The African National Congress has proposed a tax to raise R40 billion: the Resource Rent Tax would take 50% of a mining company's profits that exceed 15% return on their investment.
The mining sector's bellwether companies were all beaten down on Thursday as the price of metals and minerals continued to slide and economic indicators from across the globe painted a bleak picture for the mining industry.
The slide in the spot price of gold triggered by disappointment over the Fed's actions – or lack thereof – yesterday accelerated in Thursday trade with the precious metal giving up $50 or just over 3%.
"Natural resources companies with a pipeline of, say, five projects in five different countries are now likely to build just two or three of those. Thus, executives have the power to cherry pick which combination of country and project offers the best returns."
A vital revenue stream for platinum miners — chrome ore — may be choked off if ferrochrome producers are successful in lobbying for a protectionist export tariff of $100/ton in their desperate attempt to protect their own businesses from China’s burgeoning chrome refiners.
