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[2013] ZASCA 50
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Minister of Mineral Resources of the Republic of South Africa and Others v Sishen Iron Ore Company (pty) Ltd and Another (394/12) [2013] ZASCA 50; 2013 (4) SA 461 (SCA); [2013] 3 All SA 270 (SCA) (28 March 2013)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 394/12
In the matter between:
MINISTER OF MINERAL
RESOURCES
OF THE REPUBLIC OF
SOUTH AFRICA
........................................
FIRST
APPELLANT
DIRECTOR-GENERAL OF
THE DEPARTMENT
OF MINERAL RESOURCES
.......................................................
SECOND
APPELLANT
DEPUTY
DIRECTOR-GENERAL: MINERAL REGULATION,
DEPARTMENT OF MINERAL
RESOURCES
..................................
THIRD
APPELLANT
REGIONAL MANAGER,
NORTHERN CAPE REGION,
DEPARTMENT OF MINERAL
RESOURCES
..............................
FOURTH
APPELLANT
IMPERIAL CROWN TRADING
289 (PTY) LIMITED
........................
FIFTH
APPELLANT
and
SISHEN IRON ORE
COMPANY (PTY) LIMITED
..........................
FIRST
RESPONDENT ARCELORMITTAL SOUTH AFRICA LIMITED
.......................
SECOND RESPONDENT
Neutral citation
:
Minister of Mineral Resources of the RSA v Sishen Iron Ore
(394/12)
[2013] ZASCA 50
(28 March 2013)
Coram:
BRAND,
LEWIS, CACHALIA JJA, SOUTHWOOD AND SWAIN AJJA
Heard:
19 February
2013
Delivered:
28
March 2013
Updated:
Summary:
Effect of failure of one co-holder of an ‘old order mining
right’ to convert that right in accordance with
Item 7 of
Schedule II to the Mineral and Petroleum Resources Development Act 28
of 2002 (MPRDA) is that on the expiry of the prescribed
five year
period that co-holder’s undivided share in the ‘old order
mining right’ ceases to exist as provided
by Item 7 (8) of
Schedule II and the co-holder whose undivided share in the right has
been converted becomes the sole holder of
the mining right in terms
of the MPRDA. The Minister therefore cannot allocate the share of the
‘old order mining right’
that was not converted or any
share of the mining right in terms of the MPRDA.
ORDER
On appeal from:
North Gauteng High
Court (Pretoria) (Zondo J sitting as court of first instance):
1 The first, second,
third, fourth and fifth appellants’ appeals are dismissed with
costs, such costs to include the costs
of three counsel.
2 Subject to the
amendment of order 1.1 all the orders of the court a quo are
confirmed. Order 1.1 is replaced by the following
order:
‘
It is declared
that as a result of the first applicant’s (SIOC’s)
conversion of its ‘old order mining right’
in respect of
iron ore and quartzite on the Table I properties (the properties
described in Annexure “B” to SIOC’s
amended Notice
of Motion) in accordance with Item 7(3) of Schedule II to the Mineral
and Petroleum Resources Development Act 28
of 2002 (MPRDA) and the
second applicant’s failure to convert its old order right in
respect of iron ore and quartzite on
these properties, the first
applicant became, with effect from midnight on 30 April 2009, the
exclusive holder of a mining right
(SIOC’s converted mining
right) in respect of iron ore and quartzite on the Table I
properties.’
3 The first respondent’s
conditional cross-appeal is dismissed with costs, such costs to
include the costs of three counsel,
where employed.
__________
_______________________________________________________________________
JUDGMENT
__________
_______________________________________________________________________
SOUTHWOOD AJA (BRAND,
LEWIS, CACHALIA JJA AND SWAIN AJA concurring):
[1] When the
Mining and Petroleum Resources Development Act 28 of 2002 (MPRDA) and
its Transitional Arrangements (set out in Schedule
II to the Act)
came into operation, the first respondent, Sishen Iron Ore Company
(Pty) Ltd (SIOC), and the second respondent,
ArcelorMittal South
Africa Limited (AMSA), were co-holders of an ‘old order mining
right’ in respect of iron ore and
quartzite (to which I shall
refer generally as iron ore only) on eight of the Sishen Mine
properties
1
and were entitled to convert their ‘old order
right’ in accordance with the Transitional Arrangements. The
reasons for
the co-holding by SIOC and AMSA of fractions of the
undivided right to mine are discussed below. SIOC duly converted its
old order
mining right but AMSA failed to do so. After the five year
period for conversion expired, the third appellant, the Deputy
Director
General: Mineral Regulation: Department of Mineral Resources
(Deputy DG) purported to grant to the fifth appellant, Imperial Crown
Trading 289 (Pty) Ltd (ICT) a prospecting right in respect of iron
ore on seven of the eight properties to which AMSA’s old
order
right related. He did so on the assumption that he was entitled to
allocate such a right because AMSA had not converted its
undivided
21.4 per cent share of the old order mining right.
[2] These simple facts
gave rise to the litigation between the parties and the main
questions to be answered in this appeal are,
first, what happened to
SIOC’s ‘old order mining right’ (which included
SIOC’s undivided 78.6 per cent
share of the right to iron ore
on eight of the Sishen Mine properties) when SIOC converted its old
order right in accordance with
Item 7 of Schedule II of the MPRDA
before the expiry of the five year period?; secondly, what was the
status of that conversion
if it was wrongly granted and was not
timeously attacked by SIOC or the Minister or the relevant
authorities?; and, thirdly, what
happened to SIOC's mining right (in
terms of the MPRDA) when AMSA, the other co-holder of the ‘old
order mining right’
in respect of iron ore on those properties,
failed to lodge its right for conversion within the five year period?
[3] The court a quo
(Zondo J sitting in the North Gauteng High Court, Pretoria) held that
the co-holder of the old order mining
right, SIOC, which converted
its right, had, as a result of the conversion, become the sole holder
of the mining right created
by the MPRDA. Consequently the first
appellant, the Minister of Mineral Resources (the Minister), could
not competently grant any
right in terms of the MPRDA to any other
party in respect of the same mineral and the same property.
Accordingly, the court a quo
granted declaratory orders at the
instance of AMSA: (1) that SIOC had become the exclusive holder of a
converted mining right in
terms of Item 7(3) of Schedule II to the
MPRDA for iron ore in respect of the properties comprising the Sishen
Mine and (2), that,
in consequence of that order, any decision to
accept or to grant any application for a prospecting or mining right
in respect of
a so-called 21.4 per cent share (or any other share or
shares) in respect of iron ore on any of the Sishen Mine properties,
lodged
after SIOC became the exclusive holder of that converted
mining right, by any person (including SIOC and ICT), as well as any
execution
and registration of any such right pursuant to such grant,
was void ab initio.
[4] For the same reasons
the court a quo granted orders in favour of SIOC (a) setting aside
the decision to grant ICT a prospecting
right for iron ore as to a
21.4 per cent share in respect of the Sishen Mine properties; (b)
setting aside the notarially executed
prospecting right in favour of
ICT and (c) setting aside any registration of such right in the
Mineral and Petroleum Titles registration
office. The court a quo
also ordered SIOC and all the appellants, jointly and severally, to
pay AMSA’s costs and all the
appellants, jointly and severally,
to pay SIOC’s costs. In each case, the costs were to include
the costs of three counsel.
