Mineral and Petroleum Resources Royalty Act 28 of 2008, consolidated

1. Dct1nitions 5

2. Imposition of niyally

1. Determination of royally

4. Royalty fonnulae

5. Earnings bel'orc interest and taxes

6. Gross saks 10

7. Small husincss exemption

8. Exemption for sampling Y. Rollover rdief for disposals involving going ..:nncerns

10. Transfer involving body of unincorporated pcr!'.ons

11. Arm ·s length tr,.msai:til)ns 15

12. General anli-avoidam:c rnle

13. Conclusion of fiscal stability ag1n;rnents

14. Terms and u1ndi1ions of fiscal stability ,1grcements 15. l~orei~n cun-ency

16. Transitional credits 20

17. A-.:t hinding on Staie and application of other laws

18. Short title and commencement Schedule 1 S-.:hcduk 2 Definitions 25 1. {I) In thi~ /\cl. unkss till' ctrnkxt indicati:s Dthcrwise- " Administration Act'' means thi: \1i ncral and P1ctroleum R<!sourccs Royalty (Administration) Act. 2008: ''earnings before interest and taxes" mi:ans earnings before interest and taxes rncntit)ncd in scctiPn 5: 30 ''extractor" rm:ans a person mentioned in se(tinn 2: "gross sales'' means gross saks mentioned in section 6: "Income Tax Act" means the Income Tax Act, 1962 (Act No. 58 of 19f>2): "Mineral and Petroleum Resources Dcnlopment Act" means the Mineral and Pc1roleum Resources Development /\ct. 2002 (Act No. 28 of 2002): 15 "mineral resource'' means a mineral nr petroleum as defined in section I uf the MinL:ral and Petroleum Resources Deveh,pmcnt Act, regardless of whether that Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a <!-- page break --> 4 COVERNMEt\T GA/.ETTF. 24 NOVE'MHER 200X Ad :-.lo. 28, 2008 MINERAL AND PETROU-:U,·1 RESOURCES ROYALTY ACT, ~008 mineral or pctrnkum undergoes processing (as defined in section l of that Act) or manufacturing_: "person'' includes an insolvent. estate, the estate ol' a deceased person and a trust: "refined mineral resource" means a mineral resoun.:e- ( 11) listed solely in Schedule I: or 5 {b) listed in Schedule 1 and Schedule 2 that has hecn refined to nr hcyond 1he condition specified in Schedule I ror that mineral resource: '' Republic" means the Republic of South Africa and includes the sea as ddincd in section l of the Mineral and Pe1rokum Resources Development Act; "royalt~·•• mean., the royalty imposed hy this Act; I0 ''transfer'' mean~- ( a) the disposal of a mineral resnun:e; (h) the export of a mineral resource; or ( c i the consumption. theft, destruction or loss of a mineral resource. other than by way of llaring or other liberation into the atmosphere during exploration or I 5 rroduction. if that mineral resource has not previously been disposed of, cxponcd, consumed, stolen. dcstrnycd or lost: "unrefined mineral resource'' mcans a mineral resource~ ( a) listed solely in Schedule 2; or 20 (b) listed in Schedule I and Schedule 2 that has not been relined to or beyond 1he condition specified in Schedule l for that mineral resource; (2) Unless the -:ontex1 indicates otherwise, a word or expression to which a meaning has heen assigned in the Administration Act hears that meaning for purposes of this Act. Imposition of roya1t_y 25

2. A person that wins or recovers a mineral resoun:e from within the Republic must pay a royalty for the benefit of the National Revenue Fund in n.:spe<.:l of the transfer of that mineral resource. Determination of royalty

3. ( l) The royalty mentioned in section 2 in respect of the transfer of a refined mineral ~O resource is determined hy multiplying the gross sales of the extractor in respect of that mineral resource during the year of assessment hy the percentage dctermincd in a(.·cordance with the formula in section 4( 1). (2) The royalty rnent ioned in sedion 2 in respect nf 1he transfer of an unrc!incd mineral resource is determined hy multiplying the gross sales of the extractor in respect 35 of that mineral rcsource during the year of assessment hy the percentage determined in accordance with the formula in section 4(2 ). Royalty formulae

