Mineral and Petroleum Resources Royalty Act

2. A person that wins or recovers a mineral r e s o u r ce from within the R e p u b l ic must pay a royalty for the benefit of the National R e v e n ue F u nd in respect of the transfer of that mineral resource. D e t e r m i n a t i on of royalty 3. ( 1) T he royally mentioned in section 2 in respect of the transfer of a refined mineral resource is d e t e r m i n ed by multiplying the gross sales of the extractor in respect of that mineral resource during in accordance with the formula in section 4(1). the year of assessment by the percentage d e t e r m i n ed (2) The royalty mentioned in section 2 in respect of the transfer of an unrefined mineral resource is d e t e r m i n ed by multiplying the gross sales of the extractor in respect of that mineral resource during the year of assessment by the percentage d e t e r m i n ed in accordance with the formula in section 4(2). Royalty f o r m u l ae 4. (1) T he percentage m e n t i o n ed in section 3(1) i s— 0.5 + learnings before interest and taxes/(gross sales in respect of refined mineral resources x 12.5)] x 100. (2) The percentage mentioned in section 3(2) i s— 0.5 + [earnings before interest and taxes/(gross sales in respect of unrefined mineral resources x 9 )| x 100. (3) (a) T he percentage d e t e r m i n ed in terms of subsection (1) must not exceed 5 p er cent. Act No. 28, 2008 MINERAL AND PETROLEUM RESOURCES ROYALTY ACT, 2008 (b) T he percentage determined in terms of subsection (2) m u st not exceed 7 per cent. E a r n i n gs before interest and t a x es 5. (1) For purposes of the formula in section 4(1), " e a r n i n gs before interest and t a x e s" in respect of a year of assessment m e a ns the a g g r e g a te of— (a) (b) the gross sales of the extractor during that year in respect of refined mineral resources; and so m u ch of the amount allowed to be d e d u c t ed from i n c o me in terms of the I n c o me Tax Act (whether in that year or a p r e v i o us year of a s s e s s m e n t) in respect of the use of assets, or e x p e n d i t u re incurred, directly in respect of mineral resources transferred on or after 1 M ay 2 0 09 to win, recover and d e v e l op those mineral resources to the condition specified in S c h e d u le 1, as is included in the income of the extractor during that year of a s s e s s m e nt in terms of section 8(4) of that Act (disregarding the e x c e p t i on in respect of section 15(a) of that A c t ), but not including an a m o u nt that is received or accrued from the disposal of assets the cost of which has in w h o le or in part b e en included the taken definition of "capital expenditure i n c u r r e d" in section 36(11) of that Act, into account as m e n t i o n ed in capital expenditure in less any a m o u nt which in terms of that Act is allowed to be d e d u c t ed from the i n c o me of the extractor during that year of a s s e s s m e nt in respect of assets used or e x p e n d i t u re incurred directly to win, recover and d e v e l op those refined mineral resources to the condition specified in Schedule 1 for those mineral r e s o u r c e s. (2) F or purposes of the formula in section 4(2), " e a r n i n gs before interest and t a x e s" in respect of a year of assessment m e a ns the aggregate of— (a) (b) the gross sales of the extractor during that year in respect of unrefined mineral resources; and so m u ch of the a m o u nt allowed to be d e d u c t ed from income in terms of the I n c o me Tax Act (whether in that year or a p r e v i o us year of a s s e s s m e n t) in respect of the use of assets, or expenditure incurred, directly in respect of mineral resources transferred on or after 1 M ay 2 0 09 to win, recover and d e v e l op those unrefined mineral resources, as is included in the i n c o me of the extractor during that year of assessment in terms of section 8(4) of that Act (disregarding the exception in respect of section 15(a) of that Act), but not including an amount that is received or a c c r u ed from the disposal of assets the cost of which has in w h o le or in part been included in capital e x p e n d i t u re taken into account as mentioned in the definition of "capital e x p e n d i t u re i n c u r r e d" in section 36( 11) of that Act, less any a m o u nt which in terms of that Act is allowed to be d e d u c t ed from the i n c o me of the extractor during that year of a s s e s s m e nt in respect of assets used or e x p e n d i t u re incurred directly to win. recover and d e v e l op those