[5] With the leave of the
court a quo, the appellants appealed against the grant of this relief
and SIOC, conditionally (in the
event of the appeal against the
orders granted in favour of AMSA succeeding) cross-appealed against
the refusal of the court a
quo to grant a declaratory order that as
the holder of a converted mining right for iron ore as to a 78.6 per
cent share in respect
of the SIOC properties, SIOC is the sole
competent applicant for, alternatively, the only person which can be
granted a mining
right or a prospecting right for iron ore as to the
remaining 21.4 per cent undivided share in those minerals on the SIOC
properties.
[6] At the
conclusion of the argument the only issue to be decided is what the
effect was of AMSA’s failure to lodge its old
order mining
right for conversion – whether (a) on 5 May 2008 or 18 June
2008, as a matter of fact (as contended by AMSA’s
counsel) or
(b) on 30 April 2009, by operation of law (as contended by SIOC’s
counsel), SIOC became the sole holder of the
mining right in terms of
the MPRDA in respect of iron ore in, on or under the relevant
properties, or whether (c) the share of
the old order mining right
not converted by AMSA, became available for allocation by the State
to either ICT or SIOC (as contended
by ICT’s and the State’s
counsel).
2
SIOC’s counsel therefore did not argue that SIOC
had not become the sole holder of the mining right resulting from the
conversion
or present
any argument in support of SIOC’s conditional cross-appeal.
Since ICT made it clear that it did not intend to exercise
the
prospecting right purportedly granted to it, ICT’s appeal
against the grant of orders 2.1 and 2.2 (which had been sought
by
SIOC against ICT) has become academic and must be dismissed in terms
of s 21A(1) of the Supreme Court Act 59 of 1959.
3
Furthermore, ICT did not advance any argument in respect
of the costs order made in favour of SIOC. This is correct as usually
this
court will not entertain an appeal against a costs order only. I
now turn to consider the remaining issue.
[7] The right to prospect
and mine for minerals is now governed by the MPRDA, which must be
read with the Transitional Arrangements
set out in Schedule II to the
Act. While the MPRDA transformed the legal landscape in respect of
minerals and mining, its effect
was mitigated by the Transitional
Arrangements in respect of the matters provided for in those
arrangements, particularly mining
operations being conducted in
accordance with existing rights (‘old order mining rights’).
It is the role of the Transitional
Arrangements in relation to the
iron ore mining operations conducted by SIOC and AMSA at SIOC’s
Sishen Iron Ore Mine (Sishen
Mine) in the Northern Cape Province
which must be considered. These mining operations were being
conducted by SIOC pursuant to
SIOC’s and AMSA’s
jointly-held right to the iron ore on the properties and the mining
authorisations which they held.
As already mentioned the disputes
involved in this litigation arose because SIOC and AMSA jointly held
the mineral right to iron
ore on the properties and SIOC converted
its rights in accordance with the Transitional Arrangements. AMSA,
however, failed to
do so.
The Sishen mine and
the contractual arrangements in respect of it between SIOC and AMSA
[8] The
rights involved relate to eight
4
of the 21
5
properties near the town of Kuruman,
in the
Northern Cape Province, on which the Sishen Mine is situated. This is
a vast operation, said to be one of the largest open
cast mines in
the world. When these proceedings commenced in 2010, the mining
operations covered 1417,767 hectares. They were conducted
in a pit,
10-11 kilometres long, two to three kilometres wide and with an
average depth of 250 metres. The mining activities were
conducted 24
hours a day, seven days a week, and each day produced about 460 000
metric tons of run of mine and waste rock. There
was an extensive
mining infrastructure which included beneficiation plant buildings
and equipment; office buildings; mining , access
and service roads;
conveyor belts; power lines; railway lines; rock crushers; material
stockpiles; maintenance workshops and storage
areas. The total area
subject to SIOC’s mining rights was approximately 36 000
hectares. Enormous quantities of iron ore
had been mined at the
Sishen Mine from the early 1950s. So it was with good reason that
SIOC launched its application to set aside
the right granted to ICT
to prospect (search) for iron ore on the 8 properties.
6
The irrationality of granting a prospecting right to
search for iron ore on properties on which one of the biggest iron
ore mines
in the world is situated is manifest. The only plausible
inference is that this was done to give ICT a preferential right to
apply
for a mining right in that area.
7
I shall refer to the contentious eight properties
collectively as the ‘Table I properties’ and the other 13
properties
collectively as the ‘Table II properties’.
[9] The contractual
arrangements of SIOC and AMSA explain the way in which they came to
have undivided shares in the right to iron
ore on the Table 1
properties. AMSA, formerly called Iscor Ltd (Iscor), has conducted
mining operations at the Sishen mine since
the early 1950s. From then
until 2002 Iscor was a vertically integrated iron ore mining and
steel manufacturing company. It mined
iron ore and quartzite at its
mines at Sishen and Thabazimbi and manufactured steel at its plants
at Vanderbijlpark, Vereeniging,
Newcastle and Saldanha. Over the
years the mining business prospered but the steel manufacturing
business suffered as a result
of depressed international steel
prices. In 2001 Iscor’s Board and shareholders decided to
unbundle the business into a mining
business which would be conducted
by SIOC, and a steel manufacturing business
which would be conducted
by Iscor. To achieve this, it was necessary for Iscor to transfer to
SIOC all the properties on which Iscor
conducted mining operations
together with the relevant mining authorisations. However, to
safeguard Iscor’s supply of iron
ore for its steel
manufacturing business, Iscor would retain some of its rights. In
particular Iscor wished to ensure that it received
up to 6.25 million
tons per annum (mtpa) of iron ore from the Sishen mine at a price
determined for the duration of the mine. That
price was the cost of
extracting the required amount of iron ore plus three per cent.
[10] The unbundling was
achieved by means of a series of written agreements which had to
provide for the following:
(1) Iscor would retain
its steel manufacturing business and transfer its mining assets to
SIOC;
(2) Iscor would continue
to receive for its steel manufacturing business some 8.5 mtpa of iron
ore from the mines which were transferred
to Sishen: 2.25 mtpa from
the Thabazimbi mine on a cost-related basis over the projected
lifetime of the mine and 6.25 mtpa of
iron ore from the Sishen mine
at cost plus 3 per cent over the projected lifetime of the mine;
(3) Iscor would absorb,
on unbundling, a greater proportion of its existing debt than it
otherwise would have done because, on listing,
the supply price of
the iron ore from the Sishen mine would reduce the value of the
mining business. The additional debt attributable
to Iscor to
compensate SIOC for the preferential procurement arrangement was
about R2.1 billion, which was roughly the difference
between the
market value of 6.25 mtpa of iron ore and the cost-related basis upon
which Iscor would acquire the iron ore over the
life of the Sishen
mine. In effect, this R2.1 billion represented payment to SIOC in
advance for the profit component in respect
of the 6.25 mtpa over the
life of the Sishen mine.
[11] In 2001 Iscor and
SIOC estimated that 6.25 mpta was roughly equal to 21.4 per cent of
the then output of the Sishen mine. Accordingly,
the Iscor
shareholders, the State and the Industrial Development Corporation,
insisted that Iscor retain 21.4 per cent of the rights
to iron ore at
the Sishen mine to ensure the supply of 6.25 mtpa of iron ore in the
event of SIOC disposing of its interest in
the Sishen mine.
