The South African Chamber of Mines has said that the proposed royalty on mining companies' sales will generate higher levies than those envisaged by the National Treasury, damaging competitiveness in the industry.

The Government proposed a 2.7 per cent royalty on pgm sales and used figures from 2002 to 2006 to calculate the rates.

According to the Chamber of Mines, the proposal, made in December, is unfair on mining firms because the rates fail to take into account the high metal prices of 2007.

A written statement to Parliament from the Chamber said: "Given the continued global commodities boom, with the significant impact of demand for minerals from China, the industry is therefore likely to pay higher rates."

The statement said it "would make the industry relatively less competitive".

According to Bloomberg, Anglo American has also said that the proposed royalties are too high because the formula is based on "historic data".

The royalties were introduced as a method for sharing wealth across the country.

Source:

South African Miners Say Royalty to Exceed Estimate, 11/03/08
http://www.bloomberg.com/apps/news?pid=20601116&sid=aXnDY3FqWYcw&refer=africa

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