unrefined mineral resources to the condition specified in S c h e d u le 2 for those mineral r e s o u r c e s. (3) F or p u r p o s es of subsections (1) and (2), " e a r n i n gs before interest and t a x e s" is d e t e r m i n ed without regard t o— (a) (b) (c) any deduction in respect of a financial instrument as defined in section 1 of the I n c o me Tax Act (other than an instrument that is an option contract, forward contract or other instrument the value of which is derived directly or indirectly with reference to mineral resources): any deduction allowed in terms of section 1 11(a) of the I n c o me Tax Act in respect of the royalty; (i) in the case of mineral resources refined in Schedule 1 for those mineral resources, any deduction for e x p e n d i t u re to the condition specified Act No. 28, 2008 MINERAL AND PETROLEUM RESOURCES ROYALTY ACT. 2008 (ii) those mineral r e s o u r c es were refined incurred in respect of transport, insurance and h a n d l i ng of those refined that mineral resources after condition or any a m o u nt received or accrued to effect the disposal of that mineral resource; or in the case of mineral resources brought to the condition specified in Schedule 2 for those mineral resources, any d e d u c t i on for e x p e n d i t u re incurred those unrefined mineral resources after those mineral resources were brought to that condition or any a m o u nt received or accrued to effect the disposal of that mineral resource; insurance and h a n d l i ng of in respect of transport, to (d) (e) (f) (g) any balance of assessed loss mentioned in section 20(1 )(a) of the I n c o me Tax Act, unless the b a l a n ce of assessed loss arises in respect of capital e x p e n d i t u re taken into account for purposes of paragraph 5( 1) of t he Tenth S c h e d u le of the I n c o me Tax Act; any deduction allowed in terms of section 24I of the I n c o me Tax A c t; any determination in respect of an impermissible tax a v o i d a n ce a r r a n g e m e nt c o n t e m p l a t ed in Part IIA of the I n c o me Tax Act; or any deductions contemplated in paragraph 5(2) of the Tenth S c h e d u le to the I n c o me Tax Act. (4) (a) For p u r p o s es of determining " e a r n i n gs before interest and t a x e s" in the case of a c o m p o s i te of refined mineral resources and unrefined mineral resources, the refined and unrefined proportions of the c o m p o s i te mineral r e s o u r ce m u st be d e t e r m i n ed in a c c o r d a n ce with a m e t h od of reasonable apportionment that is consistently applied. (b) F or p u r p o s es of d e t e r m i n i ng " e a r n i n gs before interest and t a x e s ", if the value of the refined proportion of a c o m p o s i te mineral r e s o u r ce as d e t e r m i n ed in terms of subsection (1) does not exceed 10 per cent of the total value of that c o m p o s i te mineral resource, that c o m p o s i te mineral resource m ay be treated solely as an unrefined mineral resource, and if the value of the unrefined proportion of a c o m p o s i te mineral resource as so d e t e r m i n ed does not exceed 10 per cent of the total value of that c o m p o s i te mineral resource, that c o m p o s i te mineral resource m ay be treated solely as a refined mineral resource. (5) F or p u r p o s es of this section, if " e a r n i n gs before interest and taxes'" is a negative a m o u nt that a m o u nt is d e e m ed to be nil. G r o ss sales 6. (1) G r o ss sales in respect of a refined mineral resource t r a n s f e r r e d— (a) (b) (c) as mentioned in paragraph fa) of the definition of " t r a n s f e r" in section 1 in the condition specified for that mineral r e s o u r ce in S c h e d u le 1 is the a m o u nt received or accrued during the year of a s s e s s m e nt in respect of the transfer of that mineral resource; as m e n t i o n ed in paragraph (a) of the definition of " t r a n s f e r" in section 1 in a condition other than that specified for that mineral r e s o u r ce in S c h e d u le 1 is the a m o u nt that would have been received or accrued d u r i ng the year of a s s e s s m e nt in respect of the transfer of that mineral r e s o u r ce had that mineral r e s o u r ce been transferred in the condition specified in S c h e d u le 1 for that mineral resource in terms of a transaction entered into at a r m 's length: and as mentioned in paragraph (b) or (c) of the definition of " t r a n s f e r" in section 1 is the a m o u nt that would have been received or accrued d u r i ng the year of a s s e s s m e nt in respect of the transfer of that mineral r e s o u r ce had that mineral resource been transferred in the condition specified in S c h e d u le 1 for that mineral resource in terms of a transaction entered into at a r m 's length. (2) G r o ss sales in respect of an unrefined mineral resource transferred— Act No. 28. 