[12] On 10 April 2001,
Iscor sold to SIOC, with effect from 1 July 2001, Iscor’s
entire operation in relation to the business
of prospecting for,
mining and processing of iron ore (I shall refer to this agreement as
the ‘Acquisition Agreement’).
The assets sold included
the Table I and Table II properties. At that time Iscor held all the
mineral rights in respect of these
properties.
[13] On 22 October 2001
Iscor and SIOC entered into a notarial amendment to the Acquisition
Agreement in terms of which they agreed
to continue to implement the
acquisition of the properties by SIOC but to exclude from the assets
sold a 21.4 per cent undivided
share in the right to iron ore in
respect of the Table I properties. This meant that SIOC would receive
a 78.6 per cent undivided
share in the right to iron ore in respect
of those properties. The amendment to the Acquisition Agreement was
conditional on the
DG approving, in terms of s 20(3) of the Minerals
Act, the division of the right to iron ore and quartzite in respect
of the Table
I properties.
[14] On 22 October 2001
Iscor and SIOC applied to the DG for his approval in terms of s 20(3)
of the Minerals Act for the division
of the right to iron ore in and
upon the Table I properties about to be held by Iscor under a
Certificate of Rights to Minerals:
‘
Between:
Iscor
as to a 0,214000 (NOUGHT comma TWO ONE FOUR NOUGHT NOUGHT NOUGHT)
undivided share to be retained by Iscor in terms of the
above
Certificate of Rights to Minerals about to be registered in its
favour.
Sishen
as to a 0,786000 (NOUGHT comma SEVEN EIGHT SIX NOUGHT NOUGHT NOUGHT)
undivided share to be ceded by Iscor to Sishen by way
of a Notarial
Deed of Cession of Mineral Rights about to be registered in favour of
Sishen.’
On 13 November 2001 the
DG granted approval for the right to the iron ore in respect of the
Table I properties to be divided into
undivided shares: a 21,4 per
cent undivided share to be held by Iscor and a 78,6 per cent
undivided share to be held by SIOC.
[15] On 23 October 2001
Iscor and SIOC entered into a further agreement (which I shall refer
to as the ‘Supply Agreement’)
in terms of which Iscor
would appoint SIOC to mine Iscor’s iron ore on the Table I
properties in accordance with Iscor’s
undivided share of the
right to the minerals. They also agreed that the Supply Agreement
would govern their relationship in the
future and supersede and
cancel all prior agreements, arrangements, letters of intent and
letters of acceptance. At that stage,
Iscor still held 100 per cent
of the mineral rights in respect of the Table I properties but the
preamble recorded that Iscor was
in the process of transferring 78.6
per cent of the iron ore or mineral rights in the Table I properties
to SIOC together with
100 per cent of all the other mineral rights
and thus would retain a 21.4 per cent undivided share in the mineral
right pertaining
to iron ore in and upon the Table I properties.
[16] The essential terms
of the Supply Agreement may be briefly summarised –
(1) the parties agreed
that their intended long term business relationship in respect of the
mining of iron ore at the Sishen mine
would be regulated only by the
agreement;
(2) SIOC would mine the
iron ore at the Sishen mine on behalf of Iscor and would continue to
supply Iscor with iron ore for a period
of not less than 25 years
from 1 July 2001;
(3) Iscor would pay SIOC
for the iron ore delivered by SIOC to Iscor, the cost of mining and
producing the iron ore plus 3 per cent
of that cost, which was SIOC’s
remuneration for services rendered in terms of the agreement;
(4) Iscor and SIOC
acknowledged that because they held undivided shares in the iron ore
on the properties, ownership of the iron
ore would be determined only
when the iron ore had been loaded onto the rail wagons;
(5) Iscor and SIOC
acknowledged that the Minerals Act would be repealed and replaced by
the MPRDA, that the concept of the common
law ownership of mineral
rights would be extinguished and replaced by a mineral rights regime
premised on the vesting in the State
of the right to prospect and
mine for all minerals and the parties reciprocally undertook towards
each other-
‘
.
. . that they shall, from the date of the promulgation of the Bill as
binding legislation, take all such steps, do all such things
and sign
all such documentation as may be necessary to give effect to and
implement the provisions of this Agreement in the context
of the
mineral rights regime and the administrative requirements of the new
legislation.’
The Supply Agreement was
conditional on the Iscor shareholders approving the unbundling of
Iscor before 30 November 2001, which
the shareholders did.
[17] Pursuant to these
agreements and the DG’s approval of the division of the right
to iron ore in respect of the Table I
properties the following deeds
were registered in the Deeds Registry on 5 December 2001:
(1) Certificate of Rights
to Minerals K47/2001 RM in terms of which the rights to all minerals
(excluding gold, silver and precious
stones) in respect of the Table
I properties were severed from the ownership of the land and
henceforth held by Iscor under separate
title;
(2) Deed of Transfer No
3280/2001 in terms of which Iscor transferred ownership of the Table
I and Table II properties to SIOC,
together with the mineral rights
(excluding gold, silver and precious stones) in the Table II
properties but retained all rights
to minerals (excluding gold,
silver and precious stones) in the Table I properties;
(3) Notarial Deed of
Cession of Mineral Rights K48/2001 RM in terms of which Iscor ceded
to SIOC a 78,6 per cent share of the right
to iron ore in and upon
the Table I properties and the rights to all other minerals
(excluding gold, silver and precious stones)
in the Table I
properties.
[18] Accordingly, by
December 2001 SIOC and Iscor (now called AMSA) had become joint
holders, in undivided shares, of 78,6 per cent
and 21.4 per cent
respectively, of the common law right to iron ore in respect of the
Table I properties; SIOC had become the sole
owner of the mineral
rights in respect of the Table II properties and SIOC and AMSA had
entered into an agreement governing their
relationship in respect of
the mining of iron ore in, on or upon the Table I properties.
[19] On 17 October 2002
the Department of Minerals and Energy issued Permit ML07/2002 in
terms of which SIOC was authorised to mine
for iron ore on the Table
I and Table II properties and on the same date the Department issued
Permit ML06/2002 in terms of which
AMSA was authorised to mine for
iron ore on the Table I properties. Each permit reflects that the
holders of the mineral rights
are SIOC and AMSA and that the licence
shall be valid from the date of issue until 16 October 2032. The part
of the annexure to
the permit issued to SIOC which lists the Table I
properties is headed ‘A 0,786000 (NOUGHT comma SEVEN EIGHT
NOUGHT (sic)
NOUGHT NOUGHT NOUGHT) share of the rights to iron ore in
and upon:’. The heading of the annexure to the permit issued to
AMSA is the same save that the heading to the list is ‘[A]
0,214000 (NOUGHT comma TWO ONE FOUR NOUGHT NOUGHT NOUGHT) share
of
the rights to iron ore in and upon:’ Except for these
differences and the properties to which they related, the permits
were identical.
[20] Thereafter SIOC
conducted the mining operations at the Sishen mine and delivered iron
ore to AMSA in accordance with the Supply
Agreement. AMSA had ceased
to be a mining company and it now manufactured steel. The Supply
Agreement imposed a multiplicity of
obligations on SIOC in connection
with the mining operations at the Sishen mine.
