PRECIOUS METALS BILL

(As introduced in the National Assembly as a section 75 Bill; explanatory summary of Bill published in government Gazette No. of ) (The English text is the official text of the Bill

MINISTER OF MINERALS AND ENERGY

[B -2005]

BILL

To provide for the acquisition, possession, beneficiation and disposal of precious metals; and to provide for matters connected therewith.

BE IT ENACTED by the Parliament of the Republic of South Africa as follows—-

1. In this Act, unless the context indicates otherwise—

"Director-General" means the Director-General of the Department of Minerals and Energy;

"jeweller's permit" means a permit issued in terms of section 7(1);

"Minister" means the Minister of Minerals and Energy;

"minted bar" means a minted bar of the type and quality contemplated in section 18(e);

"precious metals" means—

(a) the metal gold and metals of the platinum group, and the ores of any such metals; and

2. any other metal which the Minister has declared by proclamation in the Gazette to be a precious metal for the purposes of this Act, an the ores of any such metal;

"prescribed" means prescribed by regulation made in terms of section 18;

"this Act" includes the regulations made in terms of section 18;

Prohibitions relating to dealing in or possession of unwrought precious metal

2. (1) Save as is otherwise provided in this Act, no person may buy, sell, deal in, receive or dispose of, either as principal or as agent, any unwrought precious metal, unless—

1. he or she is the holder of a refining licence and concludes the transaction in accordance with the terms of his or her licence;
2. he or she is a banker within the Republic such unwrought precious metal has been won by him or her from land on which he or she is lawfully entitled to prospect or mine for precious metals;
3. he or she has obtained a certificate from the Director-General authorising him or her to be in possession or to dispose of such unwrought precious metal; or
4. such unwrought precious metal is required for scientific purposes and the person in possession thereof has purchased such unwrought precious metal under the authority of and in accordance with a permit issued by the Director-General.

2. No certificate contemplated in subsection (l)(d) may be issued to any person except in consultation with the National Commissioner of the South African Police Service or a person designated by him or her.
3. No person may have in his or her possession any unwrought precious metal unless he or she is—

1. a person exempted under subsection (1); or
2. in possession of such precious metal in fulfilment of a contract of service with any person contemplated in subsection (1)(a) to (e).

2. No person may deliver or cause to be delivered unwrought precious metal in payment of any debt due from him or her or any other person or in consideration of any service rendered or to be rendered to him or her or any other person.

Prohibitions relating to dealing in or possession of wrought precious metal
3. (1) Save as is otherwise provided for in this Act, no person may buy, sell, deal in, receive or dispose of, either as principal or as agent, any wrought precious metal, unless he or she—

1. is a person exempted in terms of section 2(1), but in the case of the holder of a certificate issued in terms of section 2(1)(d) and the holder of a permit issued in terms of section 2(1)(e), such wrought precious metal may only be disposed of to a banker or the holder of a refining licence;
2. holds a precious metals beneficiation licence; or
3. holds a jeweller's permit.

(2) No person may have in his possession any wrought precious metal unless he or she is—

1. a person exempted under subsection (1); or
2. in possession of such precious metal in fulfilment of a contract of service with any person contemplated in subsection (1)(a) to (c).

Consideration of applications

1. must have regard to the promotion of equitable access to and orderly local beneficiation of precious metals; and
2. may have regard to the requirements of the broad based socio economic empowerment Charter developed in terms of section 100 of the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002).

Issue and renewal of refining licences

1. to buy or receive unwrought precious metal in any form from the South African Mint or any person exempted in terms of section 2(1)(a) to (e) or any other person or class of persons approved by the Director-General after consultation with the National Treasury;
2. to refine or change the form of unwrought precious metal in his or her lawful possession and thereafter to dispose of such precious metal, whether wrought or unwrought, as allowed by law and in accordance with the terms of his or her licence or the provisions of this Act to the South African Mint or any banker;
3. to extract precious metal from any material, substance or solution in his or her lawful possession and to dispose of such precious metal in accordance with the terms of his or her licence or the provisions of this Act; or
4. to buy or receive from the holder of a refining licence, banker or producer exempted under section (2)(1)(a), (b) or (c) any material, substance or solution in the lawful possession of that holder, banker or producer containing precious metal, and to extract from such material, substance or solution unwrought precious metal and dispose of the unwrought precious metal in accordance with this Act.

