Specifically referring to the Bill, the general response from the industry is one of concern. Since any royalty is tantamount to a tax, the general feeling is that the current mining taxation rates are already internationally competitive and to increase these effective rates, notably at differing rates depending on commodity type, will have an adverse impact on the South African mining industry. A number of these impacts can be mitigated to some degree, depending on the flexibility of the State to address the major concerns.
Full Article Download:
(895 kb)