The changes to the law
[21] Against
that background I shall consider first how the MPRDA changed the law.
Under the common law the holder of the rights
to minerals which had
been separated from the ownership of land was entitled ‘to go
upon the property to which they relate
to search for minerals, and,
if he (the holder) finds any, to sever them and carry them away’.
8
Because these rights could not be fitted into the
traditional classification of servitudes with exactness, they became
known as
quasi servitudes. They were real rights and their exercise
could conflict with the rights of the landowner. Where there was an
irreconcilable conflict the interests of the landowner were
subordinated in order to preserve the content of the mineral right.
While the minerals remained in the ground they were the property of
the landowner. Only after the holder of the right to minerals
severed
them did they become movables owned by him.
9
[22] The provisions of
the Minerals Act 50 of 1991 (which applied from 1 January 1992 until
it was repealed by the MPRDA) were to
the same effect. Section 5(1)
provided that -
‘
the
holder of the right to any mineral in respect of land or tailings, as
the case may be, or any person who has acquired the consent
of such
holder in accordance with section 6(1)(
b
)
or 9(1)(
b
),
shall have the right to enter upon such land or the land on which
such tailings are situated, as the case may be, together with
such
persons, plant or equipment as may be required for purposes of
prospecting or mining and to prospect and mine for such mineral
on or
in such land or tailings, as the case may be, and to dispose
thereof’.
Further, under subsecs
1(a)(i)-(ii), the definition of ‘holder’ meant, amongst
other things,
in
relation to a mineral in respect of land or any undivided share
therein, the owner of such land: Provided that –
[I]f
the right to such mineral or an undivided share therein has been
severed from the ownership of the land concerned, the person
in whose
name such right or an undivided share therein is registered in the
deeds office concerned, either by means of a separate
deed or by
means of a reservation in the title deed of the land concerned; or
[I]f
the right to such mineral or an undivided share therein vests in any
other manner in a person, that person, shall be the holder’,
but s 5(2) provided
clearly that
‘
no
person shall prospect or mine for any mineral without the necessary
authorization granted to him in accordance with this Act.
. .’
[23] The
Minerals Act 50 of 1991 (the Minerals Act) also provided for the
issue of mining authorisations in certain circumstances
10
and for the division of rights to any mineral or
minerals in respect of any land amongst two or more persons into
undivided shares,
provided that this was approved in writing by the
Director-General.
11
[24] The
MPRDA fundamentally changed the law relating to mineral rights and
the right to prospect for and mine minerals. With effect
from 1 May
2004, when the Act commenced, all mineral and petroleum resources
vested in the State, as the custodian thereof
12
and (subject to the Transitional Arrangements) all
mineral rights as they were known prior to that date ceased to exist.
Henceforth,
the Minister would grant any right necessary for the
purpose of searching or prospecting for or mining any mineral.
13
The MPRDA made no provision for the continuation of
existing prospecting or mining operations. This was regulated by the
Transitional
Arrangements.
[25] The
meaning and effect of the MPRDA and its Transitional Arrangements in
relation to mining operations being conducted before
the commencement
of the MPRDA have been considered in some detail in three recent
judgments of this Court:
Holcim SA (Pty) Ltd v
Prudent Investors (Pty) Ltd
[2011] 1 All SA
364
(SCA); Xstrata
South Africa (Pty) Ltd &
others v SFF Association
2012 (5) SA 60
(SCA); and
Minister of Minerals and Energy v
Agri South Africa
2012 (5) SA 1
(SCA). Before
summarising the statements of the law in these cases it will be
convenient to refer to Item 7 of Schedule II which
regulates the
continuation of an ‘old order mining right’ which is an
‘old order right’ in terms of the
Schedule. An ‘old
order mining right’ means, amongst other things, a ‘right
listed in Table 2 to this Schedule
in force immediately before the
date on which this Act took effect and in respect of which mining
operations are being conducted’.
14
One of the old order mining rights listed in Table 2 is
‘the common law mineral right, together with a mining
authorisation
obtained in connection therewith in terms of s 9 (1) of
the Minerals Act’. As will appear later, SIOC and AMSA each
held
an undivided share in respect of iron ore and quartzite in
respect of the Table I properties, together with a mining
authorisation
issued in connection therewith in terms of s 9(1) of
the Minerals Act.
[26] Item 7 of Schedule
II reads as follows:
‘
7
Continuation of old order mining right
(1)
Subject to subitems (2) and (8), any old order mining right in force
immediately before this Act took effect continues in force
for a
period not exceeding five years from the date on which this Act took
effect subject to the terms and conditions under which
it was granted
or issued or was deemed to have been granted or issued.
(2)
A holder of an old order mining right must lodge the right for
conversion within the period referred to in subitem (1) at the
office
of the Regional Manager in whose region the land in question is
situated together with─
(a)
the prescribed particulars of
the holder;
(b)
a sketch plan or diagram
depicting the mining area for which the conversion is required, which
area may not be larger than the area
for which he or she holds the
old order mining right;
(c)
the name of the mineral or group
of minerals for which he or she holds the old order mining right;
(d)
an affidavit verifying that the
holder is conducting mining operations on the area of the land to
which the conversion relates and
setting out the periods for which
such mining operations conducted;
(e)
a statement setting out the
period for which the mining right is required substantiated by a
mining work programme;
(f)
a prescribed social and labour
plan;
(g)
information as to whether or not
the old order mining right is encumbered by any mortgage bond or
other right registered at the
Deeds Office or Mining Titles Office;
(h)
a statement setting out the
terms and conditions which apply to the old order mining right;
(i)
the original title
deed in respect of the land to which the old order mining right
relates, or a certified copy thereof;
(j)
the original old order right and
the approved environmental management programme or certified copies
thereof; and
(k)
an undertaking that, and the
manner in which, the holder will give effect to the object referred
to in section 2(
d
)
and 2(
f
).
(3)
The Minister must convert the old order mining right into a mining
right if the holder of the old order mining right─
(a)
complies with the
requirements of subitem (2);
(b)
has conducted mining
operations in respect of the right in question;
(c)
indicates that he or
she will continue to conduct such mining operations upon the
conversion of such right;
(d)
has an approved
environmental management programme; and
(e)
has paid the
prescribed conversion fee.
(4)
No terms and conditions applicable to the old order mining right
remain in force if they are contrary to any provision of the
Constitution or this Act.
(5)
The holder must lodge the right converted under subitem (3) within 90
days from the date on which he or she received notice
of conversion
at the Mining Titles Office for registration and simultaneously at
the Deeds Office or for the Mining Titles Office
for deregistration
of the old order mining right as the case may be.
(6)
If a mortgage bond has been registered in terms of the Deeds
Registries Act, 1937 (Act 47 of 1937), or the Mining Titles Act,
1967
(Act 16 of 1967), over the old order mining right, the mining right
into which it was converted must be registered in terms
of this Act
subject to such mortgage bond, and the relevant registrar must make
such endorsements on every relevant document and
such entries in his
or her registers as may be necessary in order to give effect to this
subitem, without payment of transfer duty,
stamp duty, registration
fees or charges.
(7)
Upon the conversion of the old order mining right and the
registration of the mining right into which it was converted the old
order mining right
ceases
to exist
.
