Minister of Minerals and Energy v Agri South Africa (458/2011) [2012] ZASCA 93; 2012 (5) SA 1 (SCA); [2012] 3 All SA 266 (SCA); 2012 (9) BCLR 958 (SCA) (31 May 2012)

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[2012] ZASCA 93
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Minister of Minerals and Energy v Agri South Africa (458/2011) [2012] ZASCA 93; 2012 (5) SA 1 (SCA); [2012] 3 All SA 266 (SCA); 2012 (9) BCLR 958 (SCA) (31 May 2012)

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REPORTABLE
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no: 458/2011
In the matter between:
MINISTER OF MINERALS AND ENERGY
…..................................
Appellant
and
AGRI SOUTH AFRICA
…................................................................
Respondent
CENTRE FOR APPLIED LEGAL STUDIES
….........................
Amicus
Curiae
Neutral citation:
Minister of Minerals and
Energy v Agri SA (CALS amicus curiae )
(458/11)
[2012] ZASCA 93
(31 May 2012)
Coram:
NUGENT, HEHER, MHLANTLA, LEACH and
WALLIS JJA.
Heard
: 4 May 2012
Delivered
: 31 May 2012
Summary:
Expropriation of mineral rights –
Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) –
expropriation
of common law mining rights – are such rights
expropriated under the provisions of the MPRDA – entitlement to
compensation
in terms of item 12(1) of Schedule II to the MPRDA.
ORDER
On appeal from:
North Gauteng High Court,
Pretoria (Du Plessis J sitting as court of first instance).
The appeal is upheld with costs, such costs to include
those consequent upon the employment of two counsel.
The order of the court below is set aside and replaced
by the following order:
‘
(a) The plaintiff’s
claim is dismissed with costs, such costs to include those consequent
upon the employment of two counsel,
but excluding all costs incurred
in respect of or relating to the amendment referred to in paragraph
(b) below.
(b) The defendant is ordered to pay
the plaintiff’s wasted costs, including the costs consequent
upon the calling of witnesses
and the hearing of evidence, occasioned
by its application to amend its plea on 8 March 2011, such costs to
include those consequent
upon the employment of two counsel.’
JUDGMENT
WALLIS JA (HEHER and LEACH JJA concurring, NUGENT JA at
paragraph 102 and MHLANTLA JA concurring for different reasons.)
Introduction
[1] The transformation of the legal
landscape in regard to minerals and mining occasioned by the Minerals
and Petroleum Resources
Development Act 28 of 2002 (the MPRDA) has
been the subject of previous consideration and comment by this
court.
1
This is a test case aimed at
determining whether the MPRDA expropriated rights that existed prior
to its coming into force. The
protagonists are Agri South Africa
(Agri SA), which contends that it did, and the Minister of Minerals
and Energy (the Minister),
who contends that it did not. In adopting
that stance the Minister reflects the viewpoint of the government at
the time the MPRDA
was introduced in Parliament. However, that view
was not unchallenged.
2
Accordingly, had a court held that
the MPRDA expropriated all or some existing rights and no provision
was made for compensation,
there was a risk of the legislation being
held to be unconstitutional for non-compliance with the requirements
of s 25(2)(
b
)
of the Constitution, which requires that any expropriation be subject
to the payment of compensation. In order to ensure constitutional

compliance, whilst maintaining the stance that no expropriation was
involved, item 12(1) of Schedule II provides that:
‘
Any person who can prove that his or her
property has been expropriated in terms of any provision of this Act
may claim compensation
from the State.’
3
The government’s stance that
the MPRDA did not expropriate existing rights is reflected in the
requirement that a person contending
for an expropriation must prove
it. In that light, criticism that item 12(1) was drafted evasively
4
appears misplaced. There is nothing
amiss in government contending that the MPRDA did not expropriate
existing rights, but providing
that, if they are wrong, compensation
will be payable as required by the Constitution.
[2] The factual background to this
case is as follows. The MPRDA came into force on 1 May 2004. Prior to
that date Sebenza Mining
(Pty) Ltd (then called Bulgara Investment
Holdings (Pty) Ltd) had taken a notarial cession of the rights to
coal in, on, under
and in respect of two properties situated in
Mpumalanga (the coal rights). In 2006 the company, by then in
liquidation, lodged
a claim for compensation in terms of item 12(1)
contending that the MPRDA expropriated its coal rights. This claim
was rejected.
On 10 October 2006 it ceded its claim to Agri SA,
which acquired it for the purpose of bringing the present litigation.

