More conducive policy environment required for raw mineral exports
MZILA MTHENJANE The Minerals Council South Africa CEO believes that export tax may have negative effects on exploration and mining, as well as on jobs and other aspects
Despite the Minerals Council South Africa supporting the beneficiation of minerals where relevant, the professional body calls for a more conducive policy environment and a more informed export tax to be placed on the export of raw minerals – a discussion topic which will be unpacked on Day 1 of this year’s Joburg Indaba.
This discussion topic also ties in with the focus on how local companies can reimagine their roles in an ever-evolving global landscape.
Minerals Council CEO Mzila Mthenjane – responding to Mineral and Petroleum Resources Minister Gwede Mantashe’s encouraging beneficiation to boost employment – says that an unintended consequence of export restrictions, introduced to try to bolster local beneficiation, is that they may lower mining production, particularly in instances where South Africa does not have a comparative advantage to beneficiate a particular mineral.
Further, local and offshore interest in investing in exploration and existing mining operations may be curtailed in general, but specifically for those minerals suitable only for the export market or where there are committed supply contracts in place.
Thus, contrary to the stated aim of increasing employment through beneficiation, these adverse impacts will negatively affect existing jobs and new employment opportunities, affect the fiscus through reduced taxes, and impact current account balances, as well as South Africa's relevance in global commodities markets.
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