The introduction of a flow-through share scheme of the kind adopted in Canada should be reconsidered in South Africa to boost junior mining, South African Mining Development Association President Bridgette Radebe has said.
Radebe told the IHS McCloskey South African Coal Exports Conference that South Africa should persist with the flow-though concept despite the failure of previous attempts because of its alleged complexity.
Canadian mineral exploration companies issue the flow-through shares and pass the tax breaks for exploration on to investors.
Radebe, who is also executive officer of Mmakau Mining, said Samda believes that they need to look at flow-through shares. She noted that in Canada, flow-through shares have benefitted the junior mining companies, adding that the flow-through tax rebates stimulate investment.
Flow-through shares were on the point of being introduced in South Africa when former Finance Minister Trevor Manuel, in his last Budget, dismissed them as being too administratively complex. The scheme he introduced in its place, which he said would be better, has been an abject failure, with not a single known taker.
Radebe said Samda still believes there is room to relook at the flow-through shares scenario.