In doing so it was acting in the broad interests of its members, who
took the view that, as a result of the changes effected by
the MPRDA,
they had lost valuable mining rights. Agri SA claimed compensation
for the alleged expropriation of the coal rights
in an amount of not
less than R750 000. The trial came before Du Plessis J, who
upheld the claim and awarded compensation
of R750 000. The
appeal and cross-appeal are with his leave. In the appeal the
Minister seeks to set aside the compensation
award in its entirety.
In the cross-appeal Agri SA seeks an increase in the compensation
awarded to R2 million. At the commencement
of the appeal the Centre
for Applied Legal Studies (CALS) sought and was granted leave to
intervene as
amicus
curiae
. Broadly
speaking it aligned itself with the stance of the Minister.
[3] Sebenza Mining’s rights were restricted to the
coal rights under a notarial cession of rights from the owners of the
properties
in question and the claim of which Agri SA has taken
cession is a claim for compensation in relation to those rights
alone.
However, counsel made it clear in argument that Agri SA does
not seek to distinguish these rights, or the position of Sebenza
Mining,
from any other mineral rights that previously existed or any
other holder of such rights. It does not distinguish between precious

metals and base metals, or between these and other forms of minerals,
such as sand, stone or clay, precious stones, other gemstones
and
mineral oils. Nor does it distinguish between used and unused rights
or between rights that were not separated from the land
to which they
related and rights that were so separated. To illustrate the breadth
of the argument it was argued that the MPRDA
effected an
expropriation of the rights enjoyed by giant mining houses just as
much as it had expropriated the unexploited mineral
rights of farmers
in rural areas. It was submitted that the only reason there had not
been more claims in respect of existing mining
operations was that
the holders had suffered no financial loss, because they had
converted their rights in terms of the transitional
provisions in the
Second Schedule to the MPRDA to rights in terms of the MPRDA.
[4] In view of this, the outcome of the appeal turns on
the answer to a single question. Did the MPRDA expropriate all
mineral rights
in South Africa? Under earlier legislation such rights
were held either by the owners of land or, where they had been
separated
from the land in respect of which the rights were to be
exercised, the holders of the separated rights. Although there were
differences
in the form and nature of these rights, depending on the
manner in which they had been constituted, they can for present
purposes
be referred to generically as mineral rights and the
beneficiaries of the rights as holders of mineral rights.
[5] The argument proceeded, and was upheld by the trial
court, on the basis of a comparison between the rights enjoyed by a
holder
of mineral rights in terms of the predecessor to the MPRDA,
the Minerals Act 50 of 1991 (the 1991 Act) and the position under the

MPRDA. The starting point was s 5(1) of the 1991 Act, which
reads as follows:
‘
Subject to the provisions of this Act, 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 …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.’
The leading commentary on the 1991
Act said that this restored to holders of mineral rights their common
law rights in relation
to prospecting for, mining, extracting and
disposing of minerals.
5
The argument adopts this terminology
and contends that the rights of holders of mineral rights under the
1991 Act were common law
rights that were destroyed by the MPRDA.
[6] Agri SA contended that these rights had in
substance, if not in the same form, become vested in the government
through its representative
the Minister. Whilst it was argued that an
expropriation might occur where the expropriated property is
ultimately to be placed
in the hands of a third party and not the
expropriator, Agri SA did not contend that mineral rights had
been expropriated
by being transferred to third parties. Its case was
that an expropriation was effected by the MPRDA on 1 May 2004,
when the
MPRDA came into operation and that the Minister had in
substance acquired the expropriated rights. It disavowed any reliance
on
the suggestion by the Minister and CALS, in their alternative
arguments, that the date of any expropriation would have been later

