SA miners to deliver tax windfall after metals rally | Fin24
 
  • Trump and Tariffs

    Face-to-face trade meetings with China on the horizon.

  • Peter Moyo

    What is next for Old Mutual and its on-and off-again CEO Peter Moyo as legal manoeuverings continue?

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.

Loading...

SA miners to deliver tax windfall after metals rally

Aug 02 2019 11:42
Felix Njini

South Africa’s platinum and iron ore producers will generate additional tax revenues for the nation’s cash-strapped government as a rally in metal prices buoys their earnings, according to Morgan Stanley.

Royalty payments are estimated to climb 70% this year for the listed mining companies covered by the bank, while tax payments could increase by as much as 80%, Morgan Stanley analysts including Christopher Nicholson said in a note.

Miners such as Anglo American Platinum and Kumba Iron Ore are reaping windfall profits from higher palladium, rhodium and iron ore prices, while a weaker rand lowers their costs.

“Improved profitability should lead to a materially higher tax and royalty take from South African mines in 2019,” the Morgan Stanley analysts said. “A much needed boost for the South African fiscus.”

The government is under pressure as it seeks to bail out the debt-laden state power utility Eskom. That will probably widen a fiscal shortfall, which is already forecast to be the worst in 10 years.

eskom  |  mining  |  sa economy
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What's your view on deep sea mining?

Previous results · Suggest a vote

Loading...