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The Mines and Minerals Development Act No. 11 of 2015 (the Mines Act) is an Act that provides the law relating to the exploration, mining and processing of minerals, payment of mineral royalties and matters connected with or incidental to the foregoing. On 27 December 2022, Parliament enacted the Mines and Minerals (Amendment) Act No.29 of 2022 (the Amendment Act) which amended the Mines Act with effect on 1 January 2023.
What is Mineral Royalty Tax?
In section 2 (1) of the Mines Act, Mineral Royalty Tax (MRT) is defined as a payment received as consideration for the extraction of minerals. Unser section 89 of the Mines Act, the following are liable to pay to MRT:
Mineral Royalty Tax in Respect of Copper Under the Mines Act
Prior to the Amendment Act, section 89 (2) of the Mines Act, prescribed the following MRT rates where the base metal produced or recoverable under the license is Copper:
Mineral Royalty Tax in Respect of Copper under the Amendment Act
Following the Amendment Act, where the base metal produced or recoverable under the license is Copper, the MRT payable is applied at an incremental value in each price range at the rates set out below:
The norm value of the Mines Act has been benchmarked against the monthly average London Metal Exchange cash price per ton multiplied by the quantity of the metal.
This legal alert has set out the amendments to the Mines Act brought about by the Amendment Act.
Should you have any questions on the amendments to the Mines Act, please do not hesitate to contact Arshad Dudhia.
1. Samuel Muleya – Legal Assistant