and would have diverged from case to case, because any expropriation
would only occur when existing miners or new entrants to the
industry
were awarded a prospecting right or a mining right or mining permit
under the MPRDA in place of the previous holder of
the mineral rights
to that property. We can confine ourselves therefore to a
consideration of the narrow proposition that the MPRDA
effected an
expropriation of all existing mining rights in South Africa on 1 May
2004.
[7] In its particulars of claim Agri SA said that the
expropriation was effected by s 5, read with ss 2, 3 and 4,
of the
MPRDA. In further particulars for trial it inverted this by
relying primarily on s 3 and only then and by way of supplement

on the other provisions. As the question is one of law this change is
of no great moment. The outcome of this litigation depends
upon broad
principles relating to the source and nature of mineral rights and
the construction of the relevant provisions of the
MPRDA in the
context of the statute as a whole and in the light of the
Constitution. The precise form in which the argument has
been couched
from time to time does not affect this.
[8] The relevant provisions of the MPRDA start with the
preamble where it is acknowledged that ‘South Africa’s
mineral
and petroleum resources belong to the nation and that the
State is the custodian thereof’. The relevant objects in s 2

are said to be to:
‘
(
a
)
recognise the internationally accepted right of the State to exercise
sovereignty over all the mineral and petroleum resources
within the
Republic;
(
b
) give effect to the principle of the State’s
custodianship of the nation’s mineral and petroleum resources;
(
c
) promote equitable access to the nation’s mineral and
petroleum resources to all the people of South Africa;
(
d
) to (
f
) …
(
g
)
provide for security of tenure in respect of prospecting,
exploration, mining and production operations.’
The
role of the State in this new dispensation is set out in s 3,
which provides that:
‘
(1)  Mineral
and petroleum resources are the common heritage of all the people of
South Africa and the State is the custodian
thereof for the benefit
of all South Africans.
(2)  As
the custodian of the nation’s mineral and petroleum resources,
the State, acting through the Minister, may—
(
a
)
grant, issue, refuse, control, administer and manage any
reconnaissance permission, prospecting right, permission to remove,
mining right, mining permit, retention permit, technical co-operation
permit, reconnaissance permit, exploration right and production

right; and
(
b
)
in consultation with the Minister of Finance, determine and levy, any
fee or consideration payable in terms of any relevant Act
of
Parliament.’
[9]
Section 5 deals with the nature and consequences of the rights
created under the MPRDA. It provides that:
‘
(1)  A
prospecting right, mining right, exploration right or production
right granted in terms of this Act is a limited
real right in respect
of the mineral or petroleum and the land to which such right relates.
(2)  The
holder of a prospecting right, mining right, exploration right or
production right is entitled to the rights
referred to in this
section and such other rights as may be granted to, acquired by or
conferred upon such holder under this Act
or any other law.
(3)  Subject
to this Act, any holder of a prospecting right, a mining right,
exploration right or production right may—
(
a
)
enter the land to which such right relates together with his or her
employees, and may bring onto that land any plant, machinery
or
equipment and build, construct or lay down any surface, underground
or under sea infrastructure which may be required for the
purposes of
prospecting, mining, exploration or production, as the case may be;
(
b
)
prospect, mine, explore or produce, as the case may be, for his or
her own account on or under that land for the mineral or petroleum

for which such right has been granted;
(
c
)
remove and dispose of any such mineral found during the course of
prospecting, mining, exploration or production, as the case
may be;
(
d
)
subject to the National Water Act, 1998 (Act No. 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
(
e
)
carry out any other activity incidental to prospecting, mining,
exploration or production operations, which activity does not

