South Africa may reconsider its proposal to impose a royalty tax on mining companies, according to the country's Mining Minister Buyelwa Sonjica.

Industry and trade unions have both voiced their objections to the move and Ms Sonjica, speaking at the Oil Africa 2008 Conference in Cape Town, said the policy is seen as a "double taxation" and detrimental to the companies it affects.

However, she said that the plan would only be modified, thus ruling out a complete volte face.

"We may find a way of compromising in certain areas, but I'm not sure if we would consider scrapping it," Bloomberg reports.

Royalties were first mooted in 2003 as part of an attempt to redistribute the nation's mineral wealth, and in December it was decided that a 2.7 per cent royalty should be paid on platinum-group metal sales, 2.1 per cent on gold and 3.7 per cent on diamonds.

It emerged recently that Anglo American and Impala Platinum have requested a review of the formula that will decide the royalty payments.

Meanwhile, the South African government announced last week that it was preparing to initiate discussions with South African businesses following the introduction of Robert Mugabe's Indigenisation and Economic Empowerment Bill.

Source

South Africa May Review Plans for Mining Royalty Tax, 17/03/08
http://www.bloomberg.com/apps/news?pid=20601116&sid=axBp2UvfaCDM&refer=africa

Mining firms join in objection to royalty formula - 12th March 2008
http://www.platinum.matthey.com/media_room/1205326828.html

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