4. (I) The percentage mentioned in scctiPn 3( I) is- 0.5 + /1,:arnings before interest and taxcs/(gross sales in respect nf relined 40 mi ncra I resources x 12.5)] x l 00. (2) The percentage mentioned in scc1ion 3(2) is- 0.5 + [earnings before interest and taxcs/(gross sales in respl'ct of unre1ined minernl rcsourc.:cs x 9)! x 100. (3) (a) The percentage determined in lcnns of subsection (I l must not cxo.:ed 5 per 45 l'elll. Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a <!-- page break --> 6 GOVER:\MH\T GAZETTE. 24 /\OVEMHER '.!008 Ad No. 2!1, 20!)8 1'·111'\ERAL AND PE I KOLl-<.l/M RESOl'RCES ROYALTY ACT. 2008 ( b) The pen.:en!age determined in terms or suhsection (2) must not exceed 7 per cent. Earnings before interest and taxes

5. (I) for purposes of the rormula in section 4(1 ), ·"earnings before interest and taxes., in respect of' a year of assessment means the aggregate of-- ( a) the grnss sales or the extractor during that year in rcsplx:t of refined mineral 5 resources; and ( h) so much of the amount allowed to be deducted from income i11 terms of the Income Tax Act (whether in that year ur a previous year of assessment) in respec1 of the use of assl!ls. or expenditure incurred, directly in respect of mineral resources transferred on or after I May 2009 to win, recover and I0 develop those mineral resources to the condition specified in Schl!duk I. as is included in the income or the extractor during that year of assessment in terms of section 8(4) of that Act (disregarding the exception in respect of st.:uion 15(uJ of that Act). but not including an amount that is received or accrued l'rnm the disposal or asscLs the cost of which has in whok or in part hL'l!n 15 included in capital expcnditun: taken into account as mentioned in the ddinition of ··capital expenditure incurred" in section ~6( 11) of that Act, less any amount which in terms of that Act is allowed lo he deducted from the inconw of the extractor during that year of assessment in rcspcct of assets used or expenditure incurn.:d dirl!ctly to win, recover and develop those refined mineral resources to the 20 condition specified in Schedule I for those mineral resources. (2) For purposes of the formula in section 4(2), •'earnings before inll!rest and taxes" in respect of a year of assessment means the aggregate of---- ( a) the gross sales of the extrat:tor during that year in r!.!spect or unrefined mineral resources; and 25 (b I so much uf the anrnunt allowed to he deducted from income in terms of the Income Tax Act (whether in that year or a previous year of assessment) in respect of the use of assets, or expenditure inrnm.:d. directly in r!.!spcct of mineral resources transferred on or after 1 May 2009 lo win, recover and develop those unrefined mineral resources, as is included in thi.:: income of the 30 extractor during that year of asscs~ment in terms of section 8(4) of that Act (disregarding the exception in respect of section 15( a) of that Act). but not including an amount that is received Clf accrued from the dispnsal of assets the cost of which has in v.·holc ()f in part heen included in capital expenditurt: taken into account as men1ioncd in the definition of "capital expenditure 35 incurred" in section 36( 11) or that Act. less any amount which in terms of that Act is allowed to he deduc1ed from tht: income of the t.:xtractor during that ycar or assessment in respect of assets used or expenditure incurred directly to win. recover and develop thost.: unrdined mineral resources to the condition specified in Schedule 2 for those mineral resources. 40 (3) For purposes of subsections ( l) and (2), ··earnings before interest and taxes,. is determined without regard tC}-- (a) any deduction in respect of a financial instrument as defined in section l or the Income Tax Acl (other than an inslrnml!nt that is an option contrat.:t. forward contract ur nthcr instrument the Vi.llue of which is derived directly or im.lirectly 45 with rerercnce lo mineral resources): (b) any deduction allowed in ll!rms Df sei.:tion 11 (a) of the Income Tax Act in respect of the royally; (c) (i) in the i.:ase of mineral resources refined to the condition speeilied in Schedule 1 for 1hosc mineral rl!sourccs, any deduction for expenditure 50 Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a <!-- page break --> 8 GOVERNl\11-::\'T CiA/.FTTli. 24 :--JOV!-=~1 IUiR '.!008 Ad Nn. 28, 2008 MINl'KAL A~IJ PFl"KOU-:U\1 RESOL'RCES ROYALTY ACT. 2008 incurred in resped of transport. insurani:e and handling nf those. refined mineral resoun.:i:s after those mineral resources were refined ro that condi1ion Pr any amount received or ai.:i.:rned to effrct the disposal of 1hut minerul rcsoun:e; or (ii) in ihc case of mineral n:soun.:cs brought to ihc i:ondition spcdlicd in 5 Si:hedule 2 for those mineral rcsoun:cs. any dedut:tion for expenditure im:urred in respect of transport. insurance and handling or those unn:fincd mineral re\ources after those mineral resourl·es were brought LO 1hat l:om.lition or any anwunL n:ceivcd l'f accrued to cffci.:t the dispmal or that 111 ineral resource: I0 (d) any balance of assessed loss mentioned in section 20( I)( u) or thc income 'fax Act , unless !he halance of assessed Joss arises in n:spccl of c,1pital cxpcnditun.: taken into account for purposes of paragraph 5( I) or 1he Tenth Schedule or the Income ·nix Acl; ( e) any dcductil1n allowed in ll'rms of section 241 of the lncoirn: TJ., Act; 15 (./) ,iny determination in rcspel'.l of an impermissible lax arnidunn: arrangement contemplated in Part IIA or the Income Tax Act: or (g) any deduct.ions contemplated in paragraph 5(2) of the Tenth Schedule to the Income Tax Act. (4) (u) f-or purposes or determining ·'earnings hcfon: inlcn.:sl and t.:1x\.'s" in the case 20 of a composite of relined mineral resources and unn:fine<l mineral n:soun:es. I.he refined and unn:tined proportions of the composite mineral resource must he determined in accordance with a method of reasonable apportionment that is consistently applied. (b) For purposes of determining "earnings hcfore interest und Laxes ' '. if the v,tluc of the relined proportion of a composite mineral re,ource a,; determined in Lcnns of 25 suh.,ection (I) docs not exceed IO per cent of the tntal value of that composite mineral resource. that composite mineral resource may be treated solely as an unrefined 111 in~ral resource. and if the valut' of the unrdined proportion of a compositc mincral resource as so detennined docs nol exceed 10 per cent of the llll,11 value or that composite mineral resC111rce. that ,:omposite mineral resource may he treated solely as a refined mineral JO resource. (5) for purposes ol' this section. if ··earnings hefore interest and taxes .. is a ncga1ive amount 1ha1 amount is deemed to he nil. Gross sales