contravene the provisions of this Act.
(4)  No
person may prospect for or remove, mine, conduct technical
co-operation operations, reconnaissance operations,
explore for and
produce any mineral or petroleum or commence with any work incidental
thereto on any area without—
(
a
)
an approved environmental management programme or approved
environmental management plan, as the case may be;
(
b
)
a reconnaissance permission, prospecting right, permission to remove,
mining right, mining permit, retention permit, technical
co-operation
permit, reconnaissance permit, exploration right or production right,
as the case may be; and
(
c
)
notifying and consulting with the landowner or lawful occupier of the
land in question.’
[10] It is plain from these
provisions that anyone who wishes to prospect for or mine minerals in
South Africa may only do so in
terms of rights acquired and held
under the MPRDA. The rights of holders of mineral rights reflected in
s 5(1) of the 1991
Act have, as such, disappeared. Whilst those
who held such rights under the 1991 Act, and persons authorised by
them, were formerly
the only persons who could, subject to the 1991
Act, prospect and mine, and accordingly enjoyed exclusivity, that is
no longer
the case. They are free to compete with others for rights
under the MPRDA, but their status as holders of mineral rights,
recognised
in the past, is of no relevance to whether they will be
afforded such rights in the current dispensation. In addition, the
owners
of land, from which the mineral rights have not been
separated, can no longer prevent others from coming onto their land
for the
purpose of mining. All they have is a right under s 5(4)(c)
of the MPRDA
6
to be notified and consulted before
others, acting in terms of rights afforded to them by the Minister
under the MPRDA, come onto
their land to prospect or mine. There are
no longer any rights that can be put up for sale, used as security or
bequeathed to one’s
heirs. That broadly constitutes the
deprivation of which Agri SA complains.
[11] Against that background the appeal raises three
issues. They are:
What constitutes an expropriation in terms of s 25(2)
of the Constitution?
What were the rights enjoyed by holders of mineral
rights prior to the MPRDA coming into operation?
Were those rights expropriated in terms of the
provisions of the MPRDA?
If the last of these questions is answered in favour of
Agri SA then it follows that Sebenza Mining’s coal rights
were
expropriated and we must then consider the proper assessment of
the compensation due to it.
The meaning of ‘expropriation’
[12] The Constitution draws a
distinction between a deprivation of property and an expropriation.
7
A deprivation of property is only
constitutionally compliant if it occurs in terms of a law of general
application and is not arbitrary.
An expropriation is a special type
of deprivation. It must, like any other deprivation, take place in
terms of a law of general
application and not be arbitrary. In
addition it must be for a public purpose or in the public interest
and the expropriation must
be subject to the payment of compensation.
Agri SA contends that the MPRDA expropriated all pre-existing
mineral rights. It
did not contend that the MPRDA involved an
arbitrary deprivation of all or some of those rights. There would be
difficulties in
advancing such an argument in the light of the
constitutional imperatives of transformation and accessibility to
natural resources
to which CALS drew our attention. If we conclude
that the MPRDA did not expropriate pre-existing mineral rights the
appeal must
succeed.
[13] As item 12(1) was directed at
ensuring the constitutional compliance of the MPRDA if it
expropriated property, the ‘expropriation’
to which it
refers must be an expropriation as contemplated by s 25(2) of
the Constitution. In
Harksen
v Lane NO & others
8
Goldstone J said:
‘
[31] The word “expropriate” is
generally used in our law to describe the process whereby a public
authority takes property
(usually immovable) for a public purpose and
usually against payment of compensation. Whilst expropriation
constitutes a form of
deprivation of property, s 28 makes a
distinction between deprivation of rights in property, on the one
hand (ss (2)), and expropriation
of rights in property, on the other
(ss (3)). Section 28(2) states that no deprivation of rights in
property is permitted otherwise
than in accordance with a law.
Section 28(3) sets out further requirements which need to be met for
expropriation, namely that
the expropriation must be for a public
purpose and against payment of compensation.
[32] The distinction between expropriation (or
compulsory acquisition as it is called in some other foreign
jurisdictions) which
involves acquisition of rights in property by a
public authority for a public purpose and the deprivation of rights
in property
which fall short of compulsory acquisition has long been
recognised in our law. In
Beckenstrater
v Sand River Irrigation Board,
9
Trollip J said:
“
(T)he ordinary meaning of 'expropriate’'
is ‘to dispossess of ownership, to deprive of property’ …
but
in statutory provisions, like secs 60 and 94 of the Water Act, it
is generally used in a wider sense as meaning not only dispossession