(8)
If the holder fails to lodge the old order mining right for
conversion before the expiry of the period referred to in subitem
(1), the old order mining right
ceases
to exist
.’ (My
emphasis.)
[27] The
legal position before the MPRDA, during the operation of the
Provisional Arrangements, and after conversion of the old
order
mining right, as it is stated in
Holcim,
Xstrata
and
Agri SA
,
may be summarised as follows:
(a) Under the Minerals
Act a person wishing to mine a mineral had to hold the right to
exploit that mineral, either because that
person held a right to that
mineral or was authorised to exploit the mineral by the holder of the
right and had to be in possession
of a mining authorisation issued in
terms of the Minerals Act. The mining authorisation gave practical
value to the mineral rights
by authorising the holder to exercise
them. (
Holcim
paras 22 and 37;
Xstrata
para 1;
Agri
SA
para 70-71);
(b) From the time when
the MPRDA came into operation all mineral and petroleum resources
vested in the State as custodian thereof
and from that date the State
has conferred the right to exploit such resources in terms of s 23 of
the MPRDA. (
Holcim
para 20;
Xstrata
para 1;
Agri SA
paras 8-10);
(c) The purpose of the
Transitional Arrangements is to avoid disrupting existing mining
operations. They do this by providing that
the relevant rights (‘the
old order right’) remain in force for a period of five years
and that during that period
the holder of the old order right is
entitled to convert it into a mining right in terms of the MPRDA
(
Holcim
para 26;
Xstrata
para 1;
Agri SA
paras
77-78);
(d) The statutory ‘old
order right’ referred to in the definitions of Schedule II is a
new statutory right and is not
merely the previous right under a
different guise (
Holcim
para 37;
Xstrata
para 10;
Agri
SA
para 76). This new statutory right embodies the rights
previously enjoyed under the relevant old order right, together with
an
entitlement to convert that right into a mining right under the
MPRDA (
Holcim
para 37;
Xstrata
para 10;
Agri SA
para 78);
(e) The object of the
Transitional Arrangements is to achieve ‘the seamless
continuation of existing mining operations which
are tested . . . by
the scope of the licence pursuant to which the operations are being
conducted’ (
Holcim
para 26;
Agri SA
para 78 and
80);
(f) The main body of the
MPRDA does not deal with pre-existing mining rights or their holders.
Existing mining rights are only relevant
in relation to the
Transitional Arrangements and the way they are dealt with depends
upon whether they had been exercised under
the Minerals Act or not.
If they had not been exploited by the time the MPRDA commenced, they
‘simply disappeared into thin
air’ (
Holcim
para
25; see also
Agri SA
para 80);
(g) In terms of Item 7(1)
of the Schedule the old order mining right continues for five years.
During that period, the holder continues
to enjoy precisely the same
rights enjoyed under the Minerals Act save that the holder is
entitled to convert the right but is
not entitled to transfer that
right to a third party. The holder may only convert the old order
right if he or she lodges the right
for conversion within the
five-year period and complies with the requirements of Item 7(3)
(
Agri SA
paras 77-78);
(h) Upon conversion, the
holder of the old order mining right becomes the holder of a mining
right under the MPRDA ‘with all
the advantages flowing from
such right as set out in s 5, read with s 23 and 24 of the MPRDA’
(
Agri SA
para 78).
[28] It is clear from
these statements that the package that constituted the old order
mining right (the common law right to the
mineral and the mining
authorisation) (
Holcim
para 15) is, in accordance with the
Transitional Arrangements, converted into the right described in s 5
of the MPRDA (a limited
real right in respect of the mineral and the
land to which such right relates, which, subject to the MPRDA,
entitles the holder
to (1) enter the land to which the right relates
together with his or her employees, and to bring onto that land any
plant, machinery
or equipment and to build, construct or lay down any
surface, or underground infrastructure which may be required for the
purpose
of mining; (2) mine for his or her own account on or under
that land for the mineral for which such right had been granted; (3)
remove and dispose of such mineral during the course of mining; (4)
subject to the
National Water Act 36 of 1998
, use water from any
natural spring, lake, river or stream, situated on or flowing
through, such land or from any excavation previously
made and used
for prospecting, mining, exploration or production purposes, or sink
a well or borehole required for use relating
to prospecting, mining,
exploration or production on such land; and (5) carry out any other
activity incidental to mining or production
operations which does not
contravene the provisions of the MPRDA.
[29] The
Transitional Arrangements do not pertinently provide for the
conversion of an ‘old order right’ where the mineral
right is held in undivided shares by two or more persons, but the
provisions must be understood to apply equally to such a situation
because one of the objects of the arrangements is to ‘ensure
that security of tenure is protected in respect of . . . mining
and
production operations which are being undertaken’.
15
The Legislature was obviously aware of the relevant
provisions of the Minerals Act and therefore knew that the right to a
particular
mineral on a specific property could be held by two or
more persons in undivided shares. The Legislature was also aware that
such
persons were entitled to mine the mineral if they were in
possession of a mining authorisation issued in terms of s 9 of the
Minerals
Act. Unless they could convert these rights into the mining
right created by s 5 of the MPRDA they would not enjoy security of
tenure and there would be no ‘seamless continuation of existing
mining operations’. In principle there is no reason
why two or
more persons should not be able to be joint holders of a mining right
in terms of the MPRDA provided they can comply
with the relevant
provisions of the MPRDA.
16
It seems to me that the co-holder's undivided share in
the right to the relevant mineral would be converted to an undivided
share
in the limited real right in respect of the mineral and the
land to which the right relates and each co-holder would enjoy the
rights set out in s 5(2) of the MPRDA. How the co-holders would share
the mineral after it has been severed from the ground would
have to
be regulated by agreement between the co-holders. The present case is
a good example. As previously shown, SIOC and AMSA
are parties to a
comprehensive agreement which regulates their mining activities and
the manner in which they will share the iron
ore mined on the
properties.
The conversion of
SIOC’s right and the consequences
[30] The MPRDA and
Transitional Arrangements commenced on 1 May 2004. As already
mentioned, the Transitional Arrangements in Schedule
II regulated the
position in respect of existing ‘old order rights’. SIOC
and AMSA held abortive discussions about
jointly lodging their old
order mining rights for conversion in terms of Item 7 of Schedule II
of the MPRDA. Such an application
had to be lodged on or before 30
April 2009.
[31] On 12 December 2005
SIOC lodged for conversion its old order mining right to mine for
iron ore in, on and under both the Table
I properties (in respect of
which SIOC and AMSA jointly held undivided shares in the common law
mineral right to iron ore) and
the Table II properties (in respect of
which SIOC alone held the common law mineral right to mine ore) with
the Regional Manager,
Northern Cape Region.
[32] The documents which
SIOC lodged for conversion were unqualified and related to the entire
iron ore deposit on the Table I and
Table II properties. This appears
from the Lodgment Document and the Mining Work Program which
accompanied it. SIOC therefore sought
a mining right in respect of
iron ore on both the Table I and Table II properties.