6. (I) Gross s.1lcs in respect of a relined 1nineral resource transferred~ :\5 / a) as menlioncd in paragraph (a) of the deli nilmn of "transfer" in section I in the condition specitied for that mineral resource in Schedule I is the amount received or accrued during the year of assessment in respect of the Lransrer ol' that mineral resource; ( b) as mentioned in paragraph ( r1) of the definition of ''transfer'' in sect ion 1 in a 40 condition nther than that speL:ilied for thal mineral resource in Schedule l is the amount that would have hccn received or accrued during the year or assessment in respect of the transfer of that mineral resource had that mineral rcsoun;e hccn transferred in the condition specified in Schedule I for that minen.tl resource in terms of a transaction enLered into al arm's length: and 45 ( l') as mentioned in paragraph ( h) or ( c) or the definition l)r "transfer·· in section I is the anwunl lhat would have heen received or accrued during Lhe year or as~essment in respect of the transfer of lhat mineral resource haJ that rn incral resource heen transfc1Tcd in the cnndi1ion specified in S<.:hedulc I for that 111 incral n:soun.:c in terms or a transaction i.:ntercd into al arm 's length. SO ( 2 l Gross sales in re spec! of an unrefined mineral resource transkrred~ Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a <!-- page break --> 10 GOYl·'l{'-ir'>lENT GJ\Zl'.TTE .. 14 NOYl-:rv1Bl'I{ 2008 Ad Nn. 18. 2008 \1INERAL AND PETROLEU1v! llESOL'RCf:S KOYALTY ACT. 1008 (uJ as mentioned in paragraph (a) of the definition of ··transfer" in section I in the condition specified in Schedule 2 for that mineral resource is the amount received or accrucu during 1he year of asscssml.'.nt in respect nf the transfer of that mineral rcsoun.:e; (hJ as mentioned in paragraph (a) of the dct1nition of '·transfer" in section I in a .'i condition other than that specified for that mineral rcsou1-cl.'. in Schedule 2 is the mnount that would have been received or accrued during the yt:ar of assessment in respect of the transfer of that mineral resource had that mi ncral resource been transferred in the conuition sp,xilied in Schedule 2 for that mineral resource in lerms of a transaction t'ntcred into at arm's length: and 10 (c) us mcnlinncu in paragraph (b) or (c) of the delinilion or .. transfer" in section J is 1he amount that would have heen received or accrued during the year of assessment in respect of the transfer of that mineral resource had that mineral resource bl.'.cn lransl'crrcd in the com.litilln specified in Schedule 2 for that mineral resource in lcrms of a transaction entered into at arm's lcngih. 15 (3) (a) For purposes of suhsection {I). gross sales is determined without regard to any amount rccci ved ur accrued in respect of transport. insurance and handling of a refined mint:ral resource alkr that mineral resource was rehned to the condi1ion specified in Scht:dufe I for that mineral resource or any amount recei\"cd or accrued to effect the Jispusal of that mineral resource. 20 (b) For purposes of subsection (2), gross sales is determined without regard to any amount rect:i wd or accrued for the transport. insuram:c and hanul ing of an unrctined mineral resoun:c after that mineral n:source was hroug:ht to !he condition spe.: ificd in S<:hedull.' 2 for that mineral resource or any amount received or accrneJ to effect the Jisposal of that mineral resource. 25 (➔) (a) If no amuunt can ht.: quan1ilied in respect of a rcfincJ mineral resource lransfcrred as mentioned in suhsect.ion (I)( a). gross sales in n:spccl of that transfr:r is the amount that would have heen received or accrued during the year of assessment in respect of that transfer had that mineral resource been transferred in the condition specified in Scheuuk I for 1hat mineral resource in terms ufa transaction entered into at ~O arm's length. (I,) If no amount can he quantified in resped of an unrefined mineral resource transferred as mentioned in suhscction (2)/a). gross sales in respect of that transfer is the amount that would have been received nr acnucd during the year of assessment in respect of that transfer had that mineral resource hecn transferred in the condition 35 specified in Schedule 2 for that mineral resource in terms of a transaction cnterc<l into ut arm ·s length. Small business exemption

