JOHANNESBURG (miningweekly.com) – South Africa’s current mining royalties regime would come under the spotlight as part of a tax study the Finance Minister would commission, President Jacob Zuma said in his yearly State of the Nation address to a joint sitting of Parliament on Thursday evening.
Zuma also revealed that he had held top-level talks with Anglo American chairperson Sir John Parker on the plans of Anglo American Platinum to restructure and retrench 14 000 employees.
Construction of the Majuba coal railway line, the President said, would begin soon in order to switch the transportation of coal from road to rail in Mpumalanga to protect that province’s roads, and additional rail capacity to improve the transportation of iron-ore had opened up South Africa’s West Coast.
On the imminent tax study, he said that Pravin Gordhan would be commissioning the review of South Africa’s current tax policies to make sure that the country had an appropriate revenue base to support public spending.
“Part of this study will evaluate the current mining royalties regime, with regard to its ability to suitably serve our people,” Zuma added.
He revealed that his meeting with Parker had taken place in Pretoria two weeks ago.
Mining, which was historically the backbone of the economy, had faced difficulties after being hit by wildcat strikes and the tragedy in Marikana, where 44 people were killed.
“Through working together we were able to restore social stability in the area,” President Zuma said.
An inter-Ministerial committee, made up of senior Cabinet Ministers, had assisted families and Judge Ian Farlam continued to preside over the judicial commission of inquiry into the incident.
An agreement that government, labour in the form of the Congress of South African Trade Unions, Nactu and Fedusa, together with Business Unity South Africa, the Black Business Council and the community sector, reached in October had laid the basis for a return to work across the mining industry.
The group had agreed to continue to work together to strengthen collective bargaining, address the housing problems in mining towns, support national infrastructure development, address youth unemployment and identify measures to reduce inequalities.
It would report back in due course with specific plans for the mining towns of Rustenburg, Lephalale, Emalahleni, West Rand, Welkom, Klerksdorp, Burgersfort, Steelpoort, Carletonville and Madibeng.
At policy level, government had managed to bring about certainty in the mining sector as a result of the mine nationalisation debate being laid to rest in December at the ruling party's national elective conference.
TAX STUDY RATIONALE
From time to time, South Africa had commissioned studies into its tax policies, to evaluate the extent to which they met the requirements of the fiscus.
To ensure that government could continue to provide services, the country required suitable tax policies to generate sufficient revenue, which was why Gordhan would be commissioning the tax study and evaluating the current mining royalties regime.
The government had spent R860-billion rand on infrastructure between 2009 and March 2013, which included the construction of the first phase of the Mokolo and Crocodile river water augmentation scheme, which had begun to provide part of the water required for the Matimba and the Medupi power stations.
The construction of the bulk water distribution system for the De Hoop dam was under way to supply water to the Greater Sekhukhune, Waterberg and Capricorn district municipalities.
The government was committed to improving the movement of goods and economic integration through a Durban-Free State-Gauteng logistics and industrial corridor.
In that regard, substantial work was taking place to develop the City Deep inland terminal in Gauteng, and initial work had started on the expansion of Pier 2 at the Durban Port.
Land had been purchased for the development of the proposed dug-out port at the old Durban airport and, in the Eastern Cape, the government-built Port of Ngqura was on the way to becoming a major new transshipment hub.
Construction was taking place in Cape Town, Nelson Mandela Bay, Rustenburg, eThekwini and Tshwane to integrate the different modes of transport.
Some 675 km of electricity transmission lines had been installed to connect fast-growing economic centres and also to bring power to rural areas.
Government signed contracts to the value of R47-billion in the renewable-energy programme, involving 28 projects in wind, solar and small hydro technologies, in the Eastern Cape, Western Cape, Northern Cape and Free State.