Modern Quarrying April May 2015

FACE TO FACE WITH ASPASA

Aspasa – truly representative of its It has been an extremely busy first quarter for the Aggregate and Sand Producers Association of Southern Africa (Aspasa) particularly in terms of legislation which is changing constantly. There are trans- port issues, the payment of royalties and the South African Revenue Services, which has thrown the cat among the pigeons with its new interpretation draft note.

Sand and aggregate quarry operations may continue to claim diesel rebates following intense legal wrangling between the quarrying industry’s representative body and SARS. can be used to determine what consti- tutes a mine or manufacturer: • There must be a method or process to remove minerals from the earth. • There must be a separation of valu- able minerals from waste materials. • Mining should take place for a min- eral as defined by the inherent min- eral qualities of a mineral with a value other than in bulk. • The mineral must be extracted from the soil. Manufacturers, by comparison, are deemed to make a new product that is different to what was originally mined. “It is clear that both descriptions are open to interpretation and for this reason, the industry needs to investigate this further and make a stand to assist SARS in finding an interpretation that benefits everyone,” Du Toit urges. Aspasa will be making a submission to this draft interpretation, which has to be in by the end of April 2015. Royalties The payment of royalties is a hot topic among quarry owners and operators as to where the value of a mined prod- uct needs to be determined, in order to calculate exact payments. In most instances, disagreement with SARS exists over the first point of sale at which the value of royalties needs to be calculated. This is potentially different for different

W herever MQ goes, the feedback from member companies is always positive. Aspasa works hard for its members, and non-members should join and become part of a very important organisation. Some of the key issues are covered below. The South African Revenue Services (SARS) has thrown the cat among the pigeons with a new interpretation draft note classifying certain quarries as manu- facturers rather than mines. The interpretation note was issued as a result of the widely varying meth- ods used to extract sand, stone and other minerals from quarries, pits, rivers and dunes, etc, with varying levels of pro- cessing required to bring the product to market. If the interpretation is accepted, it will have far-reaching effects on the industry and can lead to disproportionate costs between those that are classified as mines and those classified as manufacturers. While manufacturers will no longer have Legal expert Camilla du Toit of Shepstone & Wylie Attorneys (courtesy Aspasa).

Attorney Freek van Rooyen of Shepstone & Wylie Attorneys (courtesy Aspasa).

to comply with onerous mining legisla- tion nor pay royalties, they will also not be able to claim capital expenditure allow- ances, nor will they be able to make use of the diesel rebate scheme that miners enjoy. Legal expert Camilla du Toit of Shepstone & Wylie Attorneys recently briefed a tax and financial workshop held by Aspasa. She has cautioned indus- try roleplayers to study the interpreta- tion note and send comments to SARS by April 30, this year, to ensure that all concerns are considered and addressed before the finding takes effect. “One of our concerns is that SARS’new position in terms of classifying operations goes against the Treasury Department’s call for further beneficiation of products at our mines,” she says. “Yet when further processing of minerals takes place at our quarries, SARS wants to classify them as manufacturers rather than mines which, we fear may be counter-productive.” In terms of the note, four main points

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MODERN QUARRYING

April - May 2015