7. (I) An .:xtractor is exempt from the royalty in respect of a year of assessment if- (a/ gross sales of that extractor in respect of all mineral resnurccs transferred docs 40 not exceed RIO million during !hat year; ( h J the royalty in respect of all mineral resources tran.sfcrreu that would he imposed on the extractor for that year dnes not exceed RI 00 000; (cj the extral.'.lor is a residclll as defined in section I or the lncom.: Tax Act througll()Ut that year: and 45 ( d) the extractor is registered for that year pursuant to sectitH1 2 of the Administration Act. (2) An extractor is nol exempt from I.he royalty as rncntil111cd in suhsection ( I J if-- ( a) the extractor ar any time during that year holds the right tt1 participate (din:Ttly or indirectly) in more than 50 per cent ol' the share capital, share premium. 50 current or accumulalcd profits or reserves of, or is cntirled to exercise more than 50 per cent of the voting rights in, ;my other extracwr: / b) any llthL'f extractor at any time during that year holds the right to participate (dirl.'.ctly or indirectly l in more than 50 per cent or the l'.Urrcnl or accumulated profits of th.: cxtrai:tor: 55 Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a <!-- page break --> GOVERNMENT GAZJ-:1 Ii-':. 2-1 NOVEMBER 200:-i Ad No. 28, 2008 MJNl-'RALAND PETROLEt.:M RESOURCl-'S ROYAJ.:rv ACT. 2008 (c) any olher person at any time during that year holds lhi.! right to participati:: (directly or indirectly) in more than 50 per cen1 of the profits of the ex tractor and more than 50 per cent nr the current or accumulaLcd prolits of any other extractor; or (d) the extractor is a registered person mentioned in sc:ction 4 of the Administra- 5 tion Acl. Exemption for sampling

8. An cxuw.:tor is excmpl from the: royalty imposed in respect of mineral resources won or recovered hy the extractor for purposes of Lesting. idcntificatiPn. analysis and sampling mentioned in section 20 of the Mineral and Petroleum Rcsoun.:es Develop- lO ment Act pursuanl to a rrospect ing right or an exploration right as de lined in sei.:Lion 1 of that Au if the gross sales in respect of those mineral resoun:cs docs not exceed R 100 000 during a year of assessment. Rollover relief for disposals involving going concerns

