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Precious Metals

South Deep gold mine, 45 km south of Johannesburg in the Witwatersrand Basin, has the largest gold deposit in the world. The mine’s life is expected to extend until 2092.1 According to a recent US geological survey, South Africa still has 6000 tonnes of gold reserves.2

As for platinum, the Republic is by far the largest producer. According to the United States Geological Survey,3 of the 183 000 kilograms produced globally in 2012, South Africa was responsible for 133 000 kilograms – close on 73% – with Russia, the next biggest producer, at 24 600 kilograms.

No wonder there is a statute – the Precious Metals Act 2005 – to regulate all conceivable dealings with these two metals and their ores. The Act falls under the authority of the Minister of Mineral Resources, but the implementation of all the policies and procedures contemplated by the Act is managed by the South African Diamond and Precious Metals Regulator, established by the Diamonds Act 1986.4

A. Unwrought precious metal5

  1. It is an offence to acquire, possess or dispose of any unwrought precious metal if you are not:
    • the holder of a refining licence, and you are acting in accordance with its terms and conditions;6 or
    • authorised by the National Treasury to deal in gold (i.e. an ‘authorised dealer’);7 or
    • in possession of a permit (i.e. a ‘producer’) and won or recovered the metal;8 or
    • the holder of an authorising certificate from the Regulator;9 the holder of a precious metal beneficiation licence, and are acting in accordance with its terms and conditions;10 or
    • the holder of a special permit issued by the Regulator for scientific or beneficiation purposes, or to make jewellery; and the unwrought precious metal is acquired in accordance with that permit and does not exceed a prescribed mass.11

  2. It is an offence to possess any unwrought precious metal if you are not a person contemplated in A.1 or your possession is not in fulfilment of a contract of employment with such a person.12

  3. No person may deliver unwrought precious metal in payment of any debt owed (by anyone) or in consideration of any service rendered (to anyone).13

  4. Any person who buys unwrought precious metal without having satisfied himself that the vendor thereof is lawfully entitled to sell, or dispose of it is guilty of an offence.14

  5. Any person who places any unwrought precious metal in the possession, or on the premises of any other person with intent that such other person be convicted under the Act is guilty of an offence.15

B. Semi-fabricated precious metal16

  1. It is an offence to acquire, possess or dispose of any semi-fabricated precious metal if you are not:
    • the holder of a refining licence, and are acting in accordance with its terms and conditions;17 or
    • an authorised dealer (i.e. authorised by National Treasury to deal in gold);18 or
    • a producer who has won or recovered the unwrought precious metal which has been refined and made into such semi-fabricated precious metal;19 or
    • the holder of a certificate from the Regulator authorising you to acquire or to dispose of it;20 or
    • the holder of a special permit issued by the Regulator for scientific purposes, and the metal does not exceed a prescribed mass;21 or
    • you hold a precious metals beneficiation licence;22 or
    • you hold a jeweller’s permit.23

  2. It is an offence to possess any semi-fabricated metal if you are not a person contemplated in B.1 above, or your possession is not in the fulfilment of a contract of employment with such a person.24

  3. Any person who buys semi-fabricated precious metal without having satisfied himself that the vendor thereof is lawfully entitled to sell, or dispose of it is guilty of an offence.25

  4. Any person who places any semi-fabricated precious metal in the possession, or on the premises of any other person with intent that such other person be convicted under the Act is guilty of an offence.26

C. Refining licences

  1. It is an offence to 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 of that licence).27

  2. It is an offence to be in possession of unwrought precious metal at any place elsewhere than on the licensed premises, or at the place described on the licence unless you are transporting it in accordance with the legal stipulations of the Act.28

  3. It is an offence to conduct business under a name that differs from the name used on the licensed premises or place, unless a new licence in respect of the additional premises or place is granted.29

  4. If a refining licence has expired, or its renewal is refused or has been cancelled, or the authorised activities are discontinued permanently, the person who held the licence must forthwith submit to the Regulator a declaration as to the unwrought precious metal in his possession as at the date (of expiry, cancellation, or termination) and it is an offence not to do so. It is also an offence not to dispose of the unwrought precious metal (in accordance with the Act) within 30 days of the declaration.30 31

  5. If the holder of a refining licence is asked, or approached to participate or facilitate in any unlawful conduct relating to precious metals he must forthwith and in writing advise the Regulator. It is an offence not to do so.32

