Ma tt ers r ela ting t o the Financial Pr o vision R egula tions and T he r emo v al of the implicit r esponsibility of the en vir onmental as ses sment pr actitioner r egar ding c onsulta tions betw een go v ernment departments because this is a r esponsibility of the C ompet ent A uthority Dr aft Pr eserv a tion and De v elopment of A gricultur al Land Fr ame w ork Bill 20 16 T he Miner als C ouncil pla y ed a piv otal r ole in the Nedlac pr oc es s as part of the busines s c ons tituenc y or ganised thr ough BUS A in ensuring tha t implica tions br ought about b y the Pr eserv a tion and De v elopment of A gricultur al Land Bill t o the mining indus try w er e adequa t ely discus sed T he Bill pr oposed the additional r equir ement of the authorisa tion b y the Minis t er of A gricultur e f or mining activities on agricultur al land and also pr oposes the declar a tion of no go ar eas f or mining on agricultur al land W hile the mining indus try ackno wledged tha t ther e might be individual cases tha t r equir e k e y c onsider a tion of agricultur al ma tt ers it w as sugges t ed b y the Miner als C ouncil tha t those c ould be easily int egr a t ed within the e xis ting authorisa tion pr oc es ses In an a tt empt t o fnd a sus tainable solution the Miner als C ouncil as a member of BUS A pr oposed tha t a go v ernment position on the Bill should be sought as the dif er enc e betw een the mining and agricultur e sect or r ela t es t o a polic y impas se ther ef or e go v ernment mus t pr onounc e its polic y position on the c ompetition betw een the tw o sect ors T his pr oposal nec es sita t ed tha t a t some point the Nedlac pr oc es s be halt ed t o allo w f or v arious engagements betw een the Miner als C ouncil the agricultur e sect or int er es ts and af ect ed parties on the Bill outside of tha t pr oc es s C onsequently both the DMRE and the Department of A gricultur e w er e engaged t o seek the go v ernment position on the mutual c oe xis t enc e of mining and agricultur e A Nedlac r eport tha t clearly r efects the div er gent vie w s betw een the mining and agricultur e indus tries w as de v eloped f or c onsider a tion b y P arliament T his giv es P arliament the opportunity t o appr ecia t e the polic y implica tions of the Bill f or mining It is anticipa t ed tha t further engagement on these is sues will be tak en up b y P arliament during s tak eholder c onsulta tions when the Bill is intr oduc ed Carbon T ax A ct T he Carbon T ax A ct came int o ef ect on 1 June 20 19 and with it ar e ac c ompan ying dir e fnancial and oper a tional implica tions f or mining c ompanies As a pric e tak er the mining indus try is particularly impact ed and is also susc eptible t o pot ential bor der tax imposed b y f or ins tanc e the Eur opean Union which is South A frica s leading tr ade partner T he go v ernment has intr oduc ed measur es in the f orm of allo w anc es thr ough r egula tions in the A ct tha t w ould as sis t in alle via ting the impact of the tax in phase one of its implementa tion T hese include T r ade e xposur e r egula tions tha t include mining as one of the f e w indus tries tha t will aut oma tically beneft fr om the maximum tr ade e xposur e disc ount GHG int ensity benchmark r egula tions Mining c ompanies within the PGM c oal and gold sect ors perf orming belo w their published benchmarks will beneft fr om a perf ormanc e disc ount on the tax Despit e the allo w anc es pr o vided f or in the A ct the Miner als C ouncil not es tha t the carbon tax has the pot ential t o er ode pr oftability thr ough incr easing c os ts and henc e will cause the sect or t o further c ontr act T he f act tha t the pos t20 22 position in t erms of the c ontinua tion of the allo w anc es and also the actual alignment with carbon budget has not been discus sed cr ea t es r egula t ory unc ertainty which perpetua t es a situa tion of limit ed busines s in v es tment and further hinders planning f or futur e tax liabilities Clima t e Change Bill T he Miner als C ouncil w as activ ely in v olv ed in the discus sions of the Clima t e Change Bill a t Nedlac as part of the busines s c ons tituenc y thr ough BUS A T he k e y is sue f or mining in this Bill w as the po w ers of the pr o vinc es and municipalities which ha v e the pot ential t o c onfict with the na tional manda t e of mining as pr o vided f or in the MPRD A Mos t importantly the c ertainty on go v ernment int ention with the polic y pr oposals ar ound the sect or al emis sion tar gets and carbon budget r emained the k e y is sues f or discus sion b y busines s a t Nedlac T his Bill w as withdr a wn fr om the Nedlac pr oc es s b y the Minis t er of En vir onment F or es try and Fisheries f or further r efning within the department and is e xpect ed t o be sent back t o Nedlac in due c ourse t o r esume engagements Na tional En vir onmental Management A ct Financial Pr o vision R egula tions During the y ear under r e vie w the Miner als C ouncil c ontinued t o engage the DEFF on the abo v e mentioned dr aft r egula tions tha t w er e published f or c omment in Ma y 20 19 Although ther e has been signifcant impr o v ement made in the curr ent v ersion of the dr aft r egula tions mos t of the indus try c onc erns w er e not addr es sed in these ne wly pr oposed r egula tions W her e amendments w er e m a d e t h e s e w e r e not sa tisf act orily addr es sed T he is sues of c onc ern included int er alia the f ollo wing T he methodology f or calcula tion of fnancial pr o vision sugges ting unjus tifable escala tion of the fnancial pr o vision with CP12 pr o visionals and gener als c ontingencies and V A T P age 7 3 MINERALS C OUNCIL SOUTH AFRICA INTEGRA TED ANNU AL REVIEW 20 19