Towards A Mineral Property Valuation Code: Considerations For South Africa

One of the consequences of globalizing mine finance is a necessity to apply uniform accountancy and valuation standards that are clearly understood and consistently applied by the global investment community. However, each country has unique circumstances, which sometimes make it difficult to align domestic practice with international requirements. South Africa is no exception and issues such as its political history, a taxation regime enforcing different rules on different mineral producers and a unique mineral rights ownership distribution, are barriers to internationalization. The economy is in a transitional phase as a result of the many and diverse policy documents following the change in political dispensation in 1994. Many of these documents have recently been implemented through new legislation and, in the case of mining, negotiations are continuing in order to ensure an acceptable outcome. This paper discusses the challenges that the South African minerals industry faces in the field of mineral property valuation. It draws on international experience and includes a discussion on the unique considerations that the South African mineral property market must take into account in establishing a code for this purpose, as such a code could later be aligned with international practice.