Platinum mining firms have objected to the formula proposed by the treasury for calculating royalties, saying that it could damage competitiveness and result in higher rates of payment.

Investment and production could be compromised as a result of the royalty payments, the firms have claimed.

Anglo American and Impala Platinum have requested a review of the formula that will decide the royalty payments and have called for the rate to be lowered.

While the mining industry is in favour of the concept, it argues the estimated rates are unrealistic given that the price of platinum has soared in 2007 and the values were based on statistics from 2002-2006.

The average rate for the platinum industry was 2.7 per cent during 2002 to 2006 but Impala Platinum indicated that it would have been taxed at a rate of 3.71 per cent under the new formula.

Government officials indicated that they would discuss the formula, the Business Review reports.

Source:

Miners warn royalty rate will hammer ailing sector, 12/03/08
http://www.businessday.co.za/articles/frontpage.aspx?ID=BD4A725319

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