Browsing by Author "Cawood, Frederick T."

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    Reading Between the Lines of the New South African Mineral and Petroleum Resources Royalty Act: A Technical Perspective on its Meaning
    (University of the Witwatersrand, Johannesburg, 2009-11) Cawood, Frederick T.
    After a prolonged process of drafting and consultation, the new mineral royalty regime for South Africa was signed into law in November 2008. The main purpose of the Act is to compensate the State as the custodian of South Africa’s rich mineral heritage through a royalty charge to holders of mineral development rights from 1 March 2010. Deciding on an acceptable royalty is a complex process, especially when it targets deceptive economic rents. This is achieved with a variable royalty rate that slides in tandem with mine profitability. The base is sales revenue and to compensate for the need to charge for the mineral in its unprocessed form, refined production is charged at a lower rate. Only time will tell if the view expressed in this paper on the policy success, as measured by the motivation for current mineral producers to spend the additional capital to become refiners, is correct. The aims of this paper are to first, discuss the Act in the context of the underlying theory, second, establish the impact thereof, third, measure it against international tax standards and fourth, make an educated guess on the meaning of the Act. This paper argues that most investors will be comfortable with most of the requirements of the Act for most of the time.