9. (I) For purposes of this Act a disposal of a mineral resource by an extractor that 15 forms pan of the disrosal or a going concern. or of a part of a going concern which is capable of separale operation. by that extractor to any other extractor is deemed not tn he a disposal. (2) for purposes of this Ai.:t an extractor that acquires a mineral resource in terms of a disrnsal mentioned in subsection (I) is deemed to he lhr.: extractor that won or 20 recovered the mineral rcsnurce. Transfer involving body of unincorporated persons

10. (I) Notwithstanding any other provision in this Act, an unincorporawd hody that is registered as a person under the Administration Ai.:t- ( a) is deemed to he an extractor while that registration remains in dfocc; and 25 (h) is suh_ic.:t to the royalty as if that body were an extractor separate from its members. in respcct of mineral rcsources won, recovered or transfcm:d hy that unincorporated body after taking into m:count any earnings hefon.: interest and laxes associated with those minerals as wdl as 1he application of any other provision or this Act hearing on lhc royalty dctcrminatitm in respect of those 30 mineral resources. (2) Notwithstanding any other provision in this Act. lo the extent that any mcmhcr of an unirn:orp11ratcd body mentioned in subsection (I) is acting in a capacity other than as a member or that body. !hat member is subject to the royalty a" if that memhcr were an extractor separate from that hody in respect of mineral rcsoun:cs won, recovered or 35 transferred by that unincorporated hody after taking into account any earnings before interest and taxt:s associated with those minerals as well as the application of any other provision of this A.:t hearing on the royally determination in respect of those mineral resources. (3 JOn the date of the election made in terms of seclion 4( 1) of the Administration Act, 40 the members of an unincorporated body mentioned in that section arc deemed to havc tran sferred the mineral resources to he disposed of by that body, which had heen won or reeuvcrcd hv those members. ( 4) On th~ date (ln which an unincorporated hody tcrminaws the election in terms nf section 4(6 ) of th.: Administration Act, the unincorporatcd hody is deemed to have 45 transfcrrcd the mineral resources won or recovered by the unincorporated body to lhe mcrnhers of lhat uninnirporatcd hody. Arm's length transactions ll. (I) To the extent that thc earnings bci'ore inleresl und laws determined in terms Df section 5 differ from the earnings that an extractor would have Lakcn into accllunt if 50 Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a <!-- page break --> 14 \lo. 31 r,:15 GOYER1'Ml:NT CiAZETTE. 24 NOV EM HER 2008 Act No. 28, 2008 I\IINERAI. A\D PETROLEUM RESOURU•:S ROYALTY ACT. ~008 lhos..; earnings had been derived from transactions entered inlo al arm's lcnglh, the Commissioner may adjust the earnings lO rcfk<:t the earnings that would have been taken inw account. !2) To !he exlenl that lhc gross sales determined in terms of section 6( I )(a) or section 6(2)( a) Jiffer from the gwss saks that an extractor would have taken into account if the 5 gross sales had been derived from transactions i.:ntcrcd into at arm ·s length, the Commissioner may adjust thi.: gross sales to rdkt:t the gross saks that would have been tah·n into account. General anti-avoidance rule

12. ( I) Not withs1anding anything Lo the contrary in this Act. if the Commission~'r is 10 satisfied 1hat a disposal. transfrr, operation, scheme or understanding (whdhcr entered into or carried llUl before or after the commencement of this Act)- ( a) has hccn entered into or carried out. which has the effect of avoiding or postponing liability for the royalty. or of reducing the amDunt thereof; (h) having regard to the circumstances under which the disposal, translcr. J5 uperation, sd1eme or understanding was entered into or carried oul- (i) was enteri.:d into or carried out- (aaj in the case of a disposal. transfer, operation, scheme or understand- ing in the context of business. in a manner which would not normally be employed for /Jcma fide business purposes, other than ::w the ohtaining of a n1yalty benclit: and (bb) in the case of any other disposal, transfer, operation. scheme or understanding not falling within the provisions of item (aa), by means or in a manner which would not normally he employed in thc entering into or carrying out of a disposal. transfer, operation, 25 scheme or understanding of the nature of the disposal. transfer, operation. scheme or understanding in question; or (ii) has crcaled rights or obligations which would not normally be crcated hclwecn pcrsons dealing at arm's length under a disposal. transfer. npcration. scheme or understanding of the nature of the disposal. 30 transfer, operation, scheme or wukrstanding in question: and ( c) was entered into or carried out solely or mainly for the purposi.:s or ohtaining a royally benclh, thL· Cornmissinncr must determine thl.! liahility for the royalty, and thc amount thi;rcof, as if the disposal, transfer. operation, scheme. or understanding had not been i.:nteri.:d 35 into or carried out. or in such manner as the Commissioni.:r in the drcumstan-:es deems appropriate for the prcvention or diminution of avoid,ince , postponement or reduction. (2) A decision or the Commissioner under subsection (I) is subject to objection and appeal mc111ioned in section 18(1 )(d) nf thi.: Administration Act. and whenever in proceedings relating thereto it is proved that the disposal. transfer, operation. scheme t)r 40 understanding in question wtiuld n:sult in the avoidance or postponement of liability for thc rnyalty. lll' in the reduction of the amount thereof, it is presumed, u111il the comrary is proved. in 1he case of any such disposal , transfer, operation. schcmc ur understanding. that it was entered into or carried out solely or mainly for the purpo~cs ol' the avoidance or the postponement of such liability. or the reduction of the amount of sui.:h liubil ity. 45 (3) For purpnscs of this section. "'royalty benel1t" includes any avoidance. postponement or reduction of the liability for payment ol' the royally mentioned in section 2. Conclusion of fiscal stability agreements

