Upload
jocelin-hubbard
View
222
Download
1
Embed Size (px)
Citation preview
DEPARTMENT OF MINERALS AND ENERGY
Presentation to M&E PPC on:Diamond Amendment BillPrecious Metals Bill
BACKGROUND
SOUTH AFRICA: Largest producer of gold [Contributes 15% of
the world supply of gold] 4th largest producer of rough diamonds,
[Contributes 12% of the world production] Produces 70% of the world platinum supply Trainable work-force
THERE IS OVERALL NEGLIGIBLE VALUE ADD IN ALL THE ABOVE MINERAL COMMODITIES
Rationale for amending the LAW• Accesibility of raw material• Maximise value addition industry• Encouraging FDI and foreign skills in South African
beneficiation projects• Encourage investments in both trading and
manufacturing• Growth of supply side such as manufacturers of
diamond cutting equipment and servicing equipment• SA becoming major international diamond cutting
centre and trading hub• Infrastructure development• Increased participation throughout the value chain
BACKGROUND Contd.
Chapter 1: Definitions
Critical new definitions
Beneficiation - polishing or setting in tools or setting in jewellery of diamonds,
Kimberley Process Certification Scheme - the international certification scheme for the international trade in unpolished diamonds negotiated in the Kimberley Process.
Chapter 2A: State Diamonds Trader
Diamond Act AmendmentsNo provision made for the local supply of rough diamonds
State Diamond Trader estadlished:
(a) Power to purchase a %age of mine production
(b) Distribution of the diamonds to local beneficiators
(c) Board of Directors
(d) State funded
Chapter 2B: Diamonds and Precious Metals Regulator
Diamonds Act Amendments
South African Diamond Board:
Board of Directors dominated by Industry
Funded through levies
South African Diamond and Precious Metals Regulator:
Representative Board of Directors
State Funded
Chapter 3: Illegal Acts
Diamonds Act AmendmentsNo declaration of synthetic diamonds
Assistance allowed to local buyers and sellers at the Diamond Bourse or Trading House
Search and seisure not alligned with Constitution of SA
Declaration of diamonds being synthetic
Assistance to local buyers or sellers prohibited except at Diamond Exchange and Export Centre
Search and Seizure alighned with the Constitution of SA
Chapter 4: Licences and Permits
Diamonds Act Amendments
Diamond Cutting License and Tool Making Licence
Consolidated Diamond Beneficiation License
Period of validity is one year
Period of validity is five years
Diamond trading House license facilitates local buying and selling of unpolished diamonds in South Africa
Retained in the Bill
Chapter 5: Diamond Trade
Diamonds Act Amendments
Diamond Exchange privately owned
Establishment of State Controlled Diamond Exchange and Export Centre
Chapter 6 : Export of Diamonds
Diamonds Act Amendments
Section 59 agreements for Export of rough
Unpolished diamonds for export to be offered at export centre and export duty payable
Exports from local trading houses
No exports from local trading houses
No distinction between economically cuttable and non-cuttable diamonds
Distinction made between economically cuttable and non-cuttable diamonds
Chapter 7 : Control measures
Diamonds Act AmendmentsSection 77 dealing only with control of production of diamonds
Section 77A added:Minister must determine terms and conditions under which all producers must offer unpolished to diamonds beneficiation
Determine classes of economically cuttable diamonds
Regulator may exempt non-economically cuttable diamonds from export duty
Chapter 8 : Offences and Penalties
Diamonds Act Amendments
Synthetic diamonds not an issue
Protection of natural diamonds through obligatory disclosure of synthetic diamonds
Chapter 9 : General
Diamonds Act Amendments
No recognition of socio-economic empowerment
Guidelines for the implementation of broad-based socio-economic empowerment to be established
Imposition of levies Levies no longer payable
“Presently governed by Chapter 16 of the MINING RIGHTS ACT, 1967”
The BILL provides for:Acquisition PossessionLocal beneficiation Disposal of Precious Metals
RATIONALE FOR REDRAFTING
Deregulation of: Silver Possession of and trading in Minted Bars (Investment
product) Restrict fabricators to Semi-fabricated Precious
metals Transport Permit deleted Act administered through the SA
Diamond&Precious metals Regulator
RATIONALE FOR REDRAFTING Contd
Introduction of a Beneficiation license for fabrication
Security matters Fabricators (Jewellers and beneficiation
licensees) may not purchase Unwrought Precious Metals
Provision for stolen Precious Metals to be returned to original mine owner if traced
Introduction of an Import Permit
DEFINITIONS
Mining Rights Act Precious Metals BillMINTED BAR: Dimensions, mass, and precious metal contents, marks and registration - prescribed.