[33] On 23 April 2008 the
Regional Manager addressed a written recommendation to the DG in
which the Regional Manager recommended
that the conversion be
approved as SIOC had complied with all the requirements of Item 7(3)
of Schedule II to the MPRDA. The Regional
Manager also requested the
DG to sign the power of attorney authorizing the Regional Manager to
sign, on the Minister’s behalf,
the mining right to be
converted. On 5 May 2008 the DG, Mr S Nogxina, signed the document
approving the conversion as well as the
power of attorney which
clearly and unambiguously stated that the old order mining right was
converted in terms of Item 7(3) of
Schedule II to the MPRDA into a
mining right in respect of a number of properties set out in an
annexure to the power of attorney
to mine iron ore and quartzite
according to the approval signed that day. The relevant Annexure
lists the Table I and Table II
properties.
[34] On 5 May 2008 and 18
June 2008, Nogxina addressed letters to SIOC to inform SIOC that the
conversion of its old order mining
right had been granted in terms of
Item 7(2) of Schedule II of the MPRDA and on 11 November 2009 the
terms and conditions of SIOC’s
converted mining right for iron
ore in respect of the Table I and Table II properties were notarially
executed by the Minister’s
delegate and SIOC. Clause 2 of the
document states that –
‘…
the
Minister converts the holder’s old order right and grants to
the holder the sole and exclusive right to mine, and recover
the
mineral/s in, on and under the mining area for the Holder’s own
benefit and account, and to deal with, remove and sell
or otherwise
dispose of the mineral/s, subject to the terms and conditions of this
mining right, the provisions of the Act and
any other relevant law in
force for the duration of this right.’
The ‘mining area’
comprises the 21 Table I and Table II properties.
[35] AMSA did not lodge
for conversion its old order mining right in respect of iron ore on
the Table I properties before 30 April
2009, the expiry date for such
lodgment, and, accordingly, as provided in Item 7(8) of Schedule II
of the MPRDA, at midnight on
30 April 2009 AMSA’s old order
mining right ceased to exist.
[36]
Sometime between 30 April and 4 May 2009
17
–
(1) SIOC applied in terms
of s 23 of the MPRDA for a mining right in respect of a 21.4 per cent
share in iron ore in respect of
the Table I properties;
(2) ICT applied in terms
of s 16 of the MPRDA for a prospecting right in respect of iron ore
and manganese on seven of the Table
I properties.
[37] On 15 May 2009 the
Regional Manager, Northern Cape Region accepted ICT’s
application for a prospecting right in terms
of s 16(2) of the MPRDA
and SIOC’s application for a mining right in respect of a 21.4
per cent share in respect of the Table
I properties in terms of s
22(2) of the MPRDA.
[38] On 19 June 2009 SIOC
lodged with the Department of Mineral Resources an objection to ICT’s
application for a prospecting
right, and, in August and October 2009,
made further representations to the Regional Manager in connection
with ICT’s application.
On 6 October 2009 SIOC addressed a
letter to the Regional Manager seeking an answer to its objection to
ICT’s application
for a prospecting right and, on the same day,
the Regional Manager submitted a written recommendation to the Deputy
DG that ICT’s
application be refused.
[39] Thereafter SIOC
directed further enquiries to the Regional Manager and to the Chief
Director Department of Mineral Rights regarding
ICT’s
application and, although the Regional Manager and the Chief Director
undertook to investigate the matter further,
nothing came of their
undertakings.
[40] On 30 November 2009
the Acting Deputy DG, Mr Rocha, granted ICT’s application for a
prospecting right and signed the
power of attorney authorizing
execution of the deed incorporating the right in respect of manganese
ore but omitting any reference
to iron ore.
[41] In February 2010
SIOC discovered that ICT’s application had been granted and on
1 March 2010 SIOC lodged an appeal in
terms of s 96 of the MPRDA
against the decision to grant ICT a prospecting right and the
decision to approve ICT’s environmental
management plan.
[42] On 16 March 2010 the
Regional Manager approved ICT’s environmental management plan
and the Acting Deputy DG signed an
amended power of attorney to
provide for the registration of a prospecting right in respect of
iron ore. On the same day,
the Chief Mine Economist
signed a Mine Economics Valuation Report in which he concluded that
ICT’s application for a prospecting
right complied with the
minimum requirements of s 17(1) of the MPRDA and the ICT prospecting
right was notarially executed. The
prospecting right was to remain in
force for two years from the date of its execution.
[43]
In the meantime, arising out of AMSA’s failure to lodge for
conversion its old order mining right to mine iron ore in
respect of
the Table I properties, SIOC, in February 2010, had informed AMSA
that it, SIOC, was no longer bound by the Supply Agreement
to mine
iron ore on behalf of AMSA and to deliver to AMSA, at the agreed
price, up to 6.25 mpta of iron ore every year. This gave
rise to a
dispute which SIOC and AMSA referred to arbitration. Although they
have filed arbitration statements, they have not proceeded
with a
hearing because of the issues to be decided in this appeal.
18
The key dispute in the arbitration
seems to relate to the effect on the Supply Agreement of AMSA’s
failure to convert, in
accordance with Item 7 of Schedule II of the
MPRDA, its old order mining right to mine iron ore in, on or under
the Table I properties.
[44] On 21 May 2010 SIOC
launched its review application in the North Gauteng High Court,
Pretoria, seeking, as against the five
appellants, orders reviewing
and setting aside the decision in terms of s 17 of the MPRDA to grant
a prospecting right to ICT relating
to iron ore as to a 21.4 per cent
share (and as to a 100 per cent share in so far as the remaining
extent of Portion 4 of the farm
Sacha 468 is concerned) and manganese
ore in respect of seven of the Table I properties; reviewing and
setting aside the decision
in terms of s 39(4) of the MPRDA to
approve ICT’s environmental management plan pursuant to the
grant of the prospecting
right and other relief. All the appellants
opposed the application and filed answering affidavits.
[45] On 16 August 2010
the Minister addressed a letter to SIOC in which she informed SIOC
that she had decided to uphold the decision
of the Deputy DG to grant
the prospecting right to ICT and to uphold the decision of the
Regional Manager to approve
ICT’s environmental
management program.
[46] In early 2011, when
SIOC’s application for a review had reached an advanced stage,
SIOC and AMSA each applied for the
joinder of AMSA as a party to the
proceedings; SIOC wished AMSA to be joined as an applicant and AMSA
wished to be joined as a
respondent. The court a quo granted SIOC’s
application and joined AMSA as an applicant. AMSA then filed its own
substantive
application seeking, amongst other relief, orders
declaring (1) that SIOC became, with effect from 5 May 2008,
alternatively, 18
June 2008, the exclusive holder of a converted
mining right in terms of Item 7(3) of Schedule II to the MPRDA for
iron ore and
quartzite in respect of the Table I and II properties
(where the Sishen mine is situated) and (2) declaring that, in
consequence,
any decision taken to accept or to grant any application
lodged after 5 May 2008 or 18 June 2008 (including by Sishen and ICT)
for a prospecting right, mining right or mining permit in respect of
a 21.4 per cent share (or any other share or shares) for iron
ore and
quartzite in respect of the Table I and II properties, as well as any
execution and registration of any such right pursuant
to such grant
is void ab initio; and declaring that clause 8 of the terms and
conditions of SIOC’s converted mining right,
executed in
November 2009, did not preclude SIOC from supplying iron ore to AMSA
from the Sishen mine at cost plus 3 per cent as
agreed in the Supply
Agreement entered into on 23 October 2001.
