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[2015] ZASCA 82
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Minister of Mineral Resources and Others v Mawetse (SA) Mining Corporation (Pty) Ltd (20069/14) [2015] ZASCA 82; [2015] 3 All SA 408 (SCA); 2016 (1) SA 306 (SCA) (28 May 2015)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 20069/14
In
the matter between
MINISTER
OF MINERAL
RESOURCES
.........................................................
FIRST
APPELLANT
DIRECTOR-GENERAL,
DEPARTMENT OF
MINERAL
RESOURCES
...............................................................................
SECOND
APPELLANT
DEPUTY
DIRECTOR-GENERAL: MINERAL
DEVELOPMENT,
DEPARTMENT OF
MINERAL
RESOURCES
..................................................................................
THIRD APPELLANT
REGIONAL
MANAGER: LIMPOPO REGION,
DEPARTMENT
OF MINERAL
RESOURCES
............................................
FOURTH
APPELLANT
DILOKONG
CHROME MINE (PTY)
LTD
.....................................................
FIFTH APPELLANT
and
MAWETSE
(SA) MINING CORPORATION (PTY)
LTD
.........................................
RESPONDENT
Neutral
citation:
Minister of Mineral
Resources v Mawetse (SA) Mining Corporation (Pty) Ltd
(20069/14)
[2015] ZASCA 82
(28 May 2015)
Coram
:
Navsa ADP, Leach, Majiedt, Zondi JJA and Meyer AJA
Heard:
7 MAY 2015
Delivered:
28 MAY 2015
Summary:
Mining – prospecting right –
when granted in law – whether BEE compliance can be attached as
a condition of the
right – lapsing of the right due to expiry.
ORDER
On
appeal from:
Gauteng Division of the
High Court, Pretoria (Masipa J, sitting as court of first instance):
(1)
The appeal is dismissed with costs, including those of two counsel.
JUDGMENT
Majiedt
JA (Navsa ADP, Leach and Zondi JJA and Meyer AJA concurring):
Introduction
[1]
The issues in this matter are whether a prospecting right had been
lawfully granted to the fifth appellant, Dilokong Chrome
Mine (Pty)
Ltd (Dilokong), and, if so, whether Dilokong may lawfully exercise
that right. Allied to that is the question whether
that right had
lapsed due to its expiry or abandonment. These questions were decided
against Dilokong, and in favour of the respondent
(qua applicant),
Mawetse (SA) Mining Corporation (Pty) Ltd (Mawetse), in the Gauteng
Division of the High Court, Pretoria, by Masipa
J. Dilokong appeals
with the leave of the court a quo. The first to fourth appellants,
the Minister of Mineral Resources and senior
officials in that
Department, to whom I shall collectively refer as ‘the DMR’,
did not participate in this appeal although
they made common cause
with Dilokong in the court below and to that end filed a
comprehensive answering affidavit.
The
order in the Gauteng Division
[2]
The case was brought by Mawetse in the Gauteng Division as a review
application. Masipa J held that:
(a) Dilokong had
failed to comply with a suspensive condition attached to the grant of
the prospecting right and had accordingly
‘disabled’
itself from implementing that right, and
(b) even if there
had been a lawful award of a prospecting right to Dilokong, that
right had been ‘lost’ due to the
unreasonable delay in
exercising it and, as a result, the right has lapsed as it has
expired.
Masipa
J consequently issued a declaratory order that Dilokong did not hold
a valid prospecting right as it had lapsed and following
on that
conclusion that it no longer constituted a bar to the consideration
of Mawetse’s application for a prospecting right.
She set aside
the decision of the fourth appellant, the Regional Manager, Limpopo
Region, Department of Mineral Resources (the
Regional Manager)
rejecting Mawetse’s application for a prospecting right and
remitted that application to the third appellant,
the Deputy Director
General: Mineral Development, Department of Mineral Resources (the
DDG) for reconsideration within 30 days.
Lastly, Masipa J dismissed
Dilokong’s counter-application in which it sought to compel the
DMR to notarially execute the
prospecting right that had been awarded
to it.
Background
[3]
On 24 November 2006 Dilokong applied, in terms of s 16 of the Mineral
and Petroleum Resources Development Act 28 of 2002 (the
MPRDA), for a
prospecting right for chrome ore (base metals) in respect of the farm
Driekop 253 KT (Driekop). The application was
lodged at the office of
the Regional Manager who, in his letter of acceptance dated 6
December 2006, requested Dilokong to give
effect to the objects of s
2(
d
) of
the MPRDA by submitting, amongst others, a signed shareholder
agreement to the Regional Manager’s office by 4 February
2007.
That request was made purportedly under the provisions of s 17(4) of
the MPRDA, an aspect which will be discussed in due
course.
[4]
On 21 June 2007 the DDG granted a power of attorney, ostensibly under
s 103 of the MPRDA, to the Regional Manager to sign the
prospecting
right contemplated in s 17(1) in favour of Dilokong in respect of
Driekop. On that same day the DDG signed an approval
of a
recommendation to grant a prospecting right to
Dilokong
for
4 years subject to Dilokong, where applicable, submitting, before
notarial execution of the right, all other outstanding information
or
documentation, including a shareholder agreement with a Black
Economic Empowerment (BEE) entity holding not less than 26% of
the
equity in the operation.