SEMI-FABRICATED PRECIOUS METAL: Precious metal alloy in the form of sheet, tube, wire or grain
UNWROUGHT PRECIOUS METAL: Means Unmanufactured precious metal in various forms
UNWROUGHT PRECIOUS METAL: excludes minted bars;
Proviso that precious metal will be regarded as unmanufactured if not refined beyond 99.9% purity
MINING RIGHTS ACT PRECIOUS METALS BILL
By National Treasury mainly
Roles for: Mining Commissioner, SAPS CommissionerReceiver of revenue
By Minister of Mineral and Energy through the SA Diamond and Precious Metals Regulator
Role for National Commissioner
ADMINISTRATION OF THE ACT
Mining Rights Act Precious Metals Bill
Permit for unwrought required for scientific purposes or in connection with any trade, industry or profession (not jeweller).
Permit for unwrought required for scientific purposes or by holders of precious metals beneficiation licences or jeweller’s permits
SPECIAL PERMITS FOR UNWROUGHT
Mining Rights Act Precious Metals Bill
No regard to socio-economic empowerment
Regulator must have regard to the promotion of equitable access and orderly local beneficiation of precious metals; and
May have regard to the requirements of the broad-based socio-economic empowerment Charter for the Mining Industry
CONSIDERATION OF APPLICATIONS FOR LICENCE, PERMIT OR CERTIFICATE
MINING RIGHTS ACT PRECIOUS METALS BILL
Recovery works licence: 1. Issued by SARS for a magisterial district;
2. Included silver processing;
3. Issued for a quarter, or a year and subject to renewal
Refining licence: Issued by Regulator, but
not restricted to a magisterial district;
Issued for 10 years and subject to renewal.
May only sell precious metal in semi-fabricated form to jewellers and precious metal beneficiation licensees
EXTRACTION, SMELTING, REFINING LICENCE
Mining Rights Act Precious Metals Bill Permit for unwrought
precious metal required in connection with any trade, industry or profession.
Temporary or once-off
Precious metals beneficiation licence to buy semi-fabricated precious metal, and to fabricate it into articles other than jewellery.
Issued for 10 years; renewable
Must keep proper books of account in accordance with GAAP.
May not purchase unwrought precious metal
PRECIOUS METALS BENEFICIATION LICENCE
Mining Rights Act Precious Metals Bill
Issued by SARS for a magisterial district to buy and fabricate unwrought
Issued for a year and subject to renewal
Must keep a prescribed register and exhibit to SAPS when requested.
Issued by Regulator to buy semi-fabricated precious metal, and to fabricate it into jewellery.
Issued for 5 years and subject to renewal
Must keep proper books of account in accordance with GAAP
JEWELLER’S PERMIT
Mining Rights Act Precious Metals Bill
Transport permit to transport unwrought precious metal
Copy of licence, permit, right or certificate needed to transport unwrought or semi-fabricated precious metal
Import permit to import precious metal. Documentary proof of origin required.
IMPORT PERMIT & TRANSPORT PERMIT
Mining Rights Act Precious Metals Bill
Penalty for very serious offence R50 000 or up to 10 years imprisonment.
Penalty for less serious offences: R2 thousand or up to 6 months imprisonment.
Powers of police to inspect, search, seize - updated.
Penalty for very serious offences increased to
R1 million or up to 20 years imprisonment.
Penalty for less serious offences increased to R500 000 or up to 10 years imprisonment
SAPS POWERS; OFFENCES; PENALTIES