2. Any person who is refused a refining licence may, within 30 days after having been notified by the Director-general of the refusal, appeal to the Minister who may dismiss the appeal, direct the Director-General to issue to such person, subject to the succeeding provisions of this section, such licence or make any other order he or she deems fit.
3. Before the Director-General issues a refining licence the applicant for the licence must pay the prescribed fee.
4. A refining licence terminates in accordance with the terms and conditions under which it was issued.
5. The holder of a refining licence may not carry on any activity authorised by the licence elsewhere than on the premises or at the place described on the licence or in any endorsement thereof in terms of subsection (6), and the holder may not be in possession of unwrought precious metal at any place elsewhere than on the premises or at the place so described unless he or she transports such unwrought precious metal as provided for in section 9.
6. (a) If at any time it becomes necessary for any holder of a refining licence to transfer or extend the activities referred to in subsection (5) to any premises or place not described on his or her licence the Director-General may endorse on the licence the situation of such new or additional premises or place and must forthwith in writing notify the National Commissioner of the South African Police Service of the endorsement.

(8) Whenever—

1. any application under subsection (7) for the renewal of a refining licence is refused by the Director-General and no appeal against such refusal is lodged with the Minister or any appeal so lodged is dismissed;
2. any refining licence has expired and no application for its renewal has been made by the holder thereof;
3. any refining licence has been cancelled under this Act;
4. the activities authorised by such licence are discontinued permanently, the person who held the licence must forthwith submit to the Director-General a solemn declaration of the mass of the unwrought precious metal in his or her possession at the date such licence expired or was refused or cancelled or such activities were discontinued, and dispose of such unwrought precious metal in accordance with this Act within 30 days after the date of such declaration or within such longer period as the Director-General may allow.
   

Issue and renewal of precious metals beneficiation licence

1. to buy or receive wrought precious metal in any form from any person authorised under this Act to sell, deal in or dispose of such wrought precious metal: and
2. change the form or add value in any manner to wrought precious metals in his or her lawful possession, excluding changing the form for the purposes of jewellery manufacturing contemplated in section 7.

2. Any person who is refused a precious metals beneficiation licence may, within 30 days after having been notified by the Director General of the refusal, appeal to the Minister who may dismiss the appeal, direct the Director-General to issue to such person, subject to the succeeding provisions of this section, such licence or make any other order he or she deems fit.
3. Before the Director-General issues a precious metals beneficiation licence the applicant for the licence must pay the prescribed fee.
4. A precious metals beneficiation licence does not entitle the holder thereof to purchase or otherwise obtain unwrought precious metal.
5. The holder of a precious metals beneficiation licence must keep proper books of account in accordance with generally accepted accounting practice and must submit annually such information as may be prescribed to the Director-General by not later than 90 days after the end of his or her business' financial year.
6. A precious metals beneficiation licence terminates in accordance with the terms and conditions under which it was issued.
7. The holder of a precious metals beneficiation licence may not carry on any activity authorised by the licence elsewhere than on the premises or at the place described on the licence or in any endorsement thereof in terms of subsection (8), and the holder may not be in possession of wrought precious metal at any place elsewhere than on the premises or at the place so described unless he or she transports such wrought precious metal as provided for in section 9.
8. (a) If at any time it becomes necessary for any holder of a precious metals beneficiation licence to transfer or extend the activities referred to in subsection (7) to any premises or place not described on his or her licence the Director-General may endorse on the licence the situation of such new or additional premises or place and must forthwith in writing notify the National Commissioner of the South African Police Service of the endorsement.

Issue and renewal of jewellers' permits

1. to buy or receive wrought precious metal in any form from any person authorised under this Act to sell, deal in or dispose of wrought precious metals; and
2. to change the form of, or in any other manner add value to, wrought precious metals in his or her lawful possession for purposes of jewellery manufacturing.

