South Africa’s platinum and iron ore producers will generate additional tax revenues for the nation’s cash-strapped government as a rally in metal prices buoys their earnings, according to Morgan Stanley.
Royalty payments are estimated to climb 70% this year for the listed mining companies covered by the bank, while tax payments could increase by as much as 80%, Morgan Stanley analysts including Christopher Nicholson said in a note. Miners such as Anglo American Platinum Ltd. and Kumba Iron Ore Ltd. are reaping windfall profits from higher palladium, rhodium and iron ore prices, while a weaker rand lowers their costs.
