SA Remedies Mineral Royalties Act Anomalies

Source:

"These remedies include the introduction of rollover relief."

Some key anomalies that were identified during the first few months of implementation of the Mineral and Petroleum Resources Royalty Act were being remedied, Finance Minister Pravin Gordhan said on Tuesday.

The Act came into effect for the first time on March 1 2010.

Introducing the Taxation Laws Amendment Bills 2010 in Parliament, Gordhan said the South African mineral and petroleum royalty system imposes a royalty charge on a gross basis with the rate increasing or decreasing depending on company profitability.

This varying rate allows for South Africa as a whole to enjoy relatively higher yields during the boom years while providing partial relief during lean years, he said.

He added that some key anomalies that were identified during the past few months are being remedied.

"These remedies include the introduction of rollover relief. This rollover relief is intended to allow smaller mining companies to roll the royalty over to other parties. They will refine or otherwise upgrade the minerals.

"In addition, the minimum specified first saleable condition for certain minerals has been adjusted. These revised minimum conditions or points relate to iron ore, coal, vanadium and sand aggregates," the minister stated.

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