South Africa Mulls Coal Export Duty

by Lorys Charalambous, Tax-News.com, Cyprus

At the 2013 SA Coal Exports Conference, South Africa’s Minister of Mineral Resources Susan Shabangu confirmed that no decision had yet been taken by the government on whether or not to apply a duty on coal exports.

While it was true that the government is keen that certain minerals such as coal should be declared as strategic assets within amendments to the Minerals & Petroleum Resources Development Act, which were recently released for public comment, she stressed that it remained important for the private sector players to work together to ensure the industry’s future.

However, Shabangu also confirmed that coal remained an important component in the country’s future domestic energy mix, and the emergence of an export market for lower grade coal was a challenge for Eskom, as it put a strain on the availability of coal for the South African electricity utility.

She indicated that, while South Africa has become one of the biggest global coal exporters, those exports may have to be reduced, although whether that would involve an export levy or other means has not yet been decided.

She pointed out that, although the ZAR87.8bn (USD9.7bn) in export earnings generated by coal sales in 2011 accounted for 24% of total mining sales in that year, the government’s role will be to achieve a balance between the benefit coal has for the mining industry and that which it has domestically for ordinary South Africans.

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