Diamonds Amendment Bill by ert554898

VIEWS: 3 PAGES: 29

									DEPARTMENT OF MINERALS
     AND ENERGY

   Presentation to M&E PPC on:
   Diamond Amendment Bill
   Precious Metals Bill
THE TEAM
   Department of Minerals and Energy
   South African Diamond Board
   MINTEK
OVERVIEW
   Background
   Highlights per Chapter
   Comparisons
BACKGROUND
SOUTH AFRICA:
     Largest producer of gold [Contributes 15% of
      the world supply of gold]
     4th largest producer of rough diamonds,
      [Contributes 12% of the world production]
     Produces 70% of the world platinum supply
     Trainable work-force
     THERE IS OVERALL NEGLIGIBLE VALUE ADD
      IN ALL THE ABOVE MINERAL COMMODITIES
BACKGROUND Contd.
       Rationale for amending the LAW
    •     Accesibility of raw material
    •     Maximise value addition industry
    •     Encouraging FDI and foreign skills in South African
          beneficiation projects
    •     Encourage investments in both trading and
          manufacturing
    •     Growth of supply side such as manufacturers of
          diamond cutting equipment and servicing equipment
    •     SA becoming major international diamond cutting
          centre and trading hub
    •     Infrastructure development
    •     Increased participation throughout the value chain
DIAMOND AMENDMENT BILL
Chapter 1: Definitions

 Critical new definitions

    Beneficiation - polishing or setting in tools or
     setting in jewellery of diamonds,

    Kimberley Process Certification Scheme - the
     international certification scheme for the
     international trade in unpolished diamonds
     negotiated in the Kimberley Process.
 Chapter 2A: State Diamonds Trader
Diamond Act                 Amendments
No provision made for the   State Diamond Trader
local supply of rough           estadlished:
diamonds                    (a)   Power to purchase a %age of
                                  mine production
                            (b)   Distribution of the diamonds to
                                  local beneficiators
                            (c)   Board of Directors
                            (d)   State funded
Chapter 2B: Diamonds and Precious
Metals Regulator
Diamonds Act                 Amendments
South African Diamond        South African Diamond
Board:                       and Precious Metals
                             Regulator:
  Board of Directors          Representative   Board
  dominated by Industry        of Directors

  Funded   through levies     State   Funded
  Chapter 3: Illegal Acts
Diamonds Act                    Amendments
No declaration of synthetic     Declaration of diamonds
diamonds                        being synthetic

Assistance allowed to local     Assistance to local buyers or
buyers and sellers at the       sellers prohibited except at
Diamond Bourse or Trading       Diamond Exchange and
House                           Export Centre

Search and seisure not          Search and Seizure alighned
alligned with Constitution of   with the Constitution of SA
SA
  Chapter 4: Licences and Permits
Diamonds Act                Amendments
Diamond Cutting License Consolidated Diamond
and Tool Making Licence Beneficiation License
Period of validity is one   Period of validity is five
year                        years
Diamond trading House       Retained in the Bill
license facilitates local
buying and selling of
unpolished diamonds in
South Africa
 Chapter 5: Diamond Trade
Diamonds Act       Amendments
Diamond Exchange   Establishment of State
privately owned    Controlled Diamond
                   Exchange and Export
                   Centre
 Chapter 6 : Export of Diamonds

Diamonds Act               Amendments
Section 59 agreements      Unpolished diamonds for
for Export of rough        export to be offered at
                           export centre and export
                           duty payable

Exports from local trading No exports from local
houses                     trading houses

No distinction between    Distinction made between
economically cuttable and economically cuttable and
non-cuttable diamonds     non-cuttable diamonds
 Chapter 7 : Control measures
Diamonds Act           Amendments
Section 77 dealing     Section 77A added:
only with control of     Ministermust determine terms
production of            and conditions under which all
diamonds                 producers must offer unpolished
                         to diamonds beneficiation
                       Determine classes of
                       economically cuttable diamonds
                       Regulator may exempt non-
                       economically cuttable diamonds
                       from export duty
Chapter 8 : Offences and Penalties
Diamonds Act            Amendments

Synthetic diamonds not Protection of natural
an issue               diamonds through
                       obligatory disclosure of
                       synthetic diamonds
  Chapter 9 : General
Diamonds Act           Amendments
No recognition of      Guidelines for the
socio-economic         implementation of broad-
empowerment            based socio-economic
                       empowerment to be
                       established
Imposition of levies   Levies no longer payable
PRECIOUS METALS BILL
“Presently governed by Chapter 16 of the
  MINING RIGHTS ACT, 1967”
The BILL provides for:
 Acquisition
 Possession
 Local beneficiation
 Disposal of Precious Metals
RATIONALE FOR REDRAFTING
    Deregulation of:
        Silver
        Possession of and trading in Minted Bars (Investment
         product)
  Restrict fabricators to Semi-fabricated Precious
   metals
  Transport Permit deleted
  Act administered through the SA
   Diamond&Precious metals Regulator
RATIONALE FOR REDRAFTING Contd
    Introduction of a Beneficiation license for
     fabrication
    Security matters
        Fabricators (Jewellers and beneficiation
         licensees) may not purchase Unwrought
         Precious Metals
        Provision for stolen Precious Metals to be
         returned to original mine owner if traced
    Introduction of an Import Permit
DEFINITIONS
Mining Rights Act         Precious Metals Bill
                          MINTED BAR: Dimensions, mass,
                          and precious metal contents,
                          marks and registration -
                          prescribed.

