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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (9382)	11/1/2007 10:48:50 AM
From: LoneClone	Read Replies (1) \| Respond to of 192820

Royalty on Revenue Remains in South African Mining Bill By Charlotte Mathews 31 Oct 2007 at 06:52 AM GMT-04:00 resourceinvestor.com JOHANNESBURG (Business Day) -- The government and the mining industry are continuing discussions about the proposed Mining Royalty Bill but some issues remain unresolved, Chamber of Mines CEO Mzolisi Diliza said yesterday. In yesterday’s medium-term budget policy statement, the government said it would release a final draft of the royalty bill to Parliament’s portfolio committee in the middle of next month. The second draft of the bill was circulated for comment a year ago and, from the industry’s point of view, it contained a number of improvements on the first draft. The improvements included a lower royalty rate on various minerals than was first mooted and concessions for marginal mines. But the second draft, like the first, proposes imposing the royalty on mines’ revenue rather than on profit. Diliza said the chamber was still arguing that the tax should be a net smelter royalty rather than a turnover-based levy. A royalty on turnover would still have to be paid by companies making a loss and it would hit marginal mines and start-ups, including many black empowerment companies, particularly hard. The treasury’s argument was that if royalties were levied on profits, mining companies would be able to avoid ever making profits. But Diliza said this was not true. No listed company would be able to understate income to avoid paying a tax, and most of South Africa’s mining industry was represented by listed entities. In the past year the chamber had addressed several challenges, Diliza said. On constraints on mining investment, the pace of granting mining licences had accelerated, although there was still some delay in securing water permits. The industry had established a forum with Spoornet to address infrastructural constraints and South Africa’s increased gold and forex reserves were helping to stabilise the currency. The industry had been working on health and safety for several years but there had been no improvement in the statistics last year, Diliza said. It would fully co-operate with President Thabo Mbeki’s request for a safety audit. Diliza said the industry had made submissions on proposed amendments to the Minerals and Petroleum Resources Development Act and had found Minerals and Energy Minister Buyelwa Sonjica to be helpful and open to suggestions.