[1]
The
DDG wrote to Dilokong on 18 July 2007 to confirm that it had been
granted a prospecting right in respect of Driekop. The DDG
purported
to exercise the Minister’s delegated powers in terms ofs 103(1)
and (2) of the MPRDA in respect of the grant and
refusal of
prospecting rights.
[5]
On 14 November 2007, the date on which the prospecting right was
about to be notarially executed (as it is a limited real right
in
terms of s 5(1) of the MPRDA), Dilokong’s representatives were
informed that this could not take place, due to Dilokong’s
failure to give effect to s 2(
d
) of the MPRDA in relation to
the required BEE shareholding. Section 2(
d
) reads as follows:
‘
2
Objects of Act
The objects of this
Act are to-
. . .
(d)
substantially and meaningfully expand
opportunities for historically disadvantaged persons, including
women, to enter the mineral
and petroleum industries and to benefit
from the exploitation of the nation’s mineral and petroleum
resources.’
Dilokong’s
attempts to comply with this requirement proved futile. Dilokong is a
wholly owned subsidiary of ASA Metals (Pty)
Ltd (ASA Metals) which is
in turn owned by East Asia Metal Investment Company Ltd and the
Limpopo Development Corporation (Limdev),
a Limpopo provincial
government enterprise. A national government moratorium on the
disposal of all mining related state assets
by all organs of state
prohibited Limdev from disposing of its shares in ASA Metals to a BEE
entity to meet the requirements imposed
upon Dilokong. The
environmental management plan submitted by Dilokong on 2 February
2007 in compliance with s 16(4)(
a
)
was never approved due to Dilokong’s failure to comply with the
s 2(
d
) BEE
compliance requirement.
[6]
In the meantime Mawetse, completely oblivious of the facts set out
above, applied in September 2009 for a prospecting right
for various
minerals (including chrome) in respect of various farms, including
Driekop. Its application in respect of Driekop was
rejected in terms
of s 16(2)(
b
)
of the MPRDA because that prospecting right had already been granted
to Dilokong.
[2]
Upon
investigation Mawetse discovered the facts set out above, in
particular that Dilokong’s prospecting right had not been
executed, that its duration was for three years (ie contrary to the
DDG’s approval which was for a period of four years,
an aspect
to which I will revert shortly) and that according to Mawetse’s
calculation it would have lapsed on 13 November
2010. Mawetse
challenged the award of the prospecting right to Dilokong in the
North Gauteng High Court, Pretoria on 20 January
2012. That challenge
was met with a preliminary point being taken by Dilokong, namely that
the application was premature since
Mawetse had not exhausted its
internal remedy, ie an internal appeal to the Minister in terms of s
96 of the MPRDA. Mawetse’s
internal appeal was lodged on 28
October 2010 while its challenge in the North Gauteng High Court was
held in abeyance by agreement.
The Minister refused to consider
Mawetse’s internal appeal because the matter was considered to
be ‘
sub
judice
’
due to Mawetse’s pending application in the high court. In July
2011, Mawetse, faced with this impasse, approached
the North Gauteng
High Court again for an order to compel the Minister to decide the
internal appeal and obtained such an order.
On 16 August 2011 the
Minister upheld the award of the prospecting right to Dilokong and
dismissed Mawetse’s appeal. On 20
January 2012 Mawetse launched
the review application culminating in the present appeal. Counsel for
Mawetse conceded in this court
that at the time of Mawetse’s
application to the DMR, the time period in respect of the prospecting
right (calculated as
a four year period) had not yet lapsed but had
lapsed at the time when Mawetse had launched its application in the
court below.
As stated earlier, Dilokong filed a counter-application
which sought to compel the DMR to cause the execution of the
prospecting
right.
[7]
It is against this factual backdrop that we must determine whether
Masipa J was correct in her findings. A useful starting point
is to
examine the provisions of the MPRDA in respect of prospecting rights.
The
statutory framework
[8]
The MPRDA has been substantially amended by the
Mineral and Petroleum
Resources Development Amendment Act 49 of 2008
. Those amendments do
not apply in this case, since they were promulgated subsequent to the
events material to the central issues
in this case. References to the
MPRDA are therefore to the Act in its pre-amendment form. The
statutory procedure in respect of
an application for a prospecting
right is set out comprehensively in
Bengwenyama
Minerals (Pty) Ltd v Genorah Resources (Pty) Ltd
.
[3]
Sections 16 and 17 of the MPRDA regulate the application for and the
granting and duration of prospecting rights. Section 16 sets
out the
mechanical bureaucratic procedure for the application. The Regional
Manager’s office plays a central role in this
process but it
fulfils a very limited, clearly circumscribed role. For present
purposes, the following provisions are of importance
–
Section 16(4)
provides:
‘
(4)
If the Regional Manager accepts the application, the Regional Manager
must, within 14 days from the date of acceptance, notify
the
applicant in writing –
(a)
To submit an environmental management plan.
. . .’
And s 16(5) reads:
‘
(5)
Upon receipt of the information referred to in subsection (4)(a) and
(b), the Regional Manager must forward the application
to the
Minister for consideration.’
