The National Treasury needs to acknowledge how much more the South African economy could get out of mining if it just did what Canada does to promote exploration.
For some reason, the flow-through scheme can gain no traction with the National Treasury, even though it is a proven method of promoting invaluable economic activity through exploration and mining. In the wake of South Africa’s recent looting and property destruction, it is mining that has saved the day by surprising on the upside with huge flows of tax to the fiscus.
Trevor Manuel was right to promise the flow-through scheme when he was Minister of Finance. It is a pity that the National Treasury then tried to reinvent the wheel and concocted a homegrown failure that nobody in exploration took up. Without exploration, South African mining is destined to die except at the informal level. With a flow-through scheme, it will boom at the formal level.
There are already far too few mining companies on the JSE, which owes its very existence to mining, and far too many unlisted mining companies operating below the radar. The current situation of mining failing to be heard by the National Treasury should be brought to a rapid end for the good of the South African people.