or deprivation but also appropriation by the expropriator of the
particular right, and abatement or extinction, as the case may
be, of
any other existing right held by another which is inconsistent with
the appropriated right. That is the effect of cases
like
Stellenbosch
Divisional Council v Shapiro
1953
(3) SA 418
(C) at 422-3, 424;
SAR &
H v Registrar of Deeds
1919 NPD 66
;
Kent NO v SAR & H
1946 AD 398
at 405-6; and
Minister
van Waterwese v Mostert and Others
1964
(2) SA 656
(A) at 666-7.”’
[14] It has been suggested
10
that the Constitutional Court
departed from this approach in the
FNB
case.
11
The basis for that suggestion is that
in
FNB
the
court commenced by dealing with deprivation of property and whether
it was arbitrary, whilst in
Harksen
it dealt directly with expropriation.
It would be surprising to conclude that
FNB
departed from
Harksen
without
saying so expressly, given their proximity in time and that
Harksen
is
not even referred to in the judgment
in
FNB
.
What is more Ackerman J, who wrote
FNB
,
had concurred in
Harksen.
The differences in approach between
the two are readily ascribable to the fact that they were concerned
with different questions.
Harksen
dealt with a
contention that
s 21
of the
Insolvency Act 24 of 1936
, which
provides for the vesting of the property of one party to a marriage
in the trustee of their insolvent spouse, pending proof
by the
solvent spouse of ownership of the assets in question, constituted an
expropriation contrary to s 25(2) of the Constitution.
FNB
concerned whether
the provisions of s 114 of the Customs and Excise Act 91 of
1964, providing for a lien for payment of a customs
debt over all
goods, including those of third parties, on any premises in
possession or under control of the customs debtor, constituted
an
arbitrary deprivation of property.
12
Both judgments accept that
expropriation is a form
13
or subset
14
of deprivation. Accordingly, whether
a challenge is mounted under s 25(1) or s 25(2) the first
issue will be whether there
has been a deprivation of property. But
that does not necessarily mean that the court must consider whether
the particular deprivation
of property was arbitrary, when the only
point in issue in the case is whether an expropriation has occurred.
If the person contending
for an expropriation is content not to
allege that the deprivation is arbitrary, there is no reason for the
court to enquire into
that question. Its view on that would be
obiter
and it is a
salutary approach, if possible, in writing judgments to avoid
obiter
dicta.
Where the
issue is whether an expropriation has occurred, the important
question will be whether the deprivation reflects those