2. Any person who is refused a jeweller's permit may, within 30 days after having been notified by the Director General of the refusal, appeal to the Minister who may dismiss the appeal, direct the Director-General to issue to such person, subject to the succeeding provisions of this section, such permit or make any other order he or she deems fit.
3. Before the Director-General issues a jeweller's permit the applicant for the permit must pay the prescribed fee.
4. A jeweller's permit terminates in accordance with the terms and conditions under which it was issued.
5. A jeweller's permit does not entitle the holder thereof to purchase or otherwise obtain unwrought precious metals.
6. (a) A jeweller's permit may upon payment of a prescribed fee be renewed for a period not exceeding five years if application for such renewal is made in the prescribed manner at least 30 days before the expiration of such permit.
   (b) Subsection (2) applies with the necessary changes in connection with the refusal by the Director-General of any application in terms of paragraph (a).
7. Whenever

1. any application under subsection (6) for the renewal of a jeweller's permit is refused by the Director-General and no appeal against such refusal is lodged with the Minister or any appeal so lodged is dismissed;
2. any jeweller's permit has expired and no application for its renewal has been made by the holder thereof;
3. any jeweller's permit has been cancelled under this Act;
4. the activities authorised by such licence are discontinued permanently, the person who held the permit must forthwith submit to the Director-General a solemn declaration of the mass of the wrought precious metal in his or her possession at the date such licence expired or was refused or cancelled or such activities were discontinued, and dispose of such wrought precious metal in accordance with this Act within 30 days after the date of such declaration or within such longer period as the Director-General may allow.

2. The holder of a jeweller's permit must keep proper books of account in accordance with generally accepted accounting practice and must submit annually such information as may be prescribed to the Director-General by not later than 90 days after the end of the financial year of the holder's business.

2. The holder of a jeweller's permit may not carry on any activity authorised by the permit elsewhere than on the premises or at the place described on the permit or in any endorsement thereof in terms of subsection (10), and the holder may not be in possession of wrought precious metal at any place elsewhere than on the premises or at the place so described unless he or she transports such wrought precious metal as provided for in section 9.
3. (a) If at any time it becomes necessary for any holder of a jeweller's permit to transfer or extend the activities referred to in subsection (9) to any premises or place not described on his or her permit the Director-General may endorse on the permit the situation of such new or additional premises or place and must forthwith in writing notify the National Commissioner of the South African Police Service of the endorsement.

Permit to import precious metals

2. The Director General or any member of the South African Police Service may at any time inspect any precious metal contemplated in subsection (1) and take such sample as may be reasonable to establish or confirm the origin and content of such precious metal.
3. The permit issued in terms of subsection (1) must state the origin of the precious metal in question, the purpose of the import and the date by which such precious metal must be exported from South Africa
   

Transportation and conveyance of precious metals

9. A person may not transport or in any manner convey any precious metal, whether wrought or unwrought, outside the boundaries of any mine, works or other property or place in which such metal is located, unless he or she is appointed, in writing, by a person contemplated in section 2(1) (a) to (e) and unless he or she is in possession of a certified copy of the relevant person's licence, right, permit or certificate, as the case may be.


Banker entitled to buy precious metal in any form

10. (1) A banker may buy precious metal, whether wrought or unwrought, in any form from any person authorised to sell or dispose of wrought or unwrought precious metals in terms of this Act on production by such person of a licence, permit, right or certificate authorising the sale of such metal, but no such licence, permit, right or certificate is required in respect of unwrought precious metal in bar, ingot, button or other form identifiable by a specific mark cast, or die-stamped on each bar, ingot, button or other form, if such mark has been registered in the office of the mining commissioner and written particulars thereof have been furnished to such banker by the mining commissioner.

Register of transactions to be kept by persons dealing in unwrought precious metal

1. the date of the transaction;
2. the names and addresses of the parties to the transaction;
3. the nature and mass of the material or the mass of the precious metal which is the subject of the transaction;
4. the price, if any, received or paid.

2. Every person required by this section to keep a register must on a quarterly basis submit to the Director-General a true copy in duplicate of such register for the last preceding quarter, together with a solemn declaration of the correctness thereof, and must produce and exhibit such register whenever requested to do so by any member of the South African Police Service holding a rank of or above the rank of sergeant.
3. (a) Subsections (1) and (2) apply with the necessary changes and subject to paragraph (b) to the holder of a permit contemplated in section 2(1)(e).

