Government remains committed to ensuring that South Africa continues to benefit equitably from its mineral wealth, while reaffirming that there are no current plans to reform the country's mineral royalty regime.

Responding to oral questions in the National Assembly on Tuesday, President Cyril Ramaphosa addressed concerns raised by members regarding the country's ability to fully capture the potential fiscal benefits of its mineral resources amid a global surge in demand for metals and minerals critical to the renewable energy transition.

"Any company that extracts a mineral resource in our country is required to pay the South African government a mineral royalty. This is because mineral resources are finite and cannot be replaced.

"While it is always good to review existing policies against national priorities, there is no intention at this stage to reform the current mineral royalty regime," the President said.

On the issue of the resource rent taxes, the President said that such taxes aim to ensure that companies extracting minerals pay a larger share of their profits to government whenever profits are high.

He explained that South Africa's mineral royalty regime incorporates an element of the principle underlying resource rent taxes.

The royalty rate is applied to the sales value of a mineral and is determined by a formula that varies according to profitability, as well as whether the mineral has been refined or is unrefined.

"There is a minimum rate to ensure that even if profitability is low, the country is still reimbursed for resources that are extracted. In this way, government collects more corporate tax revenue and mineral royalty revenue during commodity booms leading to a higher level of taxation," the President said.

President Ramaphosa cited statistics from the South African Revenue Service which show that mineral royalties doubled from R14.2 billion to R28.5 billion between 2020/21 and 2021/22 because of the commodity boom.

They remained elevated in 2022/23 before dropping to almost R16 billion in 2023/24, indicating that companies were not as profitable in that year.

In addition to the payment of mineral royalties, mining companies contribute to national revenue through the payment of corporate income tax, capital gains tax on the disposal of assets, VAT and employees' pay-as-you-earn tax contributions.

In the past financial year, the mining industry paid 14% of all corporate taxes in South Africa. Earlier this month, Cabinet adopted a Critical Minerals Strategy for the country, which places a sharper focus on domestic mineral value addition.

"The strategy itself aims to maximise the country's potential particularly in the global market for critical minerals, particularly those crucial for the country's just energy transition and the ones for which the country holds comparative advantage.

"This strategy aims to ensure that South Africa derives greater benefits from its mineral wealth through beneficiation, through localisation and the people who work for those companies," President Ramaphosa said.