Vortex Accounting Services (Pty) Ltd - News, articles and cooperation

News

Mining merger

3 months ago

Royal Bafokeng shares gain after green light for R860m merger

Jan 17 2018 13:07 

Lameez Omarjee

 

RELATED ARTICLES

Exceptional 910 carat gem diamond found in Lesotho

Royal Bafokeng Platinum gets nod for ABMS

Palladium poised to become formidable threat to platinum

Mpumalanga communities get 16.1% stake in Nkomati coal mine

The mine that stole Christmas

Sibanye buying long-suffering Lonmin in R5.17bn deal

 

Cape Town – A merger worth about R860m between two platinum mines in the North West province has been conditionally approved by the Competition Tribunal.

According to a statement from the tribunal issued on Tuesday afternoon, the merger is between Royal Bafokeng Platinum [JSE:RBP] and Maseve mine, a platinum mine located near the city of Rustenburg.

Royal Bafokeng Platinum will acquire Maseve's concentrator plant and certain surface assets for $58m (R714m) as well as the total issued capital of Maseve mine to the value of $12m (R148m), Royal Bafokeng said in a note to shareholders on Wednesday.

The group's share price gained just over 9% on Tuesday at around 16:30, after the news of the approval was made public. At 12:00 on Wednesday Royal Bafokeng shares were trading at R32.99, up 0.5% on the day. 

The terms of the merger were decided by November 23 2017 and the mines had since waited for approval from the tribunal, which was granted this week.

The conditions for the merger are that Royal Bafokeng employs 115 staff members at its concentrator plant, and gives preference to retrenched employees, the tribunal explained.

“To the extent that these employees are no longer available, Royal Bafokeng Platinum will endeavour to source employees from the local community in Rustenburg.”

READ: Royal Bafokeng Platinum gets nod for ABMS

Royal Bafokeng will have to take over 20 permanent employees from Maseve, and the mine should also give preference to retrenched employees for future job opportunities.  

Royal Bafokeng Platinum is controlled by the Royal Bafokeng Nation Development Trust, while Maseve has been under the control of the company Platinum Group Metals. Development of the Maseve mine started in 2010 and it was commissioned in February 2016.

Articles

VAT increase effect

2 months ago

Gigaba wasn’t being honest about effect of VAT hike – expert

 

173

 

Yadhana Jadoo

 

Finance Minister Malusi Gigaba delivering the budget speech, 21 February 2018, Cape Town. Picture: Jacques Nelles

Finance Minister Malusi Gigaba delivering the budget speech, 21 February 2018, Cape Town. Picture: Jacques Nelles

 

To add additional injury, the plastic bag levy is to be increased by 50% from April 1.

 

Finance Minister Malusi Gigaba’s assertion during his Budget Speech last week that South Africa’s first VAT increase in 25 years will only affect richer households is incorrect, as all people, including the poor, will directly feel its effects.

“While the need for additional tax revenues was clear and the increase in the VAT rate inevitable, the burden of the additional R22.9 billion in tax revenues will ultimately still be borne by individuals, whether directly or indirectly – a large portion of them being some of the poorest in the country,” said Cecilia Stassen, senior tax consultant at Mazars. With effect from April, the VAT rate will be increased from 14% to 15%.

Stassen said “although we are told that our VAT rate is still low compared to our peers”, this increase, together with some of the other tax increases, “will impact a great number of South Africans”.

“Minister Gigaba went to great lengths to emphasise that although the VAT proposal will increase the cost of living for all households, the current zero-rating of paraffin and basic food items such as maize meal, brown bread, dried beans and rice will limit the impact on the poorest households.

“But let us put this into perspective by looking at the expenses affected by the VAT increase.”

While basic foodstuffs are zero-rated, meat and chicken products are not, she said. “Neither are household cleaning supplies, basic toiletries, baby formula and diapers, or even basic household goods and appliances. All of these items contained in the average South African’s shopping basket will be affected by the increase in the VAT rate.

“To add some additional injury, the plastic bag levy is to be increased by 50% to 12 cents per bag, effective April 1, to reduce litter and dissuade consumers from buying plastic bags.”

Additionally, transport was another area of concern through the 52 cents per litre increase in the fuel levy as of April 4.

This comprised a 22 cents per litre increase in the general fuel levy and 30 cents per litre in the Road Accident Fund Levy.

“The change in the VAT rate is bound to further affect the cost of bus, train and taxi transport for daily commuters,” Stassen said. “The provision of passenger transport is an exempt supply for VAT purposes, which means that the provider of the transport may not claim input VAT on expenses incurred.

“These expenses will include the cost of the vehicles, the continued cost of repairs and maintenance and the cost to replace stolen or broken infrastructure. All these will increase as a result of the increase in the VAT rate.

“While an exempt supply for VAT purposes means that VAT is not added to the fare and it therefore is not directly affected by the increased VAT rate, the hike in operational cost to the service provider will be passed on to the end user and result in an increased fare.”