D. Beneficiation33 licence

  1. The holder of a precious metal beneficiation licence must keep proper books of account, and must submit all prescribed information to the Regulator not later than 90 days after the end of his financial year. It is an offence to contravene this provision.34

  2. It is an offence to conduct any beneficiation activity elsewhere than on the premises, or at the place described or endorsed on the licence.35

  3. It is an offence to be in possession of unwrought or semi-fabricated precious metal at any place elsewhere than on the licensed premises, or at the place described or endorsed in the licence, unless you are transporting it in accordance with the legal requirements of the Act.36

  4. It is an offence to conduct business under a name that differs from the name used on the licensed premises, or place, unless a new licence in respect of the additional premises or place is granted.37

  5. If a refining licence has expired, or its renewal is refused or has been cancelled, or the authorised activities are discontinued permanently, the person who held the licence must forthwith submit to the Regulator a declaration as to the unwrought precious metal in his possession as at the date (of expiry, cancellation, or termination) and it is an offence not to do so. It is also an offence not to dispose of the unwrought precious metal (in accordance with the Act) within 30 days of the declaration.38 39

  6. If the holder of a precious metal beneficiation licence is asked, or approached to participate or facilitate in any unlawful conduct relating to precious metals he must forthwith and in writing advise the Regulator. It is an offence not to do so.40

E. Jeweller’s permit

  1. The holder of a jeweller’s permit must keep proper books of account, and must submit all prescribed information to the Regulator not later than 90 days after the end of the financial year. It is an offence to contravene this provision.41

  2. It is an offence to conduct any jewellery activity elsewhere than on the licensed premises, or at the place described or endorsed on the licence.42

  3. It is an offence for the holder of a jeweller’s permit to be in possession of unwrought or semi-fabricated precious metal at any place elsewhere than on the licensed premises, or at the place described or endorsed in the licence unless he is transporting it in accordance with the legal requirements of the Act.43

  4. It is an offence to conduct business under a name that differs from the name used on the licensed premises, or place, unless a new licence in respect of the additional premises or place is granted.44

  5. If the holder of a jeweller’s permit is asked, or approached to participate or facilitate in any unlawful conduct relating to precious metals he must forthwith and in writing advise the Regulator.45

  6. If a jeweller’s permit has expired, or its renewal is refused or has been cancelled, or the authorised activities are discontinued permanently, the person who held the licence must forthwith submit to the Regulator a declaration as to the unwrought precious metal in his possession as at the date (of expiry, etc.) and it is an offence not to do so. It is also an offence not to dispose of the unwrought precious metal (in accordance with the Act) within 30 days of the declaration.46 47

F. Import and export permits

  1. It is an offence to import any unwrought or semi-fabricated precious metal into the Republic without a permit issued by the Regulator.48

  2. No person may export any unwrought or semi-fabricated gold except with the approval of the National Treasury. It is an offence to do otherwise.49 50

  3. No person may export any unwrought or semi-fabricated metals of the platinum group except with the written approval of the Minister. It is an offence to do otherwise.51 52

  4. Any producer, or any person who imports precious metal must submit to the Forensic Science Laboratory of the South African Police Service such specimens as may be prescribed. It is an offence to fail to do so.53

G. Transportation and conveyance

  1. It is an offence to transport or, in any manner, convey any semi-fabricated or unwrought precious metal outside the boundaries of any mine, works or other property or place where such metal is mined, refined or worked with, unless you are in possession of the prescribed documentation.54

H. Register of transactions

  1. Every licence holder, authorised dealer, and producer who deposits, receives, despatches or disposes of unwrought precious metal must keep a record of all such transactions in a register in the prescribed form and commits an offence if he fails to do so.55

  2. It is an offence not to enter in such register, immediately after the conclusion of each such transaction, its date, the names and addresses of the parties, the nature and mass of the subject of the transaction, and the price received or paid.56

  3. Every holder, authorised dealer and producer must each quarter submit to the Regulator a true copy (in duplicate) of his register for the last preceding quarter, together with an affirmation or a solemn declaration of the correctness thereof, and commits an offence if he fails to do so.57

  4. Every holder, authorised dealer and producer must produce and exhibit such register whenever requested to do so by an inspector from the Regulator (or a sergeant or a rank higher in the police) and commits an offence if he fails to do so.58

  5. Authorised dealers are entitled to buy precious metal, but it is an offence to do so from any person who has not produced a licence, permit or certificate authorising the disposal.59

  6. Any person who fails to comply with any lawful request to produce and exhibit the register or proper books of account required to be kept by him in terms of the Act is guilty of an offence.60