characteristics that serve to mark out an expropriation from other
types of deprivation of property.
15
In identifying those characteristics
FNB
said
merely that we must be circumspect in relying on pre-constitutional
jurisprudence
16
concerning expropriation, because it
may not necessarily be reliable in construing the property clause
under our present constitutional
dispensation.
17
[15] The MPRDA exhibits strong
regulatory features. Other jurisdictions have grappled with cases
dealing with the effect that regulatory
measures, such as planning
regulations, may have on existing property rights. This has resulted
in the development in some jurisdictions
of doctrines of constructive
expropriation or inverse condemnation. In
Steinberg
v South Peninsula Municipality
18
this court left open the question
whether there is room within our constitutional framework for the
development of a concept of
constructive expropriation. In
Reflect-All 1025 CC
& others v MEC for Public Transport, Roads and Works, Gauteng
Provincial Government, & another
19
Nkabinde J likewise left the question
open, saying only that she was uncertain whether it was an
appropriate doctrine in the South
African context and that it gives
rise to debatable questions. We have not been asked to develop such a
doctrine in the present
case. Agri SA contends that the MPRDA
effects a direct expropriation of
previously
existing mineral rights by taking those rights from existing rights
holders and vesting their substance in the Minister.
It is
accordingly unnecessary to address this complex question. It is also
unnecessary to address an issue raised by Professor
van der Walt
20
whether an expropriation can be
effected by statute in South Africa. No-one suggested that it could
not be effected in this way.
[16] The primary contention of the
Minister and CALS is that the MPRDA did not effect a general
expropriation of existing mineral
rights because the State did not
acquire any rights in consequence of the MPRDA coming into operation.
They accepted, although
the correctness of this acceptance will be
revisited later in the judgment, that there was a deprivation of
property because all
mineral rights under the 1991 Act were
extinguished by the MPRDA. However, they say that those rights have
not been acquired by
the State and, as this is a necessary
characteristic of an expropriation that is fatal to Agri SA’s
claim. Reliance is placed
upon the quoted passage from
Harksen
and the
Reflect-All
judgment, in which
the contention that there had been an expropriation of property,
effected by the long-standing designation of
portions of the
appellants’ properties for road purposes, was rejected because
there had been no acquisition of the land
affected by the
designation. The relevant passage from that judgment reads as
follows:
‘
[64] The applicants argued that s 10(3) is
inconsistent with the constitutional guarantee against uncompensated
expropriation of
property. I do not agree. Although it is trite that
the Constitution and its attendant reform legislation must be
interpreted purposively,
courts should
be cautious not to extend the meaning of expropriation to situations
where the deprivation does not have the effect
of the property being
acquired by the State.
21
It must be emphasised that s 10(3) does
not transfer rights to the State
. What
it does is this: it deprives the landowner of rights to exploit the
affected part of the land within the road reserve and
thus protects
part of the planning process which has economic value and is in the
long run in the public interest. Remarkably,
while the applicants
accepted the distinction drawn by the court in
Harksen
,
they nevertheless contended that s 10(3), read with ss 8 and 9 of the
Infrastructure Act, enables the State to “acquire”
land
for the construction of public roads. As I have said, the State has
not acquired the applicants' land as envisaged in ss 25(2)
and
25(3) of the Constitution. For that reason, no compensation need be
paid.’ (
Emphasis added.
)
[17] Agri SA counters this argument in the following
way. It contends that expropriation is an original, not a derivative
form of
acquisition of ownership. It does not involve a transfer from
the expropriatee to the expropriator, but the extinguishing of the