Powers of police to inspect, search and seize

1. seal, mark or otherwise secure any package or container found in or on such premises;
2. take an account of all precious metal found in or on such premises and, if necessary, take such precious metal into custody;
3. search any person on those premises if there are reasonable grounds for believing that the person has personal possession of an article, document or record that has a bearing on the investigation;
4. take extracts from, or make copies of any book, document or record that is on or in the premises and that has a bearing on the investigation;
5. demand the production of and inspect any relevant licence, permit, certificate as provided for in any law; and
6. take samples of any substance that is relevant to the inspection.

1. issue a receipt for it to the owner or person in control of the premises; and
2. unless it is an item prohibited in terms of this Act, return it as soon as practicable after achieving the purpose for which it was removed.

1. make available or accessible or deliver to the member any document, record, object or material which pertains to an investigation contemplated in subsection and which is in the possession or under the control of the occupant or other person;
2. furnish such information as he or she has with regard to the matter under investigation; and
3. render such reasonable assistance as the member may require to perform his or her functions in terms of this Act efficiently.

2. Before questioning any person at the premises in question, the member of the South African Police Service must advise that person of his or her right to be assisted at the time by an advocate or attorney, and allow that person to exercise that right.
3. A warrant contemplated in subsection (1) may be issued by a judge or a magistrate—

1. in relation to premises on or from which there is reason to believe that a contravention of this Act has been or is being committed; and
2. if it appears from information on oath or affirmation that there are reasonable grounds to believe that there is evidence available in or upon such premises of a contravention of this Act.

2. the warrant may impose restrictions on the powers of the member of the South African Police Service.
3. A warrant issued in terms of this section—

1. it is executed;
2. it is cancelled by the person who issued it or, if such person is not available, by any person with like authority;
3. the expiry of one month from the day of its issue; or
4. the purpose for the issuing of the warrant has lapsed, whichever occurs first; and

Identification prior to entry, and resistance against entry

1. audibly announce that he or she is authorised to enter the premises and demand admission to the premises; and
2. notify the person in control of the premises of the purpose of the entry, unless there are reasonable grounds to believe that such announcement or notification might defeat the purpose of the search.

(2) The member of the South African Police Service must—

1. hand to the person in control of the premises a copy of the warrant or, if such person is not present, affix such a copy to a prominent place on the premises; and
2. on request of the person in charge of such premises show his or her certificate of appointment to that person.

Entry and search of premises without warrant

1. the person who is competent to do so consents to such exercise; or
2. there are reasonable grounds to believe that a warrant would be issued in terms of section 12(5) and that the delay in obtaining the warrant would defeat the object of the warrant.
   

Disposal of items seized by member of the South African Police Service

15. The member of the South African Police Service must deal with and dispose of any seized item in the manner provided for in Chapter 2 of the Criminal Procedure Act, 1977 (Act No. 51 of 1977).

Offences and penalties

16. (1) Any person who—

1. contravenes section 2(1) or (3), 3(1) or (2), 5(5), 6(7) or (8) or 7(5), (9) or (10);
2. buys unwrought precious metal without having satisfied himself or herself that the vendor thereof is lawfully entitled to sell or dispose of such metal; or
3. maliciously places any unwrought precious metal in the possession or on the premises of any other person with intent that such other person may be convicted under any provision of this Act relating to unwrought precious metal,
   
   is guilty of an offence and liable on conviction to a fine not exceeding R one million or to imprisonment for a period not exceeding 20 years or to both such fine and such imprisonment, and if any person so convicted is at the time of his or her conviction the holder of a licence, permit, right or certificate contemplated in this Act, he or she shall forfeit such licence, permit, right or certificate and any right of renewal thereof for such period as the court convicting him or her may direct.