[9]
Section 17 is of cardinal importance. It concerns the granting and
duration of prospecting rights. Section 17(1) reads as follows:
’
17
Granting and duration of prospecting right
(1)
Subject to subsection (4), the Minister
must grant a prospecting right if –
(a)
The applicant has access to financial
resources and has the technical ability to conduct the proposed
prospecting operation optimally
in accordance with the prospecting
work programme;
(b)
The estimated expenditure is compatible
with the proposed prospecting operation and duration of the
prospecting work programme;
(c)
The prospecting will not result in
unacceptable pollution, ecological degradation or damage to the
environment;
(d)
The applicant has the ability to comply
with the relevant provisions of the Mine Health and Safety Act, 1996
(Act 29 of 1996); and
(e)
The applicant is not in contravention of
any relevant provision of this Act.’
The key provision is
s 17(1)(e).
Section 17(4)
provides:
‘
(4)
The Minister may, having regard to the type of mineral concerned and
the extent of the proposed prospecting project, request
the applicant
to give effect to the object referred to in section 2(
d
).’
I
have set out the provisions of s 2(
d
) above.
For
present purposes ss 17(5) and (6) are significant
:
‘
(5)
The granting of a prospecting right in terms of subsection (1)
becomes effective on the date on which the environmental management
programme is approved in terms of section 39.
(6)
A prospecting right is subject
to this
Act, any other relevant law
and the
terms and conditions stipulated in the right and is valid for the
period specified in the right, which period may not exceed
five
years.’ (emphasis added)
[10]
Before turning to deal with the substantive issues outlined above, I
pause to mention that prior to the hearing the following
note was
sent to the parties by the Registrar of this court:
‘
The
parties are directed to address the following question as a matter of
urgency. Has the appeal not been rendered moot because
the period for
which the prospecting right was purportedly granted to the Fifth
Appellant [Dilokong] has passed?’
The
parties filed supplementary heads of argument on this aspect with
Mawetse answering the question in the affirmative and Dilokong
contending that the appeal has not been rendered moot. Since the
conclusion by Masipa J on whether the right has expired due to
the
necessary procedural steps not having been taken is contested, and
since Dilokong contended that the question of the expiry
of the
period for which the right was granted is dependent on when the time
starts to run (which also in dispute), it is necessary
to deal with
all these issues in the present appeal. These aspects are interwoven
and are furthermore to be considered against
the backdrop of the fact
that the period for which the right endured had, on Mawetse’s
concession, not lapsed when Mawetse
applied to the DMR, but had
lapsed when Mawetse launched its court application.
Was
the prospecting right lawfully granted and, if so, may Dilokong
exercise that right?
[11]
The primary dispute is whether Dilokong could lawfully have been
required to be BEE compliant. Section 17(1), read with s 17(4),
bears
consideration. Dilokong contended that, once the requirements in s
17(1) had been met, the Minister was legally obliged to
grant the
right. According to Dilokong compliance with the BEE requirements in
s 2(
d
) is not a precondition for the granting of a prospecting
right, as opposed to a mining right, and it could not be lawfully
imposed.
These submissions are untenable on the law and on the facts.
In the DDG’s approval of the recommendation by the Regional
Manager that Dilokong be granted the prospecting right in respect of
Driekop, it was expressly recorded as follows:
‘
5
Assessment of Charter Compliance
5.1 Compliance
with section 17(4)
The Shareholders
Agreement and/or Share Certificates were not submitted.
6 Recommendation
6.1 In light of the
fact that the applicant has complied with all the requirements of
section 17(1) of the Act, as indicated in
paragraph 4 above, it is
recommended that you, please, consider to –
6.1.1 grant a
prospecting right to Dilokong Chrome Mine in accordance with section
17(1) of the Act for a period of four (4) years,
subject to –
(i)
the applicant, where applicable, submitting (before execution) all
other outstanding information and or documentation
(including
Shareholders Agreement with BEE entity not (sic) holding not less
than 26% of equity in the operation
and
financial guarantee in the amount of R15 000.00); and
6.1.2
. . . .’ (my emphasis)
[12]
The DDG approved the recommendation in the terms set out in 6.1.1
above and affixed his signature to that effect. Thus the
recommendation and its rationale became his decision. He also signed
a power of attorney authorising the Regional Manager to sign
the
prospecting right in favour of Dilokong in respect of Driekop
‘according to the approval signed by me [the DDG] today’.
That decision of 21 June 2007 was conveyed to Dilokong by letter
dated 18 July 2007. It was envisaged in the letter that the Regional
Manager would approve the environmental management plan on the date
of the signing of the right, ie the date of its notarial execution.
As stated, this never happened since Dilokong was regarded as being
non-BEE compliant. The DDG had thus plainly and unequivocally
attached BEE compliance as a condition in granting the right.
Moreover, the unsigned draft notarial deed in terms whereof the
prospecting right was to be executed, envisaged in clause 16 that
Dilokong had to be BEE compliant. It is necessary to record that
in
the affidavit filed on behalf of the DMR the BEE condition was
accepted as having been communicated.
[13]
Dilokong contended that no request had in fact been made in terms of
s 17(4) as far as s 2(
d
) BEE compliance was concerned and, if
it could be said to have been made, it was never a condition as
contemplated by the Act.