13. ( 1) Thc Minister of Finani.:e may conclude a hin<ling agrecmenc with an ."iO extractor- (a) in respect of the extractor's mincral resource right: or (b) in anticipation of the extractor acquiring a mineral resource right. Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a <!-- page break --> 16 GOVl-'R\J\1ENT (i 1 Vr.rn--:, 24 NOVl-:[l,1BEI{ 2008 Act Nu. 2S, 200S MI\JERAL AND PETROLEL'M RESOURCES ROYAITY ACT, 2008 that guarantees that the terms and conditions contemplated in section 14 apply in respect of the right for as long as the extractor holds the right (and for all participating intereslS subsequently held by the extractor in respect of the right). (2) A binding agreement relating to the anticipated acquisition of a mineral resource right contemplated in suhscclion (I)/ b) has no force and effect unless the mineral 5 resource right is granted within one year after the date on which the Minish.:r nf Finance concludes the binding agreement. (3) Tf an extractor disposes of a prospecting right or an explor:Hion right granted unckr the Mincr;il and Petroleum Resources Development Act to another person. and the right is su hject to a binding agreement mentioned in subsection (I) on the date of the disposal. I0 the extractor may assign all the rights held hy the extract.or under the agreement to the other person. (4) If an e, tractor disposes of a mining right or a production right granted under the Mineral and Petroleum Resources Development Act lo another person , and the right is subject to a binding agreement mentioned in subsection (I) on the date of the disposal. 15 the extractor may as sign all the rights held hy the extractor under the agreement to the other pcrson, if both the extractor and the other person form part of the same group of companies (as ddincd in section 1 of the Incomc Tax Act) on the date of the disposal. (5) An extractor that concludes a hinding agreement mentioned in subsection (I) may unilaterally terminate the agreement at any time with effect from the day after the last 20 day of the year of assi.:ssmcnt during which the cxtractor terminated the agreement (6) For purposes of this section- ( o) a prospecting right, a renewal of the prospecting right and an initial mining right converted from a prospecting right or renewal thereof hdd by an extractor: and 25 (h) un exploration right. a ri::newal of the exploration right and an initial production right converted from an exploration right or renewal thereof held by an cxlrm:tor, are, to the extent that those rights relate Lo the same geographical area, all deemed to he one and the same mineral resource righl in thi:: hands or the extractor. 30 (7) The powers conferred and the duties imposed upon the Minister of Finance hy the provisions of this section may be exercised or performed by the Minister personally or delegated by the Minister to the Director-General of the National Treasury and the Director-General may in turn delegate the powers and duties so delegated to him or her to any olliccr or persm1 under his or her control, direction or supervision. 35 (8) For purposes of this section ''mineral resource right" means a prospecting right, exploration right, mining right or production right granted pursuant to the Mineral and Pctrolcum Resources Development Act. and includes any lease or suhlcase mentioned in section 11 of that Act in respect of such right. Terms and conditions of fiscal stability agreements 40