                          SEMI-FABRICATED PRECIOUS
                          METAL: Precious metal alloy in the
                          form of sheet, tube, wire or grain

UNWROUGHT PRECIOUS        UNWROUGHT PRECIOUS METAL:
METAL: Means              excludes minted bars;
Unmanufactured precious   Proviso that precious metal will be
metal in various forms    regarded as unmanufactured if not
                          refined beyond 99.9% purity
ADMINISTRATION OF THE ACT

MINING RIGHTS ACT         PRECIOUS METALS BILL

By National Treasury         By Minister of Mineral
mainly                        and Energy through the
                              SA Diamond and
Roles for:                    Precious Metals
                              Regulator
   MiningCommissioner,
   SAPS Commissioner
                             Role for National
   Receiver of revenue
                              Commissioner
SPECIAL PERMITS FOR UNWROUGHT

     Mining Rights Act        Precious Metals Bill
Permit for unwrought          Permit for unwrought
required for scientific       required for scientific
purposes or in connection     purposes or by holders of
with any trade, industry or   precious metals
profession (not jeweller).    beneficiation licences or
                              jeweller’s permits
 CONSIDERATION OF APPLICATIONS FOR LICENCE,
 PERMIT OR CERTIFICATE
Mining Rights Act     Precious Metals Bill
No regard to socio-   Regulator must have regard to
economic              the promotion of equitable
empowerment           access and orderly local
                      beneficiation of precious metals;
                      and
                      May have regard to the
                      requirements of the broad-based
                      socio-economic empowerment
                      Charter for the Mining Industry
EXTRACTION, SMELTING, REFINING LICENCE

  MINING RIGHTS ACT                  PRECIOUS METALS BILL

  Recovery works licence: Refining licence:
     1. Issued by SARS for a            Issued by Regulator, but
     magisterial district;               not restricted to a
     2. Included silver                  magisterial district;
     processing;
                                        Issued for 10 years and
     3. Issued for a quarter, or a       subject to renewal.
     year and subject to renewal
                                        May only sell precious
                                         metal in semi-fabricated
                                         form to jewellers and
                                         precious metal beneficiation
                                         licensees
PRECIOUS METALS BENEFICIATION LICENCE

 Mining Rights Act             Precious Metals Bill
    Permit for unwrought         Precious metals
     precious metal                beneficiation licence to buy
     required in connection        semi-fabricated precious
     with any trade,               metal, and to fabricate it
     industry or profession.       into articles other than
    Temporary or once-off         jewellery.
                                  Issued for 10 years;
                                   renewable
                                  Must keep proper books of
                                   account in accordance with
                                   GAAP.
                                  May not purchase
                                   unwrought precious metal
JEWELLER’S PERMIT

Mining Rights Act             Precious Metals Bill
   Issued by SARS for a         Issued by Regulator to
    magisterial district to       buy semi-fabricated
    buy and fabricate             precious metal, and to
    unwrought                     fabricate it into
                                  jewellery.
   Issued for a year and        Issued for 5 years and
    subject to renewal            subject to renewal
   Must keep a prescribed       Must keep proper
    register and exhibit to       books of account in
    SAPS when requested.          accordance with
                                  GAAP
IMPORT PERMIT & TRANSPORT PERMIT

  Mining Rights Act         Precious Metals Bill
     Transport permit to      Copy of licence, permit,
      transport unwrought       right or certificate
      precious metal            needed to transport
                                unwrought or semi-
                                fabricated precious
                                metal
                               Import permit to import
                                precious metal.
                                Documentary proof of
                                origin required.
SAPS POWERS; OFFENCES; PENALTIES

  Mining Rights Act           Precious Metals Bill
     Penalty for very           Powers of police to
      serious offence R50         inspect, search, seize -
      000 or up to 10 years       updated.
      imprisonment.              Penalty for very serious
     Penalty for less            offences increased to
      serious offences: R2       R1 million or up to 20
      thousand or up to 6         years imprisonment.
      months imprisonment.       Penalty for less serious
                                  offences increased to
                                  R500 000 or up to 10
                                  years imprisonment

								
To top