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The Minerals and Petroleum Resources Royalty Act (MPRRA) became effective on 1 March 2010. This legislation may have a significant impact on employment, foreign investment and future exploration in the South African mining industry. This article reports on a critical analysis of the MPRRA prior to its implementation in order to identify aspects that may impact adversely on the South African mining industry and would require further research after the implementation of the MPRRA. Based on the findings, the authors recommend that the impact of the level of royalties levied as well as the mechanism to promote downstream beneficiation be researched to establish whether the legislators ought to reconsider these provisions in the light of their impact on the mining industry.