14. (I) An amendment of section 4 has no force and effect in respect of an extractor that is party to an agreement contemplated in section J:I( J) if the amendment has the cffect that the extractor becomes subject to a royalty which is greater lhan the royally to which 1hc extract.or would otherwise have hecn suhjccl. (2) If the Stale fails to comply with the terms of an agreement contcmplated in section 45 13( I) and the failure has a makrial adverse economic impact on the determination of the royalty payahle by the extractor that is party to that agreement, the extractor is entitled to compensulion in respect of the increase in the ruyalty caused by the failure (and interest at the prescribed rate calculated on the compensation from the date of the failure) or to an alternative remedy that eliminates the full impact of the failure. 50 Foreign curren9

15. Any amount received by or accrued to. or expenditure or loss incum:d hy. an extractor in any currency other than the currency of the Republic must he translated to Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a <!-- page break --> 18 GOVl-:R\/\.11:.1\T GAZETTE. 14 NOVl-:Mll!'.H 200~ .\ct No. 28. 2008 MINERAL AT\D PETROl.l'U\.1 HESOURCl-iS IWYALTY ACT, 2008 the currency of the Repuhlic hy applying the spot rate, as defined in section I of the Income Tax Act. on the date on which that amount was so received or accru<.:d or expenditure or loss was so incurred. Transitional credits

16. (I) There must he deducted from the royalty payahle in respect of a mineral 5 resource the amount of any lease, royalty or similar payment to the State in respect of tlrnt mineral resource in terms of any conditions imposed pursuant to the laws applicahlc in respect of an old order right or OP26 right mentioned in Schedule II of the Mineral and Petroleum Resources Development Act. as consideration for the removal or di sposal of a rnim:ral or petroleum. I0 (2) No deduction is allowed in terms of suhsection (I) in respect of any IL.:asc mentioned in item 9(7) of Schedule II to the Mineral and Petroleum Resoun.:cs Development Act. (3) The amount to he deducted in terms of subsection (I) must not exceed the royalty mentioned in th.:it subsection. 15 Act hinding on State and application of other laws

17. This Act hinds the State. and no provision in any other law is -:onstrucd as applying or referring to this royalty unless the royalty is specilkally mentioned in that provision. Short title and con11ncnccmcnt 20

18. (I) This Al'.t is called the Mineral and Petroleum Resoun;es Royally Act, 2008 . (2) This Act comes into operation on I May 2009 and applies in respect of a mineral resource transferred on or after that date. Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a <!-- page break --> GOVI 'R.\l\ff.NT <iAJJ;Tn-i. 24 >IOVE\-lBER ~IIOX Ad 1\11. 28, 2008 \1 INl::RAL :\:\"I) PFTROLEUl\-1 RESlJl lRCl!S ROYALIY ACT. 20IJK

SCHEDULE I REFINED CONDITION OF MJNERAL RESOVRCES '.\lineral resoun:e Rdined condition name Cohah Cohalt is refined once proccssl'u into coba!t meta! ur cobalt sulphnte. 9') ..'i 1k rclinL'd Copper CtlpJxr is refined one.: processed into copper metal slabs. blister mp- per or c:nhodc copper of at least 99.0 1/i:: purity. Cermaniurn 99. 99 1k reti ned product Gold RL·lini:d and smelted to u 99.:'i '½- purity Lead Lead is refined once processed into bars and billets containing :.H kast 99.0 % pure lead. Lithium 99.:i'Jc LiC03 in conce111rate (lithium carbonate) 1\-krl'ury 99.9()!. purity '.\lickel (Base. mc.tal) Kicki:J is refined once proce~sed i1110 a lllL'taL or other form k.g. ferro nickl'i, nickd metal or nickel sulphatc). 99.Yk purity Platinum Group Relined and smelted to a 99.9 % purity .\-1etals (iridium. palladium. pl:.ttinum. rhodi L1m. ru thL·nium and o~miuml Molybdenum 99.9Wk refined product Silin,n 98.5% Si Silver Silver is n:lincd once processed lo silver metal or silver nitrate. 99.Y'k relined Tak 98.'i'k :.ind minus 325 fllll mcsh Zinc Zinc is relinl.'d once processed into zinc metal, plates or slabs con- wining a1 lea~t 98.:'i 'k pure zinc. Mineral resourcl' Refined rondition name Oil and Gas Oil At inlt:·l of n:tinery C;1s At inlet or rdinery Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a <!-- page break --> GOVFR .\ 'ME>iT GA/.LTTH. 24 NOVHMHHR ~008 Act No. 28. 2008 l\1J'IIERAL A'.'10 PETROLH J\-1 l{l \SOt:IKES ROYALTY ,\CT. :'.'008

