South African royalties regime refocus

SOUTH African President Jacob Zuma has put the mining industry on notice that the country’s royalties regime is up for review.

Noel Dyson

In his state of the nation address, Zuma said the country commissioned studies into its tax policies from “time to time”

“Later this year the Minister of Finance will be commissioning a study of our current tax policies to make sure that we have an appropriate revenue base to support public spending,” Zuma said.

“Part of this study will evaluate the current mining royalties regime with regard to its ability to suitably serve our people.”

This will be worrying news for mining industry players with, or contemplating, interests in South Africa.

That country’s mining sector already has been wracked by union unrest and a debate over nationalisation.

Last year the sector was hit by wildcat strikes that led to the deaths of at least 44 people.

Zuma said his government had helped alleviate the strike issue and also had put the nationalisation issue to rest.

“We established an inter-ministerial committee made up of senior cabinet ministers to assist families during that difficult period,” he said.

“The judicial commission of inquiry led by Judge Ian Farlam continues its work.

“Through working together we were able to restore social stability in the area.”

Zuma said nationalism was no longer an issue.

“We believe that at a policy level we have managed to bring about certainty in the mining sector,” he said.

“The nationalism debate was laid to rest in December at the ruling party’s national conference.”

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