2008 MINERAL AND PETROLEUM RESOURCES ROYALTY ACT. 2008 (a) (b) (c) as mentioned in paragraph (a) of the definition of " t r a n s f e r" in section 1 in the in S c h e d u le 2 for that mineral resource is the a m o u nt condition specified received or accrued during the year of assessment in respect of the transfer of that mineral resource; as m e n t i o n ed in paragraph (a) of the definition of " t r a n s f e r" in section 1 in a condition other than that specified for that mineral resource in S c h e d u le 2 is the amount that would have been received or accrued during the year of a s s e s s m e nt in respect of the transfer of that mineral resource had that mineral resource been transferred in the condition specified in S c h e d u le 2 for that mineral resource in t e r ms of a transaction entered into at a r m 's length; and as mentioned in paragraph (b) or (c) of the definition of " t r a n s f e r" in section 1 is the a m o u nt that would have been received or accrued during the year of assessment in respect of the transfer of that mineral resource had that mineral resource been transferred in S c h e d u le 2 for that mineral resource in terms of a transaction entered into at a r m 's length. in the condition specified ( 3 )( a) For purposes of subsection (1). gross sales is determined without regard to any a m o u nt received or accrued in respect of transport, insurance and h a n d l i ng of a refined mineral resource after that mineral r e s o u r ce w as refined to the condition specified in S c h e d u le 1 for (hat mineral resource or any a m o u nt received or accrued to effect the disposal of that mineral r e s o u r c e. (b) F or p u r p o s es of subsection (2), gross sales is d e t e r m i n ed without regard to any a m o u nt received or accrued for the transport, insurance and handling of an unrefined mineral resource after that mineral r e s o u r ce was brought to the condition specified in the Schedule 2 for that mineral resource or any a m o u nt received or accrued to effect disposal of that mineral resource. (4) (a) If no a m o u nt can be quantified r e s o u r ce transferred as mentioned in subsection (1 )(a), gross sales in respect of that transfer is the a m o u nt that would h a ve been received or accrued during the year of a s s e s s m e nt in respect of that transfer had that mineral resource been transferred in the condition specified in Schedule 1 for that mineral resource in terms of a transaction entered into at a r m 's length. in respect of a refined mineral in respect of an unrefined mineral (b) If no amount can be quantified resource transferred as mentioned in subsection (2)(a), gross sales in respect of that transfer is the amount that would have been received or accrued during the year of a s s e s s m e nt in respect of that transfer had that mineral resource been transferred in the condition specified in Schedule 2 for that mineral resource in terms of a transaction entered into at a r m 's length. Small business e x e m p t i on 7. ( 1) An extractor is e x e m pt from the royalty in respect of a year of assessment in respect of all mineral resources if— gross sales of that extractor in respect of all mineral resources transferred d o es not e x c e ed R10 million during that year; the royally imposed on the extractor for that year does not exceed R 1 00 0 0 0; the extractor is a resident as defined throughout that year: and the extractor Administration Act. in section 1 of the I n c o me Tax Act that year pursuant to section 2 of that would be is registered transferred for the (a) (b) (c) (d) (a) (b) (2) An extractor is not e x e m pt from the royalty as mentioned in subsection ( 1) if— the extractor at any time during that year holds the right to participate (directly or indirectly) in m o re than 50 per cent of the share capital, share p r e m i u m. current or a c c u m u l a t ed profits or reserves of, or is entitled to exercise m o re than 50 per cent of the voting rights in, any other extractor; any other extractor at any time during that year holds the right to participate (directly or indirectly) in m o re than 50 per cent of the current or a c c u m u l a t ed profits of the extractor; Act No. 28, 2008 MINERAL AND PETROLEUM RESOURCES ROYALTY ACT, 2008 (c) (d) any other person at any time during that year holds the right to participate (directly or indirectly) in m o re than 50 p er cent of the profits of the extractor and more than 50 per cent of the current or a c c u m u l a t ed profits of any other extractor; or (he extractor is a registered person mentioned in section 4 of the A d m i n i s t r a­ tion Act. E x e m p t i on for s a m p l i ng