Furthermore, so it was submitted, it was in
any event not conveyed to Dilokong in the DDG’s letter of 18
July 2007. Counsel
emphasized that
s 17(4) speaks of a ‘request’
not a ‘requirement’ or a ‘condition’. He
juxtaposed s 17(4) with
s 23(1)(
h
) where, in respect to mining
rights as opposed to prospecting rights, BEE compliance is a
prerequisite:
’
23
Granting and duration of mining right
(1)
Subject to subsection 4, the Minister must
grant a mining right if –
(h)
the granting of such right will further the
objects referred to in section 2(
d
)
and (
f
)
and in accordance with the charter contemplated in section 100 and
the prescribed social and labour plan.’
[14]
A submission was made in the written heads of argument on behalf of
Dilokong that an applicant for a prospecting right could
not in law
be compelled to be BEE compliant and that the Mining Charter does not
apply to prospecting rights. The submission is
devoid of merit.
Section 100(2)(
a
) of the MPRDA provides for the development of
the Mining Charter in order to ‘ensure the attainment of
Government’s
objectives of redressing historical, social and
economic inequalities as stated in the Constitution.’ The
charter must ‘set
the framework for targets and timetable for
effecting the entry of historically disadvantaged South Africans into
the mining industry,
and allow such South Africans to benefit from
the exploitation of mining and mineral resources’. It must also
set out, amongst
others, how the objects referred to in s 2(
d
)
above can be achieved. Section 1 of the MPRDA expressly
includes prospecting in the definition of ‘broad-based
economic
empowerment’:
‘
.
. . [a] social or economic strategy, plan, principle, approach or act
which is aimed at –
. . .
(b) transforming
such industries so as to assist in, provide for, initiate or
facilitate –
(i)
the ownership, participation in or the
benefiting from existing or future mining, prospecting, exploration
or production operations;
. . .’
Paragraph
2 of the charter repeats this definition verbatim and thus expressly
includes prospecting.
[15]
Section 17(4) unequivocally empowers the Minister to make the grant
of a prospecting right conditional upon compliance with
the s 2(
d
)
BEE requirement as occurred in this case. In this regard Dilokong’s
approach on the papers is instructive. The DMR’s
answering
affidavit was deposed to by Ms Motlatso Constance Kobe, the Chief
Director: Mineral Regulation Branch in the Minister’s
office.
She commences her affidavit by setting out the process in the issuing
of a prospecting right and states that:
‘
3.5
It is apparent from paragraph 3 to “PMW3” that the Fifth
Respondent was called upon to comply with the object of
Section 2(d)
of the Act by submitting not later than the 4
th
February 2007 the following documents:-
(3.5.1) duly signed
shareholders agreement;
(3.5.2) share
certificates and shareholders register;
(3.5.3) articles and
memorandum of association of the company;
(3.5.5) any other
agreement or documents relating to the agreement.’
In
Dilokong’s answering affidavit the deponent expressly concurs
with, amongst others, paragraph 3.5 above of Ms Kobe’s
affidavit. It is clear that all concerned, and Dilokong in
particular, had treated the grant as one requiring, amongst others,
compliance with the s 2(d) BEE requirement. And Dilokong was required
to demonstrate its compliance by submitting a shareholder
agreement
evidencing the required 26% BEE entity shareholding. The papers also
show, and Dilokong says so unequivocally in its
answering affidavit,
that it had made attempts to meet this requirement, to no avail, due
to the impact of the moratorium placed
by government on Limdev’s
disposal of its shareholding in ASA Metals. It is clear that before
this litigation commenced,
the DMR accepted this to be the position.
On the evidence therefore the Minister, as she was in law entitled to
do, issued a request
through her lawful delegate, the DDG, to
Dilokong to give effect to the object of black economic empowerment
in s 2(d). The Minister
(or her delegate) is expressly empowered to
make the request since the section provides that she ‘may
request’.
[4]
The emphasis
during argument by Dilokong on the use of the word ‘request’
in s 17(4) is misplaced. ‘To request’
means ‘to
politely or formally ask (someone) to do something’.
[5]
It is not contrary to a demand or a requirement, as it was contended.
And it hardly lies in Dilokong’s mouth to argue along
these
lines when it had not only concurred with the DMR that such a request
had been made, but had also on the common cause facts
actively set
out to heed this request, albeit without any success. In this context
a request is a necessary preliminary step in
ensuring compliance with
the MPRDA’s BEE imperative.
[16]
The affirmative action provisions in the MPRDA must be understood for
what they are – a focused intervention to redress
past
inequalities in the mining industry. The Constitutional Court has
emphasized that its objects are to address in a direct and
forthright
manner the historical exclusion of black South Africans and to
facilitate equitable access to opportunities in the mining
industry.
One of the ways of achieving this in the MPRDA is to abolish the
entitlement to sterilise mineral rights.
[6]
And in
Bengwenyama
that
court said:
‘
There
is no denying that past mining legislation and the general history of
racial discrimination in this country prevented black
people from
acquiring access to mineral resources. Dispossession of land
aggravated the situation. The Act [ie the MPRDA] seeks
to redress
these past wrongs’.
