SA Royalty Bill
http://www.miningmx.com/mining_fin/177580.htm
“I’m sure the percentages will come down, but the government is adamant that it will not climb down from charging royalties on turnover,” said Con Fauconnier, CEO of Kumba and the former president of the Chamber of Mines.
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SA miners in dark about royalty bill
Allan Seccombe
Posted: Wed, 05 Apr 2006
[miningmx.com] -- SOUTH AFRICA’S mining industry has hopes its unhappiness with the proposed royalty regime will be addressed in the second draft of the Mineral and Petroleum Royalty Bill due to be released in mid-May.
The second draft has been two years in the making, creating a level of uncertainty among mining companies, something Finance Minister Trevor Manuel apologised for when he spoke about the bill this week.
However, finding someone willing to comment on the bill is tough, with most preferring to wait until the draft is made public.
“I’m sure the percentages will come down, but the government is adamant that it will not climb down from charging royalties on turnover,” said Con Fauconnier, CEO of Kumba and the former president of the Chamber of Mines.
He stressed this was just speculation because no details whatsoever of the revised draft have yet been made public.
I’m sure the percentages will come downThe first draft was released in March 2003 and charged royalties on gross revenue ranging from one percent for deepwater oil and gas extraction to eight percent for rough diamonds. The charge would be levied on gross sales.
There was an immediate outcry from across the mining industry.
The Chamber led the charge against the bill, arguing that international precedents suggested a net-based royalty system was more favourable to investment than a gross based system. It said local mining companies also paid a relatively heavy burden in taxes and levies compared to other countries.
The royalty bill has to be flexible, recognise development projects and encourage empowerment, the industry argues.
It is likely the draft will show changes, taking cognisance of the industry’s concerns, but the scope of the changes remains a mystery to many outside the National Treasury, which has been crafting the new bill.
The secrecy around the bill appears watertight and no one contacted by Miningmx was prepared to say specifically what it might contain.
“Let’s not speculate about what will be in the draft. We will wait to see what comes out before we make any comment,” said Roger Baxter, the Chamber of Mines economist.
David Salter, managing director of Eland Platinum, which plans to start an open cast platinum next year, said a four percent royalty on platinum had been factored into the company’s equations.
“Surprisingly, there have been very few leaks this time round. No one has any information, whereas last time round there was a lot of gossip that pre-dated the release of the draft,” Salter said.
The South African mining industry is facing intense competition from other mining centres in the headlong rush into a commodity boom.
“The last thing you want to do is impose a royalty system on South Africa’s mining sector which makes it even more uncompetitive against its international peers. It undermines investment in the sector and its growth,” said a mining analyst.
“The need to put in a competitive system is vital for the interests of the industry and economy at large.”
Manuel has said the document has undergone “substantial refinements” because of the comments National Treasury had received and the results of fresh comparisons with royalty rates in other countries. It has also taken on board financial analysis done by the mining industry.
The passage of the bill will entail hearing representations from interested parties before parliamentary debate and then on to promulgation. The bill will be effective from 2009.
“We remain optimistic that this issue will be resolved and that an eminently sensible approach will be adopted,” said spokeswoman Nicola Wilson.
DRDGOLD spokesman Ilja Graulich said the bill, with a three percent royalty on gold, had to recognise companies that were starting up or experiencing tough market conditions. “There needs to be a built in flexibility otherwise the bill will trip mining companies up.”
___________
this latest bout of strength of Rand not good... Rand needs to weaken against US$
http://www.miningmx.com/mining_fin/177580.htm
“I’m sure the percentages will come down, but the government is adamant that it will not climb down from charging royalties on turnover,” said Con Fauconnier, CEO of Kumba and the former president of the Chamber of Mines.
___________________
SA miners in dark about royalty bill
Allan Seccombe
Posted: Wed, 05 Apr 2006
[miningmx.com] -- SOUTH AFRICA’S mining industry has hopes its unhappiness with the proposed royalty regime will be addressed in the second draft of the Mineral and Petroleum Royalty Bill due to be released in mid-May.
The second draft has been two years in the making, creating a level of uncertainty among mining companies, something Finance Minister Trevor Manuel apologised for when he spoke about the bill this week.
However, finding someone willing to comment on the bill is tough, with most preferring to wait until the draft is made public.
“I’m sure the percentages will come down, but the government is adamant that it will not climb down from charging royalties on turnover,” said Con Fauconnier, CEO of Kumba and the former president of the Chamber of Mines.
He stressed this was just speculation because no details whatsoever of the revised draft have yet been made public.
I’m sure the percentages will come downThe first draft was released in March 2003 and charged royalties on gross revenue ranging from one percent for deepwater oil and gas extraction to eight percent for rough diamonds. The charge would be levied on gross sales.
There was an immediate outcry from across the mining industry.
The Chamber led the charge against the bill, arguing that international precedents suggested a net-based royalty system was more favourable to investment than a gross based system. It said local mining companies also paid a relatively heavy burden in taxes and levies compared to other countries.
The royalty bill has to be flexible, recognise development projects and encourage empowerment, the industry argues.
It is likely the draft will show changes, taking cognisance of the industry’s concerns, but the scope of the changes remains a mystery to many outside the National Treasury, which has been crafting the new bill.
The secrecy around the bill appears watertight and no one contacted by Miningmx was prepared to say specifically what it might contain.
“Let’s not speculate about what will be in the draft. We will wait to see what comes out before we make any comment,” said Roger Baxter, the Chamber of Mines economist.
David Salter, managing director of Eland Platinum, which plans to start an open cast platinum next year, said a four percent royalty on platinum had been factored into the company’s equations.
“Surprisingly, there have been very few leaks this time round. No one has any information, whereas last time round there was a lot of gossip that pre-dated the release of the draft,” Salter said.
The South African mining industry is facing intense competition from other mining centres in the headlong rush into a commodity boom.
“The last thing you want to do is impose a royalty system on South Africa’s mining sector which makes it even more uncompetitive against its international peers. It undermines investment in the sector and its growth,” said a mining analyst.
“The need to put in a competitive system is vital for the interests of the industry and economy at large.”
Manuel has said the document has undergone “substantial refinements” because of the comments National Treasury had received and the results of fresh comparisons with royalty rates in other countries. It has also taken on board financial analysis done by the mining industry.
The passage of the bill will entail hearing representations from interested parties before parliamentary debate and then on to promulgation. The bill will be effective from 2009.
“We remain optimistic that this issue will be resolved and that an eminently sensible approach will be adopted,” said spokeswoman Nicola Wilson.
DRDGOLD spokesman Ilja Graulich said the bill, with a three percent royalty on gold, had to recognise companies that were starting up or experiencing tough market conditions. “There needs to be a built in flexibility otherwise the bill will trip mining companies up.”
___________
this latest bout of strength of Rand not good... Rand needs to weaken against US$
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