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Journal of the Southern African Institute of Mining and Metallurgy

On-line version ISSN 2411-9717
Print version ISSN 0038-223X


CAWOOD, F.T.  and  OSHOKOYA, O.P.. Considerations for the resource nationalism debate: a plausible way forward for mining taxation in South Africa. J. S. Afr. Inst. Min. Metall. [online]. 2013, vol.113, n.1, pp.53-59. ISSN 2411-9717.

This article is a continuation of a series of publications by the authors on the international debate on resource nationalism, with specific reference to South Africa. Previous outcomes have shown that mine nationalization is not a solution for South Africa, and that maintaining stability of the current mineral and tax regimes is fundamental. It will not be wise to replace existing law and policy instruments until there is a better understanding of the distinction between fact and public perception about the impact of the current system. The new scheme of state custodianship linked to a mining royalty that effectively targets economic rents provides for effective resource use. The methodology in this article is to consider how South Africa's mineral tax regime can be tweaked to achieve optimal management and benefit from mineral extraction and associated rents by avoiding changes feared by investors. The major finding is that the current suite of instruments can be considered a suitable platform for optimal management of resource rents. However, it will be necessary to first investigate ways of improving the mineral beneficiation intent of the royalty structure, and secondly investigate whether the mineral rent portion of the royalty formula can be ring-fenced for the purpose of establishing a sovereign wealth fund.

Keywords : South Africa; resource nationalism; mining taxation; resource rent..

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