[7]
(footnotes omitted)
[17]
In summary on this first issue: the Minister’s delegate, the
DDG, had lawfully requested Dilokong to comply with the
s 2(
d
)
BEE requirement. Dilokong acknowledged the request and had sought to
comply with it, without any success. The objects set out
in s 2(
d
)
are of cardinal importance when the purpose of the MPRDA and the
Mining Charter is borne in mind and, as our courts have stressed,
are
essential to redress the historical inequalities in the mining
industry. Compliance with the request is not merely optional
and the
grant of the prospecting right was expressly made subject to such
compliance. Absent compliance, the DMR was lawfully entitled
to
refuse to execute the right. Dilokong was non-compliant with s 17(4),
read with s 2(
d
)
of the MPRDA. The right was conditionally granted in terms of s
17(2)(
a
),
read with s 17(1), namely on condition that Dilokong complies with
the request. Section 17(6) makes a prospecting right subject
to the
MPRDA, any other applicable law and the terms and conditions
stipulated in the right. As demonstrated above, compliance
with s
2(
d
) was
unequivocally imposed as a condition of the grant in the DDG’s
approval of the recommendation. On the common cause facts
Dilokong
had accepted that such a request had been made as a condition of the
grant and had unsuccessfully sought to comply with
it. The unsigned
draft notarial deed is consonant with this factual and legal matrix
inasmuch as it also envisaged BEE compliance
on Dilokong’s
part. In the premises, the court below correctly concluded that the
Dilokong’s failure to meet this condition
had the effect of
barring Dilokong from implementing its right to prospect.
Has
the right lapsed?
[18]
Any right issued in terms of the MPRDA lapses, amongst others,
whenever it expires (s 56(
a
))
or is abandoned (s 56(
f
)).
Expiry of the right would occur upon the effluxion of the time period
for which the right has been granted. That determination
requires a
consideration of when exactly the right was granted. I interpose to
reiterate that the unsigned draft notarial deed
in terms whereof the
right was to be executed is at variance with the DDG’s approval
insofar as the duration of the right
is concerned. The draft deed
stipulated a period of three years, whereas the DDG’s approval
was for four years. As I will
presently demonstrate, the discrepancy
is immaterial, since the right would have lapsed even taking into
account the longer period
of four years.
[19]
There are three distinct legal processes which must be distinguished
from each other, namely the granting of, execution of,
and coming
into effect of the right. A prospecting right is granted in terms of
s 17(1) on the date that the DDG approves the recommendation
(a
contrary finding was made in two Northern Cape High Court decisions
to which I shall in due course refer). In the present instance
that
occurred on 21 June 2007. For practical purposes communication of
that decision will enable challenges by the grantee to conditions
which it might consider objectionable and furthermore will alert not
only the grantee but also competitors who might have an interest.
The
period for which the right endures has to be computed from the time
that an applicant is informed of the grant, in this instance
18 July
2007. From the date of the grant Dilokong became the holder of a
valid prospecting right as defined in the MPRDA. But in
terms of s
19(2)(
a
)
of the MPRDA that right had to be registered in the Minerals and
Petroleum Titles Office.
[8]
That
Office has been established in terms of s 2(1) of the Mining Titles
Registration Act 16 of 1967 (the MTR Act). While s 5(1)
of the MPRDA
provides that a prospecting right is a limited real right in respect
of the mineral to which it relates, s 2(4) of
the MTR Act provides
that ‘[t]he registration of a right in terms of this Act in the
Mineral and Petroleum Titles Registration
Office shall constitute a
limited real right binding on third parties’. These provisions
appear at face value to be contradictory
with regard to the nature of
the right and its legal consequences. But that is not an aspect which
need concern us now –
for present purposes I accept that the
right becomes a limited real right only upon registration. The
purpose and effect of registration
is not only that the right becomes
binding on third parties, but it also serves as notice to the general
public, akin to registration
of immovable property in the Deeds
Office. The granting of a prospecting right becomes effective on the
date on which the environmental
management plan lodged by the
applicant in terms of s 16(4)(
a
)
is approved in terms of s 39.
[9]
That is the date from which a successful applicant can actively start
prospecting.
[20]
The gravamen of Dilokong’s contentions is that the period of
four years in the DDG’s approval had not started running
since
the prospecting right has never become effective and had not been
executed. This is an untenable proposition. If correct,
it would mean
that the right is sterilised indefinitely in favour of Dilokong. No
applications for that right, ie for chrome (base
metals) in respect
of the farm Driekop could then be considered while the right remains
sterilised.
[10]
An
indeterminate reservation of the right in this fashion is contrary to
the letter and spirit of the MPRDA. Section 17(6) expressly
provides
that a prospecting right remains valid for a maximum period of five
years. Such an interpretation offends one of the MPRDA’s
key
objectives, namely that mineral rights must be exploited within
stipulated timeframes for the benefit of the public. In
Agri
SA
it was held that one of the objects of the MPRDA is to abolish the
entitlement to sterilise mineral rights.
[11]
The structure of the MPRDA in any event militates against Dilokong’s
contentions. Section 19(2)(
b
)
provides that the holder of a prospecting right ‘must commence
with prospecting activities within 120 days from the date
on which
the prospecting right becomes effective in terms of section 17(5) or
such an extended period as the Minister may authorise’.
As
stated, s 17(5) stipulates that the effective date is the date on
which the environmental management plan is approved in terms
of s 39.
That plan must be submitted to the Regional Manager within a period
of 60 days of notification to do so.
[12]
The Minister must within 120 days from the lodgement approve the
same, provided certain requirements have been met.
[13]
It is plain from these provisions that a successful applicant for a
prospecting right cannot sit back, with arms folded, and remain
supine on the basis that the DDG has unlawfully imposed the BEE
compliance condition and that the Regional Manager’s refusal
to
execute the right by reason of that non-compliance was also unlawful.
