Cape Town, South Africa — MININGREVIEW.COM — 12 February 2009 – The South African government has stated that it will delay the implementation of a mining royalty by 10 months in a bid to save jobs as the global economic slowdown cuts commodity prices.
“I propose to defer the mining royalties’ regime from this year to 2010,” finance minister Trevor Manuel said in his budget speech to parliament here. “This provides a boost to the industry of about R1.8 billion rand, which will assist in minimising job losses.”
The royalties – which were originally due to come into effect from 1 May this year – will now only be imposed on 1 March in 2010. The royalties will be based on company earnings before interest and tax, and rise with profitability. Anglo American Plc and other mining companies objected to the levy, saying it would deter investment.
The government is considering establishing an agency, to be managed jointly with business and labour, which will invest in economic development in mining towns and areas populated by miners who are being affected by job cuts.
“If the new development agency can be established this year, we will make an allocation towards its activities in the adjustments budget” in October,” Manuel said.
South Africa is the world’s largest platinum producer and third-largest gold producer.