The minerals and mining sector in South Africa is going through policy changes and the directors of Mineral Development in the nine mining regions are now called Regional Managers. Their duties will include the issuing of mining rights and applications will be processed and approved through a control system that includes provision for the following parameters:

• Environmental management;
• Social plans;
• Economic objectives; and
• Legal correctness.

These mechanisms aim to help achieve the State's national objective of sustainable development through minerals and energy resources for the benefit of all South Africans.

The role of the mine economists

The role of the mine economists in the nine regions and at head office as part of the Licensing and Legal Compliance Directorates is to ensure that all mining business ventures are evaluated on the basis of sound technical, financial and factual information and that all regulatory costs can be - and are planned to be - viably internalised in actual cash flows. This is done through:

• Economic assessment of prospecting and mining applications;
• Assessing the provision for regulatory requirements and the achievement of national objectives for economic sustainability;
• Inspections regarding compliance with performance requirements;
• Valuations of mineral or mine properties as a service to other government departments; and
• Assistance services to small-scale miners.

Mine and mineral rights valuations

Valuations are done primarily to establish the value of mineral rights for use by other State departments, such as the Department of Land Affairs, the South African Revenue Service, the Master of the Supreme Court. These valuations ensure that the State receives its fair share of taxes. Valuations cannot be carried out for private purposes.

Effective value determination is done in terms of the Income Tax Act, Act 58 of 1962)

Mineral leasing

Up until now, Prospecting Fees and Royalty Payments have been payable where prospecting or mining operations involving State owned Mineral Rights have been taking place. The rates for prospecting and level of royalties for mining have been laid out in a document approved by Director-General of the Department of Finance, in terms of the Public Finance Management Act, 1999 (Act No. 1 of 1999). Until the promulgation of the Money Bill, the present rates as reflected in the Treasury document will be payable.

One of the focal points of the New Act is that all Mineral resources belong to all South Africans and that the State is the custodian of these resources. The result of this is that after the transition period provided for in the New Act, prospecting fees and royalties will be payable whenever a potential resource is to be prospected or a proven resource is to be mined, whether these rights were previously State or privately owned.