(2) Any person who—

1. contravenes section 2(5), 5(8), 7(8) or 10(1);
2. being a banker or refiner, buys unwrought precious metal from any person who has not produced a licence, right, permit or certificate as provided in section 10(1) or fails to comply with section 10(2); or
3. contravenes section 11(1), (2) or (3) or fails to comply with any lawful request to produce and exhibit the register or proper books of account required to be kept by him or her in terms of this Act,
   is guilty of an offence and liable on conviction to a fine not exceeding five hundred thousand rand or to imprisonment for a period not exceeding 10 years, and if any person so convicted is at the time of his or her conviction the holder of a licence, permit right or certificate contemplated in this Act, he or she shall forfeit such licence, permit, right or certificate and any right of renewal thereof for such period as the court convicting him or her may direct.
   

Disposal of precious metal in case of conviction and forfeiture of moneys, etc., in certain circumstances

2. Whenever any member or agent of the South African Police Service has come to an agreement with any person to transfer possession of any wrought or unwrought precious metal to such person upon payment or delivery by him or her to such member or agent of an amount in money or other consideration, property or security, and such person is subsequently in connection with such transaction convicted of an offence under this Act, and any money, consideration, property or security was paid or delivered by the said person to such member or agent either an account of the transfer of possession of such precious metal to that person, or in the expectation that the possession of such precious metal will be transferred to him or her, such money, consideration, property or security shall, notwithstanding anything to the contrary in any law contained, be forfeited to the State and be disposed of as directed by the National Treasury.
3. If the owner of any mine can satisfy the court or police official concerned on a balance of probabilities that any unwrought precious metal that has been or would otherwise be forfeited to the State in terms of this section, the Criminal Procedure Act, 1977 (Act No. 51 of 1977), or the provisions of any other law was mined in that mine such precious metals may not be forfeited to the State but must be returned to that owner.
4. Before returning any precious metal to any owner of a mine in terms of subsection (3) the court or police official concerned may require from that owner to indemnify the State against any claims to such unwrought precious metal or to provide such guarantees in that regard as the court or police official concerned may reasonably require.
5. A forfeiture in terms of subsections (1) and (2) does not affect the right which the owner of the precious metals or any person other than the convicted person may have to the property forfeited, excluding money so forfeited, if he or she satisfies the court concerned that he or she did not know that such property was being used or would be used for the purpose of or in connection with the commission of the offence in question or that he or she could not prevent such use.
   

1. 18. The Minister may by notice in the Gazette make regulations regarding—
   (a) the granting of certificates, permits, and licences or other authorities issued or granted in terms of this Act;
2. the cancellation of any certificates, permits, licences or other authorities issued or granted in terms of this Act;
3. the control and prevention of illegal acts pertaining to precious metals;
4. the requirements for broad based socio economic empowerment;
5. the type and quality of minted bars that will be regarded as minted bars for the purpose of this Act;
6. the circumstances under which minted bars may be held and traded and the documentation related thereto;
7. in consultation with the South African Reserve Bank, the quantity of minted bars that may be produced in the country;
8. anything which may or must be prescribed in terms of this Act; and
9. any ancillary or incidental administrative or procedural matter that it is necessary to prescribe for the proper implementation or administration of this Act.
   

Repeal of law, transitional provisions and savings

19. (1) The Mining Rights Act, 1967 (Act No. 20 of 1967), is hereby repealed.

2. Any application for a recovery works licence in terms of section 144 of the Mining Rights Act, 1967 (Act No. 20 of 1967), for a jeweller's permit in terms of section 145 of that Act or for any certificate, permit or licence listed in section 143 of that Act immediately before this section took effect, or exemptions lodged under that Act but not finalised before this section took effect, must be regarded as having been lodged in terms of the corresponding provision of this Act.
3. Any certificate, permit, licence, exemption or other form of authorisation issued before this section took effect, continues in force for a period not exceeding two years as from the date on which this Act took effect, subject to the terms and conditions under which they were granted or issued or were deemed to have been issued or granted.
4. Any person who wishes to continue with any activity in relation to which a certificate, permit, licence or any other form of authorisation has been issued or granted under this Act after the expiry of the two years contemplated in subsection (2), must apply for the relevant certificate, permit, licence or authorisation in terms of this Act before the expiry of the two years contemplated in that subsection.
5. Any certificate, permit, licence or authorisation in respect of which an application has been lodged within the period referred to in subsection (3) remains valid until such time as the application for the certificate, permit, licence or authorisation, as the case may be, is granted and dealt with in terms of this Act, or is refused.

Short title and commencement