June 2010

Muckpile concept - vital element for Royalty legislation

If you are the holder of a mining permit or you intend applying for a permit, or have applied for a permit - you should have registered with SARS by now. The deadline was January 31 this year.

There are two pieces of legislation - the Mineral and Petroleum Resources Royalty Act, and the Mineral and Petroleum Resources Royalty Administration Act. Implementation was delayed from 2009 to 2010, and if you have won minerals since 1 March 2010, you are liable to pay a royalty tax.

In short, the Royalty Act imposes a tax on all mineral resources won or recovered in South Africa. This royalty is payable in addition to corporate income tax and collected by SARS, and is paid on a provisional basis. There are two classes of minerals - refined minerals (such as gold and platinum) and unrefined minerals (most important of which are coal and iron ore), and this is the category for aggregate and sand.

The Aspasa Mancom has, together with KPMG, has made a strong argument to SARS for the point of transfer to be defined at the muckpile, which is either unprocessed dump material or the unprocessed gravel or sand stockpile that is separated from the pit, or the blast rock in the case of quarries.

It is strongly recommended that persons liable to pay a royalty contact their auditors or tax consultants to assist in dealing with the legislation and the liability.

Grant Neser's presentation on the Royalty Act at the recent IQSA conference was very well received. His paper is available on www.iqsa.co.za. For further information on the Aspasa mancom's representation to Treasury, contact Aspasa directly on tel: +27 11 793 3327.

In this issue

• In this quarter, we look at AfriSam's Ulco quarry operation in the Northern Cape, where product quality before blasting is of prime importance. Quarry manager Arthur Ndindani is very proud of his quarry, and it is clear to see that quality and safety are key at this impressive operation.
• The recently-held IQSA conference and exhibition was a resounding success, and we provide a feedback of the event.
• Aspasa/Sarma and the IQSA are now well settled in their new offices in Randpark Ridge, an excellent move for these industry organisations. Aspasa is not resting on its laurels, and continues to provide an invaluable service to its members.
• MQ meets up with FLSmidth, a company that has global references in the aggregates industry, and much to offer in terms of value-added services not only to the minerals but also the aggregates sector.
• We also look at a very innovative product, the Vari-Stem blasting plug, and provide references and a successful case study.

Let us know what you'd like to read in the magazine. Please feel free to contact the editor Dale Kelly on tel: +27 11 622 4770, or email her directly on dalek@crown.co.za. Our next quarterly issue is the September-October edition which will celebrate Aspasa's 20th anniversary.