Controversial changes to South Africa’s mineral laws have been passed in the National Assembly, despite warnings that they could deter investors and damage the country’s mining and energy industries.

The Mineral and Petroleum Resources Development Act Amendment Bill included a raft of regulations that empowered the Minister of Mineral Resources to take key decisions. One of the most contentious aspects of the legislation was a new section, which would allow the State to have a free 20% stake in all exploration and production rights.

The government would also be able to buy an unspecified additional share at “an agreed price”. This replaced the 30% ceiling on an additional share acquisition and ‘fair market value’ clauses that were subsequently removed.

Mineral Resources Minister Susan Shabangu told the National Assembly the changes were vital to bring about transformation in the industry and change historical ownership patterns.

“We are resolute in our commitment to keep the transformation agenda at the centre of development in South Africa, as contained in the bill. There can be no sustainable mining and growth of the industry without going to the very heart of transformation.”

Shabangu hit back at her detractors in Parliament. 

“We are on the path of changing the mining and petroleum industry, whether you like it or not. Change is painful, change is bitter, especially when you are stuck in the past. This Act is about the people of South Africa.”

Opposition Members of Parliament (MPs) and oil and mining companies had warned that the new legislation created uncertainty and could push prospective investors to set their sights elsewhere, at great cost to South Africa.

The Amendment Bill, which was passed in the National Assembly with 226 votes in favour and 66 against, also allowed for the Minister to have regulatory powers to declare certain minerals strategic and block exports of them.

Further, it could see producers processing certain minerals being forced to sell part of their production to local beneficiators in prescribed quantities, qualities and timelines at the mine gate price or at an agreed price.

Democratic Alliance (DA) Mineral Resources Shadow Minister James Lorimer accused the African National Congress (ANC) of risking jobs and tipping the balance in favour of "cronyism". 

“The [Amendment] Bill contains more than 30 instances where key rules will be decided by regulation. Regulation is decided on by the Minister of Mineral Resources. It is opaque and can be changed rapidly. It provides none of the certainty that investors need and, thus, will put us in a worse position than we already are,” Lorimer told the National Assembly.

The DA intended to fight a motion by the ANC to suspend Rule 253 of Parliament, which allowed the legislation to be rushed through Parliament during this current session. The National Assembly wrapped up its work this week so that MPs could start preparing for the May 7 elections.

The Amendment Bill would be referred to the National Council of Provinces for concurrence before being signed into law by President Jacob Zuma.