8. An extractor is e x e m pt from the royalty i m p o s ed in respect of mineral resources won or recovered by the extractor for purposes of testing, identification, analysis and s a m p l i ng mentioned in section 20 of the Mineral and Petroleum R e s o u r c es D e v e l o p­ ment Act pursuant to a prospecting right or an exploration right as defined in section 1 of that Act if the gross sales in respect of those mineral resources d o es not e x c e ed R 1 00 0 00 during a year of assessment. R o l l o v er relief for disposals involving g o i ng c o n c e r ns 9. (1) For p u r p o s es of this Act a disposal of a mineral resource by an extractor that forms part of the disposal of a going c o n c e r n, or of a part of a going concern w h i ch is c a p a b le of separate operation, by that extractor to any other extractor is d e e m ed not to be a disposal. (2) F or p u r p o s es of this Act an extractor that acquires a mineral resource in t e r ms of that w on or in subsection (1) is d e e m ed to be the extractor a disposal mentioned recovered the mineral resource. Transfer i n v o l v i ng b o dy of u n i n c o r p o r a t ed p e r s o ns 10. (1) N o t w i t h s t a n d i ng any other provision in this Act, an unincorporated b o dy that is registered as a person under the Administration A c t— (a) (b) is d e e m ed to be an extractor while that registration r e m a i ns in effect; and is subject to the royalty as if that body were an extractor separate from its m e m b e r s, in respect of mineral r e s o u r c es w o n, r e c o v e r ed or transferred by that unincorporated body after taking into account any earnings before interest and taxes associated with those minerals as well as the application of any other provision of this Act b e a r i ng on the royalty determination in respect of those mineral resources. (2) N o t w i t h s t a n d i ng any other provision in this Act. to the extent that any m e m b er of an unincorporated body mentioned in subsection (1) is acting in a capacity other than as a m e m b er of that body, that m e m b er is subject to the royalty as if that m e m b er were an extractor separate from that body in respect of mineral resources won, r e c o v e r ed or transferred by that unincorporated b o dy after taking into account any e a r n i n gs before interest and taxes associated with those minerals as well as the application of any other provision of this Act bearing on the royalty determination in respect of those mineral r e s o u r c e s. (3) On the date of the election m a de in terms of section 4(1) of the A d m i n i s t r a t i on Act, the m e m b e rs of an unincorporated body mentioned in that section are d e e m ed to have transferred the mineral resources to be disposed of by that body, w h i ch had been won or recovered by those m e m b e r s. (4) On the dale on which an unincorporated body terminates the election in terms of section 4(6) of the Administration Act, the unincorporated body is d e e m ed to h a ve transferred the mineral resources won or recovered by the unincorporated b o dy to the m e m b e rs of that unincorporated body. A r m 's l e n g th t r a n s a c t i o ns 11. (1) To the extent that the earnings before interest and taxes d e t e r m i n ed in terms of section 5 differ from the earnings that an extractor w o u ld have taken into account if Act No. 28, 2008 MINERAL AND PETROLEUM RESOURCES ROYALTY ACT, 2008 those e a r n i n gs had been derived from the C o m m i s s i o n er may adjust the earnings to reflect the e a r n i n gs that would h a ve been taken into account. transactions entered into at a r m 's length, (2) To the extent that the gross sales determined in t e r ms of section 6( 1 )(a) or section 6(2)(a) differ from the gross sales that an extractor would have taken into account if the the gross sales had been derived C o m m i s s i o n er may adjust the gross sales to reflect the gross sales that would have been taken into account. transactions entered into at a r m 's length, from G e n e r al a n t i - a v o i d a n ce rule 12. (1) N o t w i t h s t