South Africa

South Africa, Africa’s southernmost nation, is a middle-income, emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors; a stock exchange that ranks in the top twenty globally; and modern infrastructure supporting an efficient distribution of goods to major urban centres throughout the region. Growth has been robust since 2004, as South Africa has reaped the benefits of macroeconomic stability and a global commodities boom. Very much Africa's superpower and financial centre, South Africa’s main exports include gold, diamonds, metal and minerals, cars and machinery.

The land mass of South Africa is very old and particularly rich in mineral resources. The Precambrian rocks of South Africa are among the world’s most ancient formation of rocks of considerable size and many mineral deposits originate from this era, particularly gold bearing conglomerates and banded iron formations. Later millenia saw volcanism and the formation of the famous diamond-bearing kimberlite pipes. Kimberlite is formed under high pressure and temperature in the pipes deep inside the volcano, and during this process the carbon in the lava is converted into diamonds. While there are other important diamond deposits on earth, namely in Russia and Australia, the centre of all diamond deposits remains the southern end of Africa.

One of the leading diamond-producing nations by value, currently ranked number three in the world after Botswana and Russia. South Africa produced 12.9 million carats in 2008, worth some US$1.2 billion (source: Kimberley Process Certification Scheme).

Fiscal and mining regime

Company Tax / Corporate Tax Mining

28%

Second Tier Taxes

10%

Mining Royalty Tax

Formula based royalty dependant on profitability of the mining operation

Industrial Tax
(on total sales revenue)

None

Commercialisation Tax
(Sales Tax) (on total sales revenue)

14.0% Value Added Tax

Discount to Government
(on total sales revenue)

None

Rough Diamond Export Levy

5.0%, relief measures leading to exemption

Exploration diamond export royalty

None

C&P diamonds valuation fee on rough

None