  1. www.mining-tech.com. ↩

  2. www.gold.org - ‘South African production: important but no longer globally significant’. ↩

  3. The data is reproduced on Wikipedia – ‘Platinum’ https://en.wikipedia.org/wiki/Platinum. ↩

  4. See the chapter on Diamonds. ↩

  5. This means unrefined, or less than 99.9% in purity but which has not gone through a manufacturing process; or any article made from such, but not including articles of archaeological interest or those manufactured for a specific purpose. ↩

  6. Section 4(1)(a). ↩

  7. Section 4(1)(b). ↩

  8. Section 4(1)(c) read with section 20(1)(a). ↩

  9. Section 4(1)(d) read with section 20(1)(a) and section 20(2)(c). ↩

  10. Section 4(1)(f) read with section 20(1)(a). ↩

  11. Section 4(1)(e) read with section 20(1)(a). ↩

  12. Section 4(3)(a) and (b) read with section 20(1)(a). ↩

  13. Section 4(4) read with section 20(2)(a). ↩

  14. Section 20(1)(b) . ↩

  15. Section 20(1)(c). ↩

  16. This means metal refined to at least 99.9% purity, and is in the form of sheet, tube, wire, etc. ↩

  17. Section 5(1)(a) read with section 20(1)(a). ↩

  18. Section 5(1)(b) read with section 20(1)(a). ↩

  19. Section 5(1)(c) read with section 20(1)(a). ↩

  20. Section 5(1)(d) r ead with section 20(1)(a). ↩

  21. Section 5(1)(e) read with section 20(1)(a). ↩

  22. Section 5(1)(f) read with section 20(1)(a). ↩

  23. Section 5(1)(g) read with section 20(1)(a). ↩

  24. Section 5(2)(a) and (b) read with section 20(1)(a). ↩

  25. Section 20(1)(b). ↩

  26. Section 20(1)(c). ↩

  27. Section 7(5) read with section 20(1)(a). ↩

  28. Section 7(5) read with section 20(1)(a). ↩

  29. Section 7(6)(c) read with section 20(1)(a). ↩

  30. Or such longer period as the Regulator may allow. ↩

  31. Section 7(8)(a)–(d) read with section 20(2)(a). ↩

  32. Section 7(9) read with section 20(2)(a). ↩

  33. This means, basically, to add value. ↩

  34. Section 8(4) read with section 20(2)(a). ↩

  35. Section 8(6) read with section 20(1)(a). ↩

  36. Section 8(6) read with section 20(1)(a). ↩

  37. Section 8(7)(c) read with section 20(1)(a). ↩

  38. Or such longer period as the Regulator may allow. ↩

  39. Section 8(9)(a)–(d) read with section 20(1)(a). ↩

  40. Section 8(10) read with section 20(2)(a). ↩

  41. Section 9(8) read with section 20(2)(a). ↩

  42. Section 9(9) read with section 20(1)(a). ↩

  43. Section 9(9) read with section 20(1)(a) and section 9(10) read with section 20(2)(a). ↩

  44. Section 9(10)(c) read with section 20(1)(a). ↩

  45. Section 9(11) read with section 20(2)(a). ↩

  46. Or such longer period as the Regulator may allow. ↩

  47. Section 9(7)(a)–(d) read with section 20(2)(a). ↩

  48. Section 10(1) read with section 20(2)(a). ↩

  49. Note: Through a typographical error in the Statute this is not actually criminalised. The criminalising provision, section 20(1)(a) of the Act, refers to section 11(1) but should refer to section 12(1) where the prohibition is recorded. ↩

  50. Section 12(1). (Section 20(1)(a) of the Act, refers to section 11(1) but should refer to section 12(1) where the prohibition is recorded.) ↩

  51. Ditto. ↩

  52. Section 12(2). (Section 20(1)(a) of the Act, refers to section 11(2) but should refer to section 12(2) where the prohibition is recorded.) ↩

  53. Section 22(1) read with section 20(2)(a). ↩

  54. Section 13 read with section 20(2)(a). ↩

  55. Section 15(1)(a) read with section 20(2)(a). ↩

  56. Section 15(1)(b)(i)–(iv) read with section 20(2)(a). ↩

  57. Section 15(2)(a) read with section 20(2)(a). ↩

  58. Section 15(2)(b) read with section 20(2)(a). ↩

  59. Section 20(2)(b). ↩

  60. Section 20(2)(d). ↩

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