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VICENZA, Italy (Reuters) - South Africa's mines minister brushed off worries over a "resourcerent tax" on profit proposed in a study submitted to the countryruling ANC, saying any change would have to keep the country'svital mining sector competitive. The study, submitted in February, rejected nationalisation - aspectre that has long haunted the mining sector - as an"unmitigated disaster" for Africa's largest economy. It did propose a windfall levy of 50 percent that would kick inonce investors have made a "reasonable return". Speaking on the sidelines of a diamond conference in the northernItalian city of Vicenza, mines minister Susan Shabangu said onMonday it was too early to discuss details of the tax proposal,which should not become an excessive burden. "For me as a minister, we cannot come up with a process which willstifle and kill the industry," Shabangu told Reuters. "We must comeup with a regime which will allow us to compete in an advantageousway as South Africa." The ANC was expected to discuss proposals to reform the industryand extract more wealth from the country's mineral deposits,including the 50 percent tax on profit, at its major policy-settingmeeting in June. Lawyers and analysts have said the tax proposal was too complex,adding it would create more uncertainty around minerals policy foran industry battling steeply rising labour, power and safety costsin one of the world's largest precious metals producing nations. Separately, as of April, South Africa's marginal tax rateapplicable to gold mining companies dropped to 34 percent from 43percent, helping to cushion the impact of production hit by asafety drive and a lower rand. Shabangu said her ministry was not planning to extend tax breaksgranted to the gold mining industry, which faces mine depletion, toother mining sectors. However, the ministry has been analysing theperformance of other mining sectors. "If there is a need for the extension (of tax breaks) we may dothat. But we are not going to do it on the basis of (what we didwith) gold," she said. SAFETY FIRST Production from South Africa's gold and platinum sectors has beenhit by a safety drive and subsequent stoppages following violationsor deaths -- stoppages that can be too wide-reaching, according tothe industry. Shabangu said South Africa would press ahead, regardless ofconcerns over the impact on production. "There will always be pressure if people are still dying. Myresponsibility is to make sure that there is absolute safety,"Shabangu said. South Africa's mines are the world's deepest and among the mostdangerous, and Shabangu's ministry has been leading and effort thathas prompted a surge in inspections and stoppages. "We have to strive for zero fatality. It is possible," she said. "Iwill be satisfied as a minister if I could report a year when therewill be no fatality." Safety stoppages cost top gold producer AngloGold Ashanti 76,000 ounces lost production in the first three months of 2012,more than for the whole of last year. Mining output fell sharply in volume terms in February, the latestmonth for which data is available, highlighting the impact of thesafety push. Shabangu also said the mining industry was still far from the blackeconomic empowerment goals which should see 26 percent of miningfirms black-owned by 2014. But as more and more new mines are majority black-owned, the 2014target would be achieved, she said. Since the end of white-minority rule in 1994, South Africa hasstruggled to ensure its mineral wealth benefits all its 50 millionpeople, and lavish spending on government job creation schemes hasalarmed investors. Thomson Reuters 2012 All rights reserved SUBSCRIBE to Mineweb.com's free daily newsletter now. The e-commerce company in China offers quality products such as Stainless Steel Skull Ring , Stainless Steel Chain Necklace Manufacturer, and more. For more , please visit Stainless Steel Mesh Bracelet today!
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