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21 Jun 2022
BY Dalit Anstey AND Rewaldo Quest

Financial Provision Regulations: extension to 19 September 2023

The Minister of the Department of Forestry, Fisheries and the Environment (“DFFE”), Barbara Creecy, has extended the date for existing holders of rights or permits (granted in terms of the Mineral and Petroleum Resources Development Act, 2002) to comply with the Regulations pertaining to the Financial Provision for Prospecting, Exploration, Mining or Production Operations to 19 September 2023.

Since the Regulations were published in 2015, a compliance leeway has been granted to existing holders of rights or permits in recognition of the need for a transitional period for existing holders to top up their financial provisions. The extension comes as a surprise, as it was anticipated that the version of the revised Regulations that was published on 27 August 2021 was near final.

Additionally, on 22 February 2022, SARS released a Draft Interpretation Note titled “Mining Rehabilitation Company or Trust: Deductibility of Amount Paid and Compliance with Section 37A of the Income Tax Act 58 of 1962”.

The public is invited to comment by 24 June 2022. Comments must be sent to policycomments@sars.gov.za.

Ongoing extensions for compliance with the Regulations and the Draft Interpretation Note suggest that clarity is still required (even seven years after the publication of the Regulations) with respect to financial provision for mining activities. Alignment between the DFFE, SARS and National Treasury regarding financial provision is urgent.

Reviewed by Ntsiki Adonisi-Kgame, Head of ENSafrica’s Natural Resources and Environment department.

Dalit Anstey

Natural Resources and Environment | Associate

danstey@ENSafrica.com

Rewaldo Quest

Natural Resources and Environment | Associate

rquest@ENSafrica.com