South Africa contemplates minerals export taxes
Bloomberg (via Mineweb) this week updated us on the deliberations of South Africa’s ruling ANC party as to whether or not to introduce - among other things - export taxes to encourage companies to use raw local materials for domestic manufacturing.
According to an unnamed source, Mineweb tells us that the ANC National Exec Committee decided in early June to implement “previously adopted ideas within the current administration’s term” - meaning, less obliquely, that the ANC has “told Department of Mineral Resources and Department of Trade and Industry officials to assess which minerals may be classified as “strategic” before considering how to ensure they can be harnessed to support economic growth.”
However, “regulation is a last resort,” according to head of the ANC Economic Transformation Committee.
From the article:
Since winning May 7 elections, the ANC has pledged to enact more “radical” economic transformation as it seeks to appease growing disgruntlement over the 25.2 percent unemployment rate. The party hopes that enforcing the use of minerals the nation has in abundance in local manufacturing will give it a competitive advantage over other countries.
At its meeting the ANC also decided to remove regulatory barriers to investment in energy projects as it seeks to end power shortages in Africa’s second-biggest economy, the person said. The ANC wants the government to make energy supply its top priority, the person said.
Since the meeting Mines Minister Ngoako Ramatlhodi said he asked President Jacob Zuma to hold off on signing into law proposed changes to the Mineral and Petroleum Resources Development Act.
These include giving the state the right to a free 20 percent stake in all new energy ventures and to change how projects are awarded, threatening to stymie investment in oil and gas exploration.
The ANC decided to take steps against poor lending practices and excessive charges by banks, according to the person. The South African Reserve Bank has warned of the danger of a growth in unsecured lending, which can turn into bad debt.