A controversial bill which will transfer ownership of all South Africa's mineral rights from private companies to the state has been passed by parliament's lower house.

The governing ANC party and labour organisations say the new legislation would ensure that the black majority in South Africa participates in the mining industry, which has been dominated by whites since the apartheid era.

Gold accounts for 10% of South Africa's exports

However, the mining companies argue that the bill violates property rights and will undermine the confidence of international investors in the South African economy.

The BBC's Barnaby Phillips, in Johannesburg, says the government has acknowledged the concerns of the companies and may propose last-minute amendments.

The bill still has to be approved by parliament's upper house, and the Constitutional Court could also examine it before President Thabo Mbeki signs it into law.

South Africa is the world's biggest gold producer. Gold and platinum account for about 20% of the country's exports and the mining industry employs about 500,000 people.

Government confident

With its comfortable majority in parliament, the ANC government was confident that the Minerals and Petroleum Resources Development Bill would be passed.

It says the fears of the mining companies are exaggerated and that its proposal to award mineral rights for 30-year periods is generous by international standards.

Applicants for the new leases must submit labour plans and show that they have black-owned partners.

Diamond company De Beers has said that it could cancel projects worth 8bn rand ($775m) if the bill is passed.

South Africa's mines

Mining dominate economy Rights transferred to state 30-year leases awarded Companies must include black partners Mining companies warn of 'nationalisation'

But the Minerals and Energy Minister, Phumzile Mlambo-Ngcuka, told the BBC the bill "will help attract more investment to South Africa because it will create more opportunities on a more level playing field".

Black business groups and trade unions have welcomed the bill.

They say it will end an era of racist exploitation in mining.

In a further indication of the bill's sensitivity, Ms Mlambo-Ngcuka says she will advise President Mbeki to ask the Constitutional Court for a ruling on its validity.

Living conditions

The Congress of South African Trade Unions (Cosatu) says the new law should greatly improve living conditions for mine workers.

"If this is properly enforced and policed, it will put an end to the very bad conditions in which workers have lived in the past," Patrick Craven, Cosatu spokesman told the BBC's Focus on Africa programme.

Correspondents say that mining was the bedrock of the apartheid economy.

Oppressive measures such as passes and hostels for migrant male workers were first introduced in the mines before spreading elsewhere, reports the South African Press Agency, Sapa.