Those decisions remained valid until set aside by a court.
[14]
The appropriate course of action was for Dilokong to obtain a
mandamus compelling DMR to execute the right, that is assuming that
the right was lawfully granted.
[21]
The period for which Dilokong’s prospecting right endured must
in my view be calculated from the date on which it was
informed of
the granting of the right, namely 18 July 2007. On that date Dilokong
became the holder of a valid prospecting right,
subject to compliance
with the request to prove BEE compliance. It matters not, for
purposes of computing the period of the duration
of the right, that
the right still had to be executed and that the right had not yet
become effective. Thus construed, Dilokong’s
prospecting right
had expired due to the effluxion of time on 17 July 2011, ie 4 years
after the date on which Dilokong had been
notified of the granting of
the right. The high court thus correctly concluded that the right had
lapsed due to its expiry. It
found further that the right had been
lost because of Dilokong’s unreasonable delay in using it. In
view of these findings
the high court did not deem it necessary to
determine whether the right had been abandoned. While it is not
necessary to decide
the point, there is substantial merit in the
contentions advanced on behalf of Mawetse that the right had in any
event been abandoned
due to Dilokong’s failure to take steps to
enforce its right. It follows that the appeal has been rendered moot.
[22]
There is one last aspect which bears consideration in respect of this
second main issue. It was contended by Dilokong that
we have to
decide the correctness of the decision of the Full Bench of the
Northern Cape Provincial Division in
Meepo
v Kotze.
[15]
Mawetse accepted that
Meepo
may have been wrongly decided but contended that we need not make a
finding on that aspect. For the reasons that follow, I am of
the view
that the decision in
Meepo
has
a direct bearing on the issue under discussion and that
Meepo
was
wrongly decided.
[23]
The main issue in
Meepo
, germane to the present matter, was
the validity of a prospecting right. In order to decide the issue the
court there had to determine
when exactly and as a result of whose
administrative conduct the prospecting right had been granted. It
held that:
(a)
No rights accrued to an applicant for a prospecting right at the time
of an approval by the DDG of a recommendation before any
terms or
conditions in respect of the prospecting right, as well as the period
of its validity, had been determined.
[16]
(b)
On the facts of that case the rights and conditions and the period of
validity were only determined and communicated to the
applicant at
the time when the notarial deed in respect of the prospecting right
was executed.
[17]
(c)
The legal nature of the granting of a prospecting right is
contractual, inasmuch as the Minister, as the representative of the
State as custodian of the mineral resources of the country,
consensually agrees to grant to an applicant a limited real right to
prospect for a specified mineral on specified land for a specific
period under specific conditions. Until such terms and conditions
have been determined and consensually agreed upon or consented to by
an applicant, it cannot be said that a prospecting right has
been
granted to an applicant. The right can only be granted once the terms
and conditions had been determined and communicated
to an applicant
for his acceptance. That occurs when the notarial deed is
executed.
[18]
The
Full Bench cited this court’s judgment in
Ondombo
Beleggings (Edms) Bpk v Minister of Mineral and Energy Affairs
[19]
in support of the finding in (c) above.
Meepo
was followed in
Doe
Run Exploration SA (Pty) Ltd v Minister of Minerals and Energy
[20]
.
[24]
It should be evident from what has gone before that I respectfully
disagree with these findings. As I see it, the granting
of a
prospecting right, as is the case with all other rights under the
MPRDA, is not contractual in nature, but a unilateral administrative
act by the Minister or her delegate in terms of their statutory
powers under the MPRDA. It occurs outside the ambit of and regardless
of the existence of a contract between the Minister and a successful
applicant. Professor Baxter refers to such an act as an authoritative
or unilateral administrative act which is performed without the
concurrence of the affected party.
[21]
In the high court’s decision in
Bengwenyama
[22]
,
the Transvaal Provincial Divison had to consider, amongst others,
this very question, namely who granted the prospecting right
in
question. Hartzenberg J held that the DDG, as the Minister’s
delegate, granted the right and that the Regional Manager,
in
subsequently signing the notarial deed of execution, merely acted on
the authority of the power of attorney signed by the DDG
in favour of
the Regional Manager.
[23]
Similarly in
Norgold
Investments (Pty) Ltd v Minister of Minerals and Energy of the
Republic of South Africa
[24]
which concerned the lodging of an application for the conversion of
prospecting rights at a particular Regional Office of the DMR,
this
court also held that it is the DDG, and not the Regional Manager, who
makes the decision regarding the conversion of a prospecting
right. A
submission was made in that case that since the Regional Manager had
signed the notarial prospecting right, he should
be regarded as the
person who granted the conversion of an old order right to one in
item 6 of Schedule 2 of the MPRDA, and not
the DDG. In rejecting that
submission, Navsa JA stated that:
‘
The
sixth respondent [the DDG] took the decision to convert and left it
to the Regional Manager Mpumalanga to implement. . .’
[25]
In
Mustapha
v Receiver of Revenue Lichtenburg and others
[26]
Schreiner JA described the nature of a unilateral administrative act
as follows:
‘
In
exercising the power to grant or renew, or to refuse to grant or
renew, the permit, the Minister acts as a state official and
not as a
private owner, who need listen to no representations and is entitled
to act as arbitrarily as he pleases. . . .’
