South Africa nixed plans to force mining companies to contribute 1% of their annual turnover to a new community development agency amid fears that the funds generated could be abused, Bloomberg News reported, citing Mining Minister Gwede Mantashe.
The planned levy to fund the agency was part of a draft version of the revised mining charter introduced by Mantashe's predecessor, Mosebenzi Zwane, the report said. The proposed measure was subsequently challenged in court, saying it would drive costs up.
Under Zwane's proposal, the agency would fall under the jurisdiction of the mines minister, which may be in conflict with public finance laws that give South Africa's tax agency the sole responsibility to collect revenue on behalf of the national government.
The first draft of the revised charter, which includes provisions to compel mining companies to cede 5% to the communities of their projects and another 5% free stake to their workers, will be published next week, the report added.
In June 2017, South Africa unveiled the new mining charter but suspended its implementation in July pending judgment in the judicial review sought by the country's Chamber of Mines.
