South Africa Scraps Plan for Mining Community Development Levy – by Sam Mkokeli (Bloomberg News – June 6, 2018)

South Africa’s government has scrapped plans to compel mining companies to contribute 1 percent of their annual turnover to a new community development agency because it feared the funds could be abused, the nation’s mining minister said.

The levy was proposed in a draft of the nation’s new Mining Charter that was introduced by Mosebenzi Zwane, the former mineral resources minister, and was one of a number of measures producers challenged in court, saying it would push up their costs.

Zwane was fired in February when Cyril Ramaphosa replaced Jacob Zuma as president, and replaced by Gwede Mantashe, a former mine worker union leader who agreed to review the charter.

There was a risk that the agency “could easily be a slush fund,” Mantashe said in a phone interview on Wednesday. “We are not going to put it in.”

Zwane had proposed that the development agency would have directly accounted to the mines minister, a provision that may have been in conflict with public finance laws that give the national tax agency sole responsibility for collecting revenue on behalf of the national government.

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