SCHEDULE 2 UNREFl:"IJED CONDITION OF MINERAL RESOURCES :\lineral rl'soun.:e l 'nrdined condition name /\ggn:gatcs Hulk Antimony 65% Sb content in the conccntn11e Barile Cnnccntraces with 9Yk. HaSO4 Heryllium 70~. beryl concL'nlralc Chromi: on: in lump. (i) 37% to 4(1'k Cr2O."1 in concenlraLe: chips an<l fines (iiJ 4~{ tu JO% SiO1 and a (iii) Cr/Fe rntio of 1.25 Lo l .4S (chip and lump) or (i1J o.i.,:q, to 6C:{ SiO, <illd (vi Cr/Fe ratio of 1.3 to 1.6 <fine< Imm) Clay u~cd l'or bricks Hulk Kaolinite clay used by paper and ceramic sc·cwrs Coal Grade A: i11 situ calorilic value equal or greiHer than 27.S GMJ/kg Crade B: i11 situ calnrilic value equal of greater than 26.'i GMJ/kg and less than 27.S GMJ/kg Grade C: i11 situ L'alorilic value equal or greater than 19.ClGMJ/kg and kss than 26.5 GMJ/kg <,rnde D: in silll calo1i!ic valui.: li.:ss lhan 19.0 GMJ/k)! --- Cob.tit 7'k Co in ,1 polymini.:ralk matll! Copper 20'¼· lO .W7r Cu Diamond Rough Diamonds Dimension stone: Bulk Gmnitc. San<l~tont:. Slate. Shale. Gncis~. \1arbk Fluor~par 80% conccntr:tk' <.,rnphitc X6'k carhon content Iron on: 61'/4 to M'li Fe conLellt Lead Concl·ntrnte with ,t minimum l'f ~()'}/· Ph Li m.:~Lonc Concentrate with a minimum of :i4'J CaC01 /vlangancsc lvlangani.:sc Ol'l': Mn :nq to Mn 48'k and Si + Al kss than I l'l 1\·fa:a 48'l conccntrak Mineral Sand (Titanium) llrneniti.: 75'1c· ilnwniti: s:tinccntrati: Ru1ilc: .'i:V¼ l{ULile C(11lCClltratc Zirrnn 85'h· Zircon c·oncentrate Nickel I .4',1, 1\i content Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a <!-- page break --> 24 Nn ..l 16:15 GOVl:RNMFI\T CiA/1:TTF. 24 NOVh\1Hl-:R 2008 Att No. 28. 2008 MINERAL AI\I> PETROLHJ\1 RESOURCES ROYALTY ACT, 2008 Mineral resource Cnrefined condition name Niohium 45 % Ni/), in conccnlratL' Platinum Group c:onccnlrah.' ( I.'iO ppml J\frlals (iridium. palladium. platinum. rhm.tium. ruthenium and osmium) Sand Hulk Silver 800g/l Ag in polymim:ralic hase rrn,1:ll Tanwlum In cnnccntrak JO%, Ta~O,. Max 0.5% l\O~ and ThO 2 cDmhincd Tin 81ol% cassit,.-rilc conc..-ncrution Tungsten (Ca WO,) Minimum 6Yk \VO, in concentrate and Wolram llr:rnium 80% uranium in conccntratc. Oxide ( yellow c.ik;:J and Uranium Hexafluoride. Vanadiurn Co1wemrate > l 'k V~O, equivali.!nt and less than 2%· calcium and silica bearing gangue minerals (SiC>.i + CaO) Zinc (Bas,; metal) 27'½ - Zn in concentrate Other Minernls not Concentrate or whi.~re th,; ~pccitic mincral is not render~d into ::i con- listed clscwhcrL' centrnte, hulk. e.g. Phosphate Rock. Vermiculite, Semi-precious gcmstrmcs rnkc rns..: 4uan1, tiger 's eye: cnrundum: clc). Preciou~ gcmsto1ws (like sugili1e }. Fddsp:ir, Gamel. Peat. Pcrht..:. Rar,· Eunh Elements, Silica. Soda /\sh. Wollas10nil..:. Zcolitc, etc. Creamer Media Pty Ltd +27 11 622 3744 polity@creamermedia.co.za www.polity.org.za Polity~ a