It has been almost a decade in the making, but after a few postponements, Carbon Tax bill will come into effect on 1 June.

And while the legislation has been vehemently opposed by the mining industry, its effect on may not be as drastic as they think. Gerard Peter reports.

In 2016, South Africa was part of the Paris Agreement on Climate Change and committed to reduce its greenhouse gas emissions by 42% by 2025.

One way to get the ball rolling is to implement a carbon tax, payable by all companies that are liable to report their greenhouse gas emissions to government.

This article first appeared in Mining Review Africa Issue 4, 2019
Read the full digimag here or subscribe to receive a print copy here.

For the most part, the tax has not been well received by industry. For example, the Minerals Council South Africa (MSCA) opposes the legislation for a number of reasons.

These include the fact that the industry is a significant contributor to GDP and a major employer and the tax will have a significant impact on the sustainability of many mining operations.

It further argues that the tax will add significant costs to operations and thus undermine the profitability of the sector and negatively impact on its employment potential.

The issue is further complicated by the fact that the mining sector is a price taker that and cannot simply pass the costs to consumers of its products.

However, Robbie Louw of Promethium Carbon – a company that specialises in advising on carbon emissions and climate change – believes that the impact on mining companies will be minimum and is necessary.

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