[47] In its application
AMSA challenged the common assumption of all the other parties to the
litigation that prior to 30 April
2009, AMSA held a distinct 21.4 per
cent share in the right to the iron ore on the Table I properties and
that the relevant old
order mining right lapsed because AMSA did not
lodge a conversion application in terms of the MPRDA’s
Transitional Arrangements.
It also contended that it was not a
consequence of the lapsing of this limited right, after 30 April
2009, that it was open to
SIOC and / or ICT to apply for a new order
prospecting and or mining right in respect of this 21.4 per cent
share. The basis of
AMSA’s challenge was that SIOC had applied
for and had been validly granted the exclusive mining right in
respect of iron
ore in respect of the Table I and II properties and
that, accordingly, it was not possible for any party to apply for a
21.4 per
cent right in respect of the Table I properties as no such
right exists. AMSA also contended that an administrative decision was
taken on 5 May 2008 to convert SIOC’s old order mining right
into an exclusive mining right in respect of the Table I and
II
properties; that this decision clearly and unambiguously granted SIOC
the sole and exclusive right to mine the iron ore on the
Table I or
II properties and that that administrative action had not been
challenged by any party either on appeal or on review
and was
therefore valid and binding.
[48]
It will be remembered that the court a quo accepted AMSA’s
contentions and granted the declaratory relief which it sought.
For
the same reasons the court a quo granted the relief sought by SIOC
referred to at the beginning of this judgment. Although
granting this
relief on the basis contended by AMSA, the court a quo recorded that
at least one of SIOC’s grounds for this
relief was good.
19
[49] The appellants
contend that SIOC did not seek the conversion of its old order mining
right (which was limited in respect of
the Table I properties) into a
mining right in respect of the Table I and Table II properties. I
disagree. First, the decision
is clear and unambiguous. Secondly, in
so far as they are relevant, the documents lodged in support of the
conversion: the Regional
Manager’s recommendation to the DG,
the DG’s letters dated 5 May 2008 and 18 June 2008 to SIOC to
inform SIOC that
its rights had been converted, the power of attorney
signed by the DG and the converted mining right executed on 11
November 2009
leave no room for doubt that SIOC sought to convert,
and was understood by the Regional Manager to seek to convert, its
old order
mining right without qualification, into a mining right in
terms of the MPRDA. While SIOC held an undivided 78.6 per cent share
in the right to iron ore on the Table I properties, it held the
entire right to iron ore on the Table II properties and its mining
authorisation clearly related to all the properties. It could not be
otherwise. A mining authorisation simply authorises the holder
to
mine the mineral to which it relates. The fact that the holder’s
right to the mineral is limited is irrelevant. In compliance
with
Item 7(2)(j) of Schedule II, SIOC had lodged with its documents for
conversion the original old order right which consisted
of the
Notarial Deed of Cession of Mineral Rights K 48 2001 RM and Mining
Licence ML07/2002, both of which reflect that SIOC held
an undivided
78.6 per cent share of the right to iron ore in respect of the Table
I properties and the entire right to iron ore
in respect of the Table
II properties. SIOC’s limited interest in the right to iron ore
in respect of the Table I
properties was therefore
disclosed and had to be taken into account by the Regional Manager
and the Minister when converting the
old order right. This was not
disputed by the State’s witnesses. It would serve no purpose to
attempt to divine SIOC’s
real intention (assuming it to be
different) when the objective evidence is so clear.
[50]
The court a quo therefore correctly found on the facts that after the
conversion SIOC was the sole holder of the mining right
in respect of
the Table I and Table II properties. The conversion took place on the
date of the Minister’s decision (the
DG took the decision on
behalf of the Minister), 5 May 2008.
20
What would have happened if AMSA had
sought to convert its old order right on or before 30 April 2009 will
be considered later.
[51]
The court a quo also found that until the Minister’s decision
to convert SIOC’s old order mining right to a single
mining
right in terms of the MPRDA (in respect of the Table I and Table II
properties) was set aside, it had legal effect in accordance
with the
principle stated in
Oudekraal
Estates (Pty) Ltd v City of Cape Town
2004
(6) SA 222
(SCA) para 26: that an administrative decision, whether it
be right or wrong, stands until set aside. Accordingly, the court a
quo found that not even AMSA could apply for the conversion of its
old order mining right into a mining right in terms of the MPRDA
within the five year period. The State appellants contend that the
Oudekraal
principle does not apply on the facts
of this case because there was not an initial invalid administrative
act (the grant of the
conversion of SIOC’s old order mining
right) followed by a series of administrative acts pursuant to the
initial act. The
State appellants and ICT argued that the
Oudekraal
principle can apply only where the
substantive validity of the initial decision was a necessary
precondition for the validity of
subsequent acts. In addition, ICT
contended that the grant of the conversion to a single mining right
in terms of the MPRDA was
a clerical error which could be corrected
(in terms of s 103(4)(b) of the MPRDA) at any time before
registration of the right.
This registration has not yet taken place.
[52] In my view, s
103(4)(
b
) of the MPRDA clearly empowered the Minister to
withdraw or amend the DG’s decision to grant SIOC the entire
mining right
in so far as it related to
the Table I properties.
Until midnight on 30 April 2009 AMSA had the right to convert its old
order right and had it sought to do
so the Minister would have been
obliged to withdraw or amend the DG’s decision in respect of
the Table I properties so that
AMSA’s rights could be
accommodated. However, this conclusion cannot assist the appellants
because AMSA did not seek to convert
its old order right.
[53] The appellants are
thus faced by an insurmountable obstacle: the provisions of Item 7(8)
of the Transitional Arrangements.
These provide that if the holder of
an old order mining right fails to lodge that right for conversion
before the expiry of the
five year period, that old order right
ceases to exist. Accordingly, even if SIOC had wrongly been granted
the entire mining right
in respect of all the properties and AMSA
still held an undivided share in the right to iron ore on the
properties, the effect
of AMSA’s failure to lodge, timeously,
its undivided 21.4 per cent share in the old order mining right in
respect of iron
ore on the Table I properties, was that that
undivided share ceased to exist.
[54] This necessarily had
the effect that there was no longer a potential limitation of SIOC’s
mining right (in terms of the
MPRDA) in respect of iron ore on the
Table I properties and obviously, if the undivided share in the old
order mining right in
respect of the Table I properties no longer
existed, neither that undivided share nor an undivided share in a
mining right in terms
of the MPRDA was available to the State to
allocate to any other party. In short, as a matter of law, SIOC
became, as from 30 April
2009, the sole holder of the mining right
(in terms of the MPRDA) in respect of iron ore on the Table I and
Table II properties.
Whatever reasons may have existed for setting
aside or amending SIOC’s mining right (in terms of the MPRDA)
in respect of
the Table I properties became irrelevant and SIOC was
correctly reflected in the documents as the sole and exclusive holder
of
the mining right in respect of iron ore on the Table I and Table
II properties. It will be remembered that the mining right into
which
SIOC’s old order right had been converted was executed on 11
November 2009, after AMSA’s old order right had
ceased to
exist. The appellants’ counsel were unable to deal
satisfactorily with the clear meaning and obvious consequences
of
Item 7(8) of the Transitional Arrangements. They referred to the new
mining dispensation and the clear import of the MPRDA that
the State
is now vested with all mineral and petroleum resources but that is no
answer to the clear provisions of Item 7(8).
