Northam Platinum is understood to be considering mounting an appeal to the South African government over its mining royalties plans.

The South African authorities have unveiled the latest version of the draft bill on mining royalties, which places a three per cent levy on platinum refined in South Africa and a six per cent tax on metal which leaves the country unrefined.

However, Northam believes that this would significantly impact on its profits because it sends the platinum it mines to Germany to be refined.

Northam's project manager, Rene Rautenbach, explained to Platts that the new bill, if it were to pass into law, could have a damaging effect on the company's operations.

"We are a bit concerned. On the face of it looks like we are in big trouble, but clarification is needed," he commented.

But Northam has also taken measures to reduce the threat of the bill passing into law and Mr Rautenbach stated that Heraeus, which currently refines all Northam's platinum in Germany, is set to invest in a $10 million independent refining plant in South Africa.

Such a move would see 80 per cent of Northam's platinum being refined in South Africa, Mr Rautenbach revealed.

Ÿ Adfero Ltd