Finally it looks like foreign miners will be allowed to stay in South Africa. But at what cost?
There's been much excitement this week about the upcoming megadeal between Glencore and Xstrata, two commodities giants. But there's been a far more subdued response to another good news for the mining world: South Africa, in the end, is not keen on nationalising its mines.
Not that it isn't big news. Pressured by Julius Malema and its vociferous Youth League, the ruling ANC had been forced to commission a report on the issue. And it was not obvious what the report would conclude: resource nationalism has been around for years, and Mr Malema, banking on popular angst about a broader sense of inequality and lack of empowerment, had found echoes for his views in the wider, disgruntled society. So the rejection of nationalisation policies by the mining commission (which President Zuma later endorsed in a televised debate) should have created a sense of relief among foreign investors.
It hasn't. Nationalisation may not be an option anymore, but the state is now looking at other ways to capture a larger share of mining profits: the report suggests a 50% windfall tax on 'super-profits', and a 50% capital-gains tax on the sale of prospecting rights. There is also talk of greater state intervention in the mining sector, to ensure local companies have easier access to minerals and local industries benefit more from the mineral riches. So whatever the form it takes, there will be a move towards greater resource nationalism - and foreign miners are set to pick-up the tab.
Yet it is right for South Africa to seek a greater share of the mining rent. The country is home to the greatest mineral wealth in the world, but is still plagued by widespread poverty and gapping inequalities. It should derive more wealth from the resources discovered in its soil. And short of nationalization, the mechanism suggested sounds sensible: super-profit taxes are better than fees purely based on overall production volume, because they allow for more marginal mines to become profitable.
But South Africa should dispel any doubts remaining over what the policy will ultimately involve. Uncertainty has weighted on the sector's performance for more than a year, with foreign companies delaying their investments in the country. At a time when commodity prices are buoyed by emerging market demand, South Africa has underperformed almost all its peers and slipped in the ranks of competitiveness in 2011. The government should be clear and quick in saying what it intends to do.
Then it should explain how it plans to spend the new cash - and do so wisely. A sizable part of the rent should be used to build the country's infrastructure, a major bottleneck constraining economic growth. Other long-term projects, in health or education, should also be part of the road map. And South Africa should consider setting up a long-term investment fund - like its rival for African leadership, Nigeria, is currently working on - to save money for when the going gets tough.
Whatever the plan, the bill will be a hefty one for miners. But provided South Africa manages to restrain its most populist instincts, in the long run they should also benefit. A sounder business climate, better infrastructures, and a healthier society will help secure the future of current mining ventures and allow profitable new ones to be sealed - whilst casting foreign compagnies not just as shareholders in mining projects, but as stakeholders in the country's long-term development.