Changes to mining rules in South Africa | KPMG Global
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South Africa: Mining requirement changes, implications for taxpayers

Changes to mining rules in South Africa

The Mining Charter 2017 (released June 2017) includes measures increasing the number of holders of new prospecting rights who must be black persons.


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Historically, a minimum black shareholding of 26% was required. The 2017 Mining Charter changes this percentage to require holders of new prospecting rights to hold a minimum of 50% black person shareholding (including voting rights in the company holding the prospecting rights). Similarly, the holder of a new mining right must now have a minimum of 30% black person shareholding with equal voting rights in the company holding the mining right. There are further requirements as to how the 30% black person shareholding must be held.

These changes may have certain tax implications for holders of mining rights concerning:

  • Restructuring existing and new operations
  • Funding structures
  • Mining rights held in separate entities, including the issues concerning contributions to rehabilitation trust funds, a section 36 capital expenditure, etc.
  • Tax consequences typically associated with ESOPs and trusts
  • Security transfer taxes
  • Tax deductibility of costs incurred in order to restructure existing shareholdings to meet the new black person shareholding requirements
  • Tax deductibility of social and labor plan (SLP) costs


Read a June 2017 blog item posted by the KPMG member firm in South Africa

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