South Africa's controversial mining royalties law is not expected to be finalised until 2006, as debate over the details continues.

When presenting the 2005 budget, finance minister Trevor Manuel stated that a new draft royalty law would be published during the first half of the year, but that draft has been dogged with delays and it now seems unlikely that any agreement on the provisions of the bill will be reached before 2006.

"There are still areas of debate. At this point in time, there's no certainty as to when the bill will be finalised, but it appears it is heading for sometime next year," explained Pravin Gordhan, commissioner of tax for the South African Revenue Service.

In February's budget announcement, Mr Manuel reiterated that the mining royalties will be based on sales, rather than on profits, which is what the industry wants.

That looks set to remain one of the main sticking points and Mr Gordhan told the South African Mining Development Association conference: "I think it will take some time to construct a new way of looking at the mining sector."

South Africa's plans to introduce mining royalties have been beset by difficulties and although they were originally introduced in 2003, the government admitted last year that the effective date for the scheme would be delayed until 2009.


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