Mining by its nature requires large initial capital outlays and in recognition of this the Act provides for an accelerated deduction of such capital expenditure by miners. In Benhaus Mining (Pty) Ltd v Commissioner for the South African Revenue Service (165/2018)  ZASCA 1, it was held that this special regime extended to contract miners who engage in mining operations, under a contract with the holder of a mining right, and who earn a determinable fee under such agreement. For a discussion of this case see our Alert of 12 April 2019.
The Budget states that the Redemption Allowance would now be available to both a contract miner and the holder of the mining right. The Budget therefore proposes a review of the definition of the rules relating to the Redemption Allowance in the Act to address this concern.