[25]
In England statutory licenses are regarded as ‘public law
instruments’. In
Norweb
plc v Dixon
[27]
the Queen’s Bench had to consider whether the supply of public
electricity by a supplier, who is under a statutory duty to
do so, to
a tariff customer was based on a contractual relationship between the
parties. The court (Dyson J, McCowan LJ concurring)
held that ‘the
legal compulsion both as to the creation of the relationship and the
fixing of its terms is inconsistent with
the existence of a
contract’
[28]
Similar
conclusions were reached in
Sovmots
Investments Ltd v Secretary of State for the Environment
[29]
and
Pfizer
Corporation v Ministry of Health
.
[30]
[26]
The granting of a prospecting right does not admit of a legal
relationship where consensus between the parties is a legal
requirement. I disagree with the dictum in
Meepo
[31]
that an applicant for a prospecting right has to reach consensus with
the Minister or has to consent to the terms and conditions
of the
right. The MPRDA sets out in no uncertain terms the respective
parties’ rights and obligations. It is plainly an
authoritative, unilateral administrative act whereby rights are
granted with or without conditions and in terms whereof rights accrue
to and obligations are imposed upon the successful applicant.
[27]
Ondombo Beleggings
does not support the findings of the Full
Bench set out in para 23(c) above. It is distinguishable. That case
concerned the validity
of a prospecting lease in terms of s 4(1)(
b
)
of the (now repealed) Precious Stones Act 73 of 1964. The Minister
had refused to determine the terms and conditions of the lease
in
terms of s 4(2) of the Act, despite the fact that the lease had been
granted. Eksteen JA described the nature of such a prospecting
lease
as follows:
‘
The
very wording of s 4 of the [Precious Stones] Act underlines the
contractual and therefore consensual nature of the lease. The
Minister in effect binds himself to let the leaseholder prospect on
the land concerned for an agreed period of time, and the leaseholder
in turn agrees to pay a certain amount as rent. . . The fact that the
Act expressly requires certain matters to be dealt with in
the lease,
and in some instances gives the Minister an overriding say in
determining certain terms, does not in my view, detract
from the
contractual nature of the lease.
’
[32]
That
case must be understood on its own facts and the applicable law.
Section 17 of the MPRDA differs
toto caelo
from s 4 of the
Precious Stones Act. As set out above, a prospecting right must be
granted once there has been compliance with
s 17(1) – it is not
dependent on the determination and conclusion of an agreement between
the Minister and an applicant on
the prospecting right’s terms
and conditions. Section 4 of the Precious Stones Act reads as
follows:
‘
4.
Prospecting leases in respect of State land
(1)
The Minister may –
(a)
by notice in the
Gazette
and in one or more newspapers circulating in the area in which any
State land or portion of State land in respect of which the
exclusive
right of prospecting for precious stones has not accrued to any
person is situated, call for tenders for a prospecting
lease in
respect of precious stones over that land or that portion of such
land, and grant a prospecting lease to any person who
has submitted a
tender and who satisfies the Minister that the scheme according to
which he proposes to prospect is satisfactory
and either that his
financial resources are adequate for proper prospecting under such a
lease or that the arrangements by which
he proposes to obtain capital
for the said purpose are satisfactory; or
(b)
without calling for such tenders grant
a prospecting lease in respect of precious stones over any such land
or portion thereof to
any person applying therefor who to satisfies
him.
(2)
Any such lease shall be subject to such
terms and conditions as the Minister may deem fit, and –
(a)
shall provide for –
(i)
the scale on which and the manner in which prospecting operations
shall be carried on;
(ii)
the furnishing by the holder of the lease to the Minister at such
times as may be specified in the lease of full statements
describing
the nature of the prospecting operations carried out and containing
such other information as the Minister may require;
(iii)
the keeping by the holder of the lease of such records relating to
the prospecting operation as the Minister may require;
(iv)
the examination of such records and the inspection of the lease area
by any person authorised thereto by the Minister;
(v)
the payment by the holder of the lease to any person entitled to use
the surface of the land, who suffer any surface damage
or any damage
to crops or improvements on the land caused by the exercise by the
holder of the lease of his rights under the lease
or by any act or
omission incidental thereto, of compensation for such damage; and
(vi)
the payment by the holder of the lease to the mining commissioner of
a rent to be fixed by the Minister after consultation
with the board,
. . .
(b)
may provide
inter
alia
for the payment by the holder of
the lease to the mining commissioner of such share of the proceeds of
any precious stones found
by him in the course of prospecting
operations on the land in question, as the Minister may after
consultation with the board determine.’
As
can be seen, once the Minister had granted a lease in terms of s
4(1), the terms and conditions thereof had to be determined
in terms
of s 4(2). Section 17 of the MPRDA constitutes, as I have said, an
administrative act. The provision in s 17(6) that a
prospecting right
is ‘subject to the terms and conditions stipulated in the
right’ does not, without more, change that
administrative act
into one that is contractual in nature. The effect thereof is simply
that, in accordance with the principle
of legality, the Minister may
only act within the parameters conferred upon her by the legislative
provision. The distinction between
s 4 of the Precious Stones Act and
S 17 of the MPRDA is stark. For these reasons
Ondombo
Beleggings
does not support the
findings in
Meepo.
