Precious Metals Bill

1
Precious Metals Bill

• Presentation to the
• Minerals and Energy Parliamentary Portfolio
  Committee
• 13 October 2005
• Parliament, Cape Town

2
The Team

• Department of Minerals and Energy
• Mintek

3
Overview

• Issues raised at the previous presentation
• Rationale for amending the law
• Major changes in the Bill
• Precious Metals Bill
• Conclusion

4
Issues Raised at the Previous Presentation

• How will the regulation of the Act by the South
  African Diamond and Precious Metals Regulator be
  dealt with in the Precious Metals Bill
• In the Precious Metals Bill, the Regulator is
  linked, under the definitions, to the South
  African Diamond and Precious Metals Regulator
  established by Section 3(1) of the Diamond
  Amendment Bill 2005
• Clarity on special permits on unwrought
• Dealt with in presentation

5
Issues Raised at the Previous Presentation cont

• Why the gold register has been scrapped
• The gold register still exists for licence
  holders dealing with unwrought metal
• Why has silver been deregulated
• Precious metals are linked to high value and
  silver is not a high value metal like gold and
  platinum group metals anymore
• It is a bi-product of base metals and not
  produced in large quantities in the country

6
Issues Raised at the Previous Presentation cont

• Whether penalties have been verified the jail
  sentences do not seem to match the fines
• Adjusted as per advice by the State Law Advisors
• Why the DME was not administering Chapter 16 of
  the Mining Rights Act
• The Mining Rights Act dealt with base minerals
  and all other types of minerals including
  precious metals
• Link between gold and currency
• The Department of Finance and SA Reserve Bank
  Exchange Control Regulations, still control the
  possession and trade in gold
• As such chapter 16 has remained in operation

7
Rationale for Amending the Law

• Eliminate barriers to local beneficiation of
  precious metals
• Grow beneficiation industry in SA to create jobs
• Increase participation throughout the value chain
  
• Make SA a major international mineral
  beneficiation centre
• Rationalize the regulation of downstream
  development of precious metals

8
Major Changes

• Administrative functions centralised within
  Department of Minerals and Energy
• Industry regulated and administered through SA
  Diamond and Precious Metals Regulator
• Regulator must consider
• Promotion of equitable access
• Orderly local beneficiation
• Broad Based Socio-Economic empowerment in the
  industry

9
Major Changes cont

• Amendment of the definition of unwrought
  precious metal
• Definition of semi-fabricated precious metals
  introduced
• Introduction of a Precious Metals Beneficiation
  Licence
• Retention of Jewellers Permits
• Deregulation of
• Silver
• Possession of trading in minted bars

10
Unwrought Precious Metal

• New definition introduced
• To increase access to precious metals for local
  beneficiation
• Excludes minted bars
• Definition
• In the case of gold, metal which has not been
  refined to 99.95 purity
• For platinum group metals, metals which has not
  been refined to 99,90 purity

11
Semi-fabricated Precious Metal

• Definition
• Metal refined to or beyond 99,95 purity in the
  case of gold
• Metal refined to or beyond 99,90 in the case of
  platinum group metals
• Metal can be bought in the form of pure metal or
  as sheet wire, tube or grain

12
Precious Metals Beneficiation Licence

• New type of licence available to manufacturing
  industry e.g. IT, avionics, automobile industry
• Excludes the jewellery manufacturing industry
• Holder may only possess semi-fabricated precious
  metal
• Issued for 10 years and renewable
• Onerous provisions of registers removed, only
  statements reflecting the precious metals
  received and sold to be submitted annually.

13
Jewellers Permit

• Retained for the jewellery industry
• Holder only allowed to possess semi fabricated
  precious metals
• Issued for 5 years and subject to renewal
• No register required
• Proper books of account must be kept and
  submitted annually to the issuing authority

14
Licences and Permits
Unwrought Semi-fabricated
Special permit for scientific purposes, jewellers and precious metals beneficiators Refining Licence Import Permit Certificate to acquire or dispose Jewellers permit Precious metals beneficiation licence
15
Transitional Provisions

• Certificate, permit or licence issues under
  Mining Rights Act valid for
• Period issued, or
• Two years after commencement of new Act
• Processing of pending applications
• Re-application by current permit/licence holders

16
Conclusion

• This Bill attempts to partially deregulate
  precious metals in order to increase the level of
  beneficiation and level of access to precious
  metal