[55] Accordingly, whether
or not SIOC’s old order mining right was correctly converted on
5 May 2008, SIOC, as a matter of
law, became the sole holder of the
mining right in terms of the MPRDA in respect of iron ore on the
Table I and Table II properties
when AMSA failed to convert its
undivided share in the old order mining right in respect of the Table
I properties before the five
year period expired on 30 April 2009.
Conclusion
[56] To summarise: the
answers to the three questions posed at the beginning of this
judgment are as follows:
First question:
On the facts, the effect
of the conversion of SIOC’s old order mining right on 5 May
2008 was that, on that day, SIOC became
the holder of the sole and
exclusive mining right in respect of iron ore on the Table I and
Table II properties.
Second question:
Prima facie the
conversion granted by the Minister on 5 May 2008 stands until amended
or set aside. Although it is doubtful whether
the conversion could be
amended or set aside at this stage, this is not an issue which it is
necessary to decide.
Third question:
As a matter of law, at
midnight on 30 April 2009, after AMSA failed to convert its undivided
share of the old order mining right
in respect of iron ore on the
Table I properties, SIOC became the sole holder of the mining right
in respect of those properties
as well as the Table II properties.
[57] It is found,
therefore, that, subject to the amendment of the date and the
formulation of order 1.1 so that it accords with
this judgment, the
court a quo correctly granted the declaratory orders and other relief
sought by AMSA and SIOC referred to earlier
in this judgment.
[58]
During the hearing it was common cause that the court a quo’s
order 1.4 (setting aside the Minister’s decision
to include
clause 8 in the terms and conditions of SIOC’s converted mining
right and declaring that clause
pro
non scripto
) was granted
without opposition and was not subject to attack in this appeal.
[59]
It remains to record that in their heads of argument, the State
appellants’ counsel contended that AMSA had no locus
standi to
seek the declaratory orders granted by the court a quo in paragraphs
1.1 and 1.2 of its order but at the hearing no argument
was presented
in support of this contention. It therefore requires no further
consideration.
21
[60]
The parties agree that costs must follow the result of the appeal and
cross-appeal and that where three counsel were employed
such costs
must include the costs of three counsel. Except for the State
appellants all the parties were represented by three or
more counsel.
[61] The following orders
are made:
1 The first, second,
third, fourth and fifth appellants’ appeals are dismissed with
costs, such costs to include the costs
of three counsel.
2 Subject to the
amendment of order 1.1 all the orders of the court a quo are
confirmed. Order 1.1 is replaced by the following
order:
‘
It is declared
that as a result of the first applicant’s (SIOC’s)
conversion of its ‘old order mining right’
in respect of
iron ore and quartzite on the Table I properties (the properties
described in Annexure “B” to SIOC’s
amended Notice
of Motion) in accordance with Item 7(3) of Schedule II to the Mineral
and Petroleum Resources Development Act 28
of 2002 (MPRDA) and the
second applicant’s failure to convert its old order right in
respect of iron ore and quartzite on
these properties, the first
applicant became, with effect from midnight on 30 April 2009, the
exclusive holder of a mining right
(SIOC’s converted mining
right) in respect of iron ore and quartzite on the Table I
properties.’
3 The first respondent’s
conditional cross-appeal is dismissed with costs, such costs to
include the costs of three counsel,
where employed.
________________________
B R SOUTHWOOD
ACTING JUDGE OF APPEAL
APPEARANCES
APPELLANTS: First to
fourth: W J Vermeulen SC (with him T Khatri)
The State Attorney,
Pretoria
The State Attorney,
Bloemfontein
Fifth: C E Puckrin SC
(with him C N van Heerden and E Wessels)
Mendelow-Jacobs
Attorneys, c/o Shapiro & Shapiro, Pretoria
Lovius Block,
Bloemfontein
RESPONDENTS: First: C D A
Loxton SC (with him M Antrobus SC and A W T Rowan)
Norton Rose South Africa,
c/o Edelstein Bosman, Pretoria
Webbers, Bloemfontein
Second:
M D Kuper SC (with him A Subel SC, S Symon SC and J L Gildenhuys)
Werksmans Attorneys, c/o
Brazington Shepperson & McConnell, Pretoria
Symington & De Kok,
Bloemfontein
1
There
are 21 properties and SIOC held the sole old order mining right in
respect of 13 of the properties while AMSA held the old
order mining
right, together with SIOC, in respect of only eight of the
properties.
2
During
the hearing, SIOC’s counsel associated his client with the
argument of AMSA’s counsel, save that he contended
that the
crucial time was 30 April 2009, when the time for AMSA to lodge its
old order mining right for conversion expired.
3
At
the commencement of the hearing before the court a quo, Mr Puckrin
SC on behalf of ICT, formally placed on record that his
client did
not intend to proceed with prospecting in accordance with its
prospecting right and that ICT waived any preference
to apply for a
mining right which arose out of the prospecting right. In any event,
ICT’s prospecting right lapsed on its
own terms in March 2012.
4
The
contentious properties are: the remaining extent of Portions 3 and 4
of the farm Gamagara; the remaining extent and the remaining
extent
of Portions 2 and 3 of the farm Sacha; the remaining extent of
Portion 1 of the farm Sims and the remaining extent and
Portion 1 of
the farm Sishen.
5
The
remaining 13 properties are: the remaining extent of the farm Sims;
Portion 3 of the farm Bishops Wood; the remaining extent
and the
remaining extent of Portion 1 of the farm Gamagara; the farm Kathu;
the farm Marsh; the remaining extent of the farm
Sekgame; the
remaining extent of the farm Lylyveld; Portions 1 and 5 from the
farm Fritz; the remaining extent of the farm Woon;
Portion 1 of the
farm Bruce and the remaining extent of Portion 1 of the farm Sacha.
6
‘
Prospecting’
means intentionally searching for any mineral by means of any method
which disturbs the surface or subsurface
of the earth. See the
definition in Section 1 of the MPRDA.
7
See
s 19(1)(b) of the MPRDA.
8
Van
Vuren v Registrar of Deeds
1907 TS 289
at 294, quoted with
approval in
Trojan Exploration Co (Pty) Ltd v Rustenburg Platinum
Mines Ltd
[1996] ZASCA 74
;
1996 (4) SA 499(A)
at 509G-H.
9
Trojan
Exploration
(supra) at 509G-590H.
10
Section
9 of the Minerals Act.
11
Section
20 of the Minerals Act.
12
Section
3(1) of the MPRDA.
13
Section
3(2) of the MPRDA.
14
Item
1 of Schedule II.
15
Item
2(a) of Schedule II. See also
M O Dale et al South African
Mineral and Petroleum Law
Schedule II: 27-34.
16
See
the requirements listed in s 23 of the MPRDA.
17
The
date of lodgment for both parties is contentious but for present
purposes need not be resolved.
18
Referred
to at the beginning of this judgment.
19
The
decision to grant the prospecting right was in contravention of
Section 10(2) of the MPRDA because SIOC’s objection
was not
referred to the Regional Mining Development and Environmental
Committee (REMDEC) to consider and advise the Minister.
20
This
appears clearly from Item 7(2), (3), (5) and (7) of the Transitional
Arrangements.
21
The
point does not appear to have been raised before the court a quo
which did not deal with it in its judgment.