Conclusion
[28]
The high court was correct in its finding that Dilokong had failed to
comply with a condition of the grant, namely BEE compliance,
and that
the right had lapsed due to its expiry. The period of the duration of
the right must be computed from the date on which
Dilokong had
received confirmation of the grant. The decision in
Meepo
that the right is granted only at the stage of the registration of
the right is wrong. It follows that the appeal must fail.
[29]
The appeal is dismissed with costs, including those of two counsel.
________________________
S
A Majiedt
Judge
of Appeal
APPEARANCES
For Fifth Appellant:
C D A Loxton SC (with him M B L Makola)
Instructed
by: Edward Nathan Sonnenbergs Inc, Johannesburg
Webbers,
Bloemfontein
For Respondent: G
Marcus SC (with him N Ferreira)
Instructed
by: Maponya Inc, Pretoria
Symington
& De Kok, Bloemfontein
[1]
In
accordance with the then applicable Broad-Based Socio-Economic
Empowerment Charter for the South African Mining and Minerals
Industry, GN 838, GG 33573, 20 September 2010 (the Mining Charter),
developed in terms of s 100(2)(a) of the MPRDA.
[2]
Section
16(2)(b) of the MPRDA provides as follows:
‘
(2)
The Regional Manager must accept an application for a prospecting
right if –
(b)
no other person holds a prospecting right,
mining right, mining permit or retention permit for the same mineral
and land’.
[3]
Bengwenyama
Minerals (Pty) Ltd & others v Genorah Resources (Pty) Ltd &
others
2011
(4) SA 113
;
[2010] ZACC 26
(CC) paras 32 – 38.
[4]
Compare:
Paper,
Printing, Wood and Allied Workers’ Union v Pienaar NO &
others
[1993] ZASCA 98
;
1993 (4) SA 621
(A) at 640 A.
[5]
The
Concise Oxford English Dictionary
,
12 ed, (2011).
[6]
Agri
SA v Minister for Minerals and Energy
2013
(4) SA 1
;
[2013] ZACC 9
(CC) paras 1–3.
[7]
Bengwenyama
Minerals (Pty) Ltd & others v Genorah Resources (Pty) Ltd &
others,
supra,
para 28. See also:
Minister
of Mineral Resources & others v Sishen Iron Ore Co (Pty) Ltd &
another
2014
(2) SA 603
;
[2013] ZACC 45
(CC) paras 3-10.
[8]
Section
19(2)(
a
)
reads:
‘
(2)
The holder of a prospecting right must –
(a)
lodge such right for registration at the
Mineral and Petroleum Titles Registration Office within 60 days
after the right has become
effective.’
[9]
Section
17(5) of the MPRDA.
[10]
Section
16(2)(
b
).
[11]
See
fn 6 above.
[12]
Section
39(2) of the MPRDA, read with
Regulation 52(1)
of the
Mineral and
Petroleum Resources Development Regulations GNR
527, GG 26275, 23
April 2004
.
[13]
Section
39(4)(
a
)
.
[14]
Oudekraal
Estates (Pty) Ltd v City of Cape Town & others
2004
(6) SA 222
,
[2004] ZASCA 48
(SCA) para 26;
MEC
for Health, Eastern Cape & another v Kirland Investments (Pty)
Ltd t/a Eye and Laser Institute
(CCT 77/13)
[2014] ZACC 6
;
2014 (5) BCLR 547
(CC);
2014 (3) SA 481
(CC) paras 64, 65 and 88.
[15]
Meepo
v Kotze
(869/2006)
[2007] ZANCHC; 2008
(1) SA 104 (NC).
[16]
Meepo
v Kotze,
supra
at para 46.3.
[17]
Ibid.
[18]
Ibid.
[19]
Ondombo
Beleggings (Edms) Bpk v Minister of Mineral and Energy Affiars
[1991] ZASCA 108
;
1991
(4) SA
718
(A) at 724-725.
[20]
Doe
Run Exploration SA (Pty) Ltd v Minister of Minerals and Energy
& others [2008] ZANCHC 3.
[21]
L
Baxter,
Administrative
Law
1984 at 351.
[22]
Bengwemnyama
Minerals (Pty) Ltd & others v Genorah Resources (Pty) Ltd
formerly Tropical Paradise 427 (Pty) Ltd & others
[2008]
ZAGPHC 384.
[23]
Paras
19-25.
[24]
Norgold
Investments (Pty) Ltd v Minister of Minerals and Energy of the
Republic of South Africa and others
[2011]
ZASCA 49.
[25]
At
para 59. See further the discussion in Dale et al,
South
African Mineral and Petroleum
,
Law (Service issue 12, September 2012) para 133.2.3.
[26]
Mustapha
& another v Receiver of Revenue Lichtenburg & others
1958
(3) SA 343
(A) at 347 E-F.
[27]
Norweb
plc v Dixon
[1995]
3 All ER 952.
[28]
At
959.
[29]
Sovmots
Investments Ltd v Secretary of State for the Environment
[1976]
1 ALL ER 178
at 201.
[30]
Pfizer
Corporation v Ministry of Health
[1965]
1 All ER 450
at 455.
[31]
Meepo
v Kotze,
supra
para 46.3.
[32]
Ondombo
Beleggings v Minister of Mineral and Energy Affairs (Edms) Bpk,
supra,
at
724D-G.