a n d i ng anything to the contrary in this Act, if the C o m m i s s i o n er is satisfied that a disposal, transfer, operation, s c h e me or u n d e r s t a n d i ng (whether entered into or carried out before or after the c o m m e n c e m e nt of this A c t )— (a) (b) has been entered into or carried out. which has the effect of avoiding or postponing liability for the royalty, or of reducing the a m o u nt thereof; having regard the circumstances under which operation, s c h e me or understanding w as entered into or carried o u t— (i) was entered into or carried o u t— the disposal, transfer, to (aa) (bb) the context of business, in the case of a disposal, transfer, operation, s c h e me or understand­ in a m a n n er w h i ch would not ing in normally be e m p l o y ed for bona fide business p u r p o s e s, other than the obtaining of a royalty benefit; and in the case of any other disposal, transfer, operation, s c h e me or understanding not falling within the provisions of item (aa), by m e a ns or in a m a n n er which would not normally be e m p l o y ed in the transfer, operation, entering into or carrying out of a disposal, s c h e me or understanding of the nature of the disposal, transfer, operation, s c h e me or understanding in question; or (ii) has created rights or obligations which w o u ld not normally be created transfer, the disposal, between p e r s o ns dealing at a r m 's operation, scheme or understanding of transfer, operation, scheme or understanding in question; and (c) was entered into or carried out solely or mainly for the p u r p o s es of obtaining length u n d er a disposal, the nature of a royalty benefit, the C o m m i s s i o n er must d e t e r m i ne the liability for the royalty, and the a m o u nt thereof, as if the disposal, transfer, operation, s c h e m e, or understanding had not been entered into or carried out, or in such m a n n er as the C o m m i s s i o n er in the c i r c u m s t a n c es d e e ms appropriate for the prevention or diminution of a v o i d a n c e, p o s t p o n e m e nt or reduction. (2) A decision of the C o m m i s s i o n er under subsection (1) is subject to objection and appeal m e n t i o n ed in p r o c e e d i n gs relating thereto it is proved that the disposal, transfer, operation, s c h e me or understanding in question would result in the avoidance or p o s t p o n e m e nt of liability for the royalty, or in the reduction of the a m o u nt thereof, it is p r e s u m e d, until the contrary is proved, in the case of any such disposal, transfer, operation, s c h e me or u n d e r s t a n d i n g, that it w as entered into or carried out solely or mainly for the p u r p o s es of the a v o i d a n ce or the p o s t p o n e m e nt of such liability, or the reduction of the a m o u nt of such liability. in section 18(l)(d) of the A d m i n i s t r a t i on Act. and w h e n e v er (3) For p u r p o s es of this section, "royalty benefit" includes any p o s t p o n e m e nt or reduction of the liability for p a y m e nt of the royalty mentioned section 2. a v o i d a n c e, in C o n c l u s i on of fiscal stability a g r e e m e n ts 13. (1) T he Minister of F i n a n ce may c o n c l u de a binding a g r e e m e nt with an e x t r a c t o r— (a) (b) in respect of the e x t r a c t o r 's mineral resource right; or in anticipation of the extractor acquiring a mineral resource right. Act No. 28, 2008 MINERAL AND PETROLEUM RESOURCES ROYALTY ACT, 2008 that g u a r a n t e es that the terms and conditions c o n t e m p l a t ed in section 14 apply in respect of the right for as long as the extractor holds the right (and for all participating interests subsequently held by the extractor in respect of the right). (2) A binding a g r e e m e nt relating to the anticipated acquisition of a mineral r e s o u r ce right c o n t e m p l a t ed has no force and effect unless the mineral resource right is granted within one year after the date on which the Minister of F i n a n ce c o n c l u d es the binding a g r e e m e n t. in subsection (l)(b) (3) If an extractor d i s p o s es of a prospecting right or an exploration right granted u n d er the M i n e r al and P e t r o l e um R e s o u r c es D e v e l o p m e nt A ct to a n o t h er person, and the right is subject to a b i n d i ng a g r e e m e nt m e n t i o n ed in subsection (1) on the date of the disposal, the extractor m ay assign all the rights held by the extractor u n d er the a g r e e m e nt to the other person. (4) If an extractor d i s p o s