Nobody expected the introduction of SA's new mining legislation to be easy. But, with the end of the process now in sight, one can ask: surely government could have handled it far better ?
There was one shock after another, from the release of the revised draft legislation in April last year, to the parliamentary hearings in June, to the leaking of the draft mining charter in August, to the publication of the draft royalty bill in March.
Still to come is legislation covering beneficiation in the industry. This may have further implications for the precious metals and diamonds sector.
The damage done to SA's investment reputation overseas will take years to repair and some of it may be permanent.
Unlike the SA mining companies, foreign investors do not have to live with the SA legislation and can invest their money elsewhere.
The worst damage was done by the mining charter and the royalty bill. Nervous investors knocked R56,3bn off the market capitalisation of the principal SA mining stocks in the first two days of trading following publication of the details of the leaked charter.
The reason was that the charter proposed transfer of ownership of 51% of mining industry assets into the hands of historically disadvantaged South Africans within 10 years.
That raised the spectre of nationalisation and convinced many investors, as well as industry executives, that they were up against a government that was determined to make changes to the mining industry based on political ideology and with insufficient regard to practical, economic considerations.
Government protested at the time that this was no more than an opening bargaining position, but in vain, because of the radical nature of that position.
It took months of work, including overseas road shows to foreign investors, by the minister of minerals & energy, her deputy and senior civil servants to undo the damage.
But they did manage to recover much of the lost ground as subsequent negotiations produced a far more reasonable and acceptable charter.
The share prices of the various SA mining companies responded by regaining much of their lost ground.
Then came the "last straw", as Durban Roodepoort Deep chairman Mark Wellesley Wood describes it, in the form of the royalty bill published by the finance department.
It should have been released in finance minister Trevor Manuel's budget speech in February but he held it back, clearly because the explosion of negative reaction it created would have overwhelmed his otherwise "good news" budget for most South Africans.
The royalty bill proposes slapping a sliding scale of royalties on gross turnover of mining companies, ranging from 2% for coal mines to 8% for diamond mines.
It has been condemned across the board by mining companies and investors. Among them are the Foreign Investors Mining Association (Fima), which minerals & energy minister Phumzile Mlambo-Ngcuka has described as the "most reliable voice of reason" in the long-running debate over the new legislation.
Fima members are foreign mining companies with the most to gain through the opening up of the SA mining industry by the new legal dispensation.