es of a mining right or a production right granted under the Mineral and P e t r o l e um Resources D e v e l o p m e nt Act to another p e r s o n, and the right is subject to a binding a g r e e m e nt m e n t i o n ed in subsection (1) on the date of the disposal, the extractor m ay assign all the rights held by the extractor u n d er the a g r e e m e nt to the other person, if both the extractor and the other person form part of the s a me g r o up of c o m p a n i es (as defined in section 1 of the Income Tax Act) on the date of the disposal. (5) An extractor that c o n c l u d es a binding a g r e e m e nt m e n t i o n ed in subsection (1) m ay unilaterally terminate the a g r e e m e nt at any time with effect from the day after the last day of the year of a s s e s s m e nt during which the extractor terminated the a g r e e m e n t. (6) For p u r p o s es of this s e c t i o n— (a) (b) a p r o s p e c t i ng right, a renewal of the p r o s p e c t i ng right and an initial m i n i ng right c o n v e r t ed from a prospecting right or r e n e w al thereof held by an extractor: and an exploration initial production right converted from an exploration right or renewal thereof held by an extractor, right, a renewal of the exploration right and an are, to the extent that those rights relate to the s a me geographical area, all d e e m ed to be one and the s a me mineral r e s o u r ce right in the h a n ds of the extractor. (7) T he p o w e rs conferred and the duties imposed upon the Minister of F i n a n ce by the provisions of this section may be exercised or performed by the M i n i s t er personally or delegated by the Minister to the Director-General of the National Treasury and the Director-General may in turn delegate the p o w e rs and duties so delegated to h im or her to any officer or person u n d er his or her control, direction or supervision. (8) For p u r p o s es of this section " m i n e r al r e s o u r ce r i g h t" m e a ns a p r o s p e c t i ng right, exploration right, mining right or production right granted p u r s u a nt to the Mineral and Petroleum R e s o u r c es D e v e l o p m e nt Act, and includes any lease or sublease m e n t i o n ed in section 11 of that Act in respect of such right. T e r ms a nd c o n d i t i o ns of fiscal stability a g r e e m e n ts 14. ( I) An a m e n d m e nt of section 4 has no force and effect in respect of an extractor that is party to an a g r e e m e nt c o n t e m p l a t ed in section 13(1) if the a m e n d m e nt has the effect that the extractor b e c o m es subject to a royalty which is greater than the royalty to which the extractor w o u ld otherwise have been subject. (2) If the Stale fails to c o m p ly with the terms of an a g r e e m e nt c o n t e m p l a t ed in section 13( 1) and the failure h as a material adverse e c o n o m ic impact on the d e t e r m i n a t i on of the royalty p a y a b le by the extractor that is party to that a g r e e m e n t, the extractor is entitled in respect of the increase in the royalty caused by the failure (and to c o m p e n s a t i on interest at the prescribed rate calculated on the c o m p e n s a t i on from the date of the failure) or to an alternative r e m e dy that eliminates the full impact of the failure. F o r e i gn c u r r e n cy 1 5. A ny a m o u nt received by or accrued to, or e x p e n d i t u re or loss incurred by. an extractor in any currency other than the currency of the R e p u b l ic must be translated to Act No. 28, 2008 MINERAL AND PETROLEUM RESOURCES ROYALTY ACT, 2008 the currency of the R e p u b l ic by applying the spot rate, as defined in section 1 of the I n c o me Tax Act, on the date on which that a m o u nt w as so received or accrued or expenditure or loss w as so incurred. Transitional credits 16. (1) T h e re must be d e d u c t ed from the royalty p a y a b le in respect of a mineral resource the a m o u nt of any lease, royalty or similar p a y m e nt to the State in respect of that mineral resource in t e r ms of any conditions i m p o s ed p u r s u a nt to the laws applicable in respect of an old order right or O P 26 right m e n t i o n ed in S c h e d u le II of the Mineral and P e t r o l e um R e s o u r c es D e v e l o p m e nt Act, as consideration for the r e m o v al or disposal of a mineral or p e t r o l e u m. (2) No deduction is allowed item 9(7) of Schedule II to in terms of subsection (1) in respect of any lease the M i n e r al and Petroleum R e s o u r c es m e n t i o n ed D e v e l o p m e nt Act. in (3) T he a m o u nt to be d e d u c t ed in terms of subsection (1) must not exceed the royalty m e n t i o n ed in that subsection. Act b i n d i ng on State a nd a p p l i c a t i on of o t h er l a ws

17. T h is Act binds the State, and no provision in any other law is c o n s t r u ed as applying or referring to this royalty unless the royalty is specifically m e n t i o n ed in that provision. S h o rt title a nd c o m m e n c e m e nt 18. (1) T h is Act is called the Mineral and P e t r o l e um R e s o u r c es Royalty Act, 2 0 0 8. (2) T h is Act c o m es into operation on 1 May 2 0 09 and applies in respect of a mineral resource transferred on or after that date. Act No. 28, 2008 MINERAL AND PETROLEUM RESOURCES ROYALTY ACT, 2008 S C H E D U LE 1 R E F I N ED C O N D I T I ON OF M I N E R AL R E S O U R C ES Mineral resource name Refined condition Cobalt Copper Cobalt is refined once processed into cobalt metal or cobalt sulphate. 99.5 % refined Copper is refined once processed into copper metal slabs, blister cop­ per or cathode copper of at least 99.0 % purity. Germanium 99.99% refined product Gold Lead Lithium Mercury Refined and smelted to a 99.5 % purity Lead is refined once processed into bars and billets containing at least 99.0 % pure lead. 99.5% LiC03 in concentrate (lithium carbonate) 99.9% purity Nickel (Base metal) Nickel is refined once processed into a metal, or other form (e.g. ferro nickel, nickel metal or nickel sulphate). 99.5% purity Refined and smelted to a 99.9 % purity Platinum Group Metals (iridium, palladium, platinum, rhodium, ruthenium and osmium) Molybdenum 99.99% refined product Silicon Silver Talc- Zinc 98.5% Si Silver is refined once processed to silver metal or silver nitrate. 99.5% refined 98.5% and minus 325 um mesh Zinc is refined once processed into zinc metal, plates or slabs con­ taining at least 98.5 % pure zinc. Mineral resource name Oil and Gas Refined condition Oil Gas At inlet of refinery At inlet of refinery Act No. 28, 2008 MINERAL AND PETROLEUM RESOURCES ROYALTY ACT, 2008 S C H E D U LE 2 U N R E F I N ED C O N D I T I ON OF M I N E R AL R E S O U R C ES Mineral resource name Unrefined condition Aggregates Bulk Antimony Barite 65% Sb content in the concentrate Concentrates with 97% BaS04 Beryllium 70% beryl concentrate Chrome ore in lump, chips and fines (i) 37% to 46% Cr203 in concentrate: (ii) 4% to 10% SiO2 and a (iii) Cr/Fe ratio of 1.25 to 1.45 (chip and lump) or (iv) 0.8% to 6% S i 02 and (v) Cr/Fe ratio of 13 to 1.6 (fine < 1mm) Clay used for bricks Bulk Kaolinite clay used by paper and ceramic sectors Coal Grade A: in situ calorific value equal or greater than 27.5 GMJ/kg Grade B: in silu calorific value equal of greater than 26.5 GMJ/kg and less than 27.5 GMJ/kg Grade C: in situ calorific value equal or greater than 19.0GMJ/kg and less than 26.5 GMJ/kg Grade D: in situ calorific value less than 19.0 GMJ/kg Cobalt Copper 7% Co in a polymineralic matte 20% to 30% Cu Diamond Rough Diamonds Dimension stone: Granite, Sandstone, Slate. Shale, Gneiss. Marble Bulk Fluorspar 80% concentrate Graphite Iron ore Lead Limestone Manganese 86% carbon content 61 % to 64% Fe content Concentrate with a minimum of 50%> Pb Concentrate with a minimum of 54% CaCO, Manganese ore: Mn 37% to Mn 48% and Si + Al less than 11% Mica 48% concentrate Mineral Sand (Titanium) llmenite 75% ilmenite concentrate Rutile Zircon Nickel 53% Rutile concentrate 85% Zircon concentrate 1.4% Ni content Act No. 28, 2008 MINERAL AND PETROLEUM RESOURCES ROYALTY ACT, 2008 Mineral resource name Unrefined condition Niobium 45% N i205 in concentrate Platinum Group Metals (iridium, palladium, platinum, rhodium, ruthenium and osmium) Sand Silver concentrate (150 ppm) Bulk 800g/t Ag in polymineralic base metal Tantalum In concentrate 30% T a Os. Max 0.5% U , Os and T h O, combined Tin 86% cassiterite concentration Tungsten ( C a W 04) and Wolram Minimum 65% W O, in concentrate Uranium Vanadium 80% uranium in concentrate. Oxide (yellow cake) and Uranium Hexafliiuride. Concentrate > 1 % V2Os equivalent and less than 2% calcium and silica bearing gangue minerals ( S i 02 + CaO) Zinc (Base metal) 27% Zn in concentrate Other Minerals not listed elsewhere Concentrate or where the specific mineral is not rendered into a con­ centrate, bulk. e.g. Phosphate Rock, Vermiculite, Semi-precious gemstones (like rose quartz, tiger's eye; corundum; etc). Precious gemstones (like sugilite). Feldspar, Garnet, Peat, Perlite, Rare Earth Elements, Silica, Soda Ash, Wollastonite, Zeolite, etc.