expropriatee’s title or right and the acquisition by the
expropriator, or possibly a third party through the expropriator,
of
a new right, equivalent or similar, but not necessarily identical, to
that previously enjoyed by the expropriatee. Accordingly,
so it is
argued, the issue of expropriation in this case cannot be determined
by asking whether, in consequence of the MPRDA, the
State has
acquired the mineral rights that existed under the old dispensation.
As those rights have been extinguished the answer
to that question
must necessarily be in the negative. Instead, it is contended that
the proper question is whether the scheme for
the regulation of
mining in South Africa, contained in sections 2 to 5 of the MPRDA,
vested in the State the substantive content
of those rights,
transferring the right to prospect, mine for and dispose of extracted
minerals from the holders of mineral rights
to the Minister. Agri SA
says that the MPRDA divested owners of existing mining rights and
granted ‘a corresponding
power, right or advantage to the
expropriator in order to grant a similar right to a third party’
and that this amounted
to an expropriation. It contends that the
court must look behind the appearance of the exercise of a regulatory
power to the underlying
reality that as a result of the MPRDA the
rights enjoyed by holders of mining rights prior to the MPRDA have
been extinguished
and are now exercisable by the Minister and those
to whom rights are granted under the MPRDA.
[18] Both arguments proceed on the
footing that one of the identifying characteristics of an
expropriation is that the expropriator
acquires property (in its
constitutional sense) either for itself or for others, whether
directly or indirectly, that bears some
resemblance to the property
that was the subject of the expropriation. That is consistent with
the decision in
Harksen
and is in my view
correct. I find unconvincing the suggestion by Professor van der
Walt
22
that, in terms of the Constitution,
the characteristic that distinguishes an expropriation from other
forms of deprivation is compensation.
That puts the cart of
compensation before the horse of expropriation. The need to identify
whether a particular act constitutes
an expropriation will arise in
two circumstances. The first is where the validity of a law or some
executive or administrative
action is challenged on the ground that
it involves an expropriation but does not provide for the payment of
compensation, thereby
infringing s 25(2) of the Constitution.
The second is where, as in this case, there is provision for the
payment of compensation
if a law or action constitutes an
expropriation, but there is a dispute whether the particular law or
action involves an expropriation.
In either event the presence or
absence of a provision for compensation cannot be determinative of
whether there is an expropriation.
If one looks as the structure of
s 25(2) of the Constitution it is more appropriate to view
compensation as a pre-requisite
for a lawful expropriation and a
necessary consequence of an expropriation, rather than as a defining
characteristic serving to
distinguish expropriations from other forms
of deprivation. The absence of an obligation to pay compensation is
necessarily neutral,
whilst its presence can never be more than a
factor that may point to an expropriation.
[19] Accepting that one of the
hallmarks of expropriation is that the expropriator or others through
it acquire property, Agri SA
says that what is acquired need not be
the same or substantially the same as what has been taken. For
obvious reasons this is a
contention that can only be advanced when
the subject of the alleged expropriation is incorporeal property.
Even in that context
there is room for considerable debate whether
the argument is correct. In
Minister
van Waterwese v Mostert & andere
23
it was said that the person who
expropriates only acquires, by means of the expropriation, the rights
that have been expropriated.
24
Reference is made by counsel for Agri
SA to a passage from the judgment of van Winsen J in
Stellenbosch
Divisional Council v Shapiro
,
25
where it was said that if property
burdened by a
fideicommissum
is expropriated the burden falls away
with the expropriation. However, it is by no means clear that this
supports the principle
for which counsel contends. The case
26
van Winsen J relied on for this
observation, involved a dispute over the entitlement of the local
authority to expropriate immovable
property burdened by a
fideicommissum
where
the ultimate beneficiaries of the
fideicommissum
were not yet in
existence. The court decided that expropriation was permissible on
the basis that the
fideicommissum
remained in existence after
expropriation but burdened the compensation rather than the
property.
27
It is not authority for the
proposition that what is acquired by expropriation can be greater
than what was taken, nor is it authority
for the proposition that
what is acquired can be different from what was taken.
[20] There is support for the
contentions of the Minister in four cases, two from Zimbabwe
28
and two judgments of the Privy
Council on appeal from Malaysia
29
and Mauritius
30
respectively. In each the claim for
compensation failed on the basis that, whilst the rights of the
claimants had either been extinguished
or significantly diminished
and the government in each case had significantly extended its rights
and powers, the claimants had
failed to show that any rights
previously possessed by them had been acquired by the government.
That strict approach to the concept
of an acquisition flowing from an
expropriation supports the contention by the Minister and CALS.
[21] However there is a different
line of cases reflecting a different approach to this problem. In
Australia in
Mutual
Pools & Staff Pty Ltd v The Commonwealth
31
Deane and Gaudron JJ said:
‘
The extinguishment, modification or
deprivation of rights in relation to property does not of itself
constitute an acquisition of
property … For there to be an
“acquisition of property”, there must be an obtaining of
at least some identifiable
benefit or advantage relating to the
ownership or use of property. On the other hand, it is possible to
envisage circumstances
in which an extinguishment, modification or
deprivation of the proprietary rights of one person would involve an
acquisition of
property by another by reason of some identifiable and
measurable countervailing benefit or advantage accruing to that other
person
as a result.’
In
Georgiadis
v Australian and Overseas Telecommunications Corporation
32
it was held that there is no reason
why what is acquired should correspond precisely to what has been
taken. A case that illustrates
this possibility is the Canadian case
of
Manitoba
Fisheries Ltd v The Queen
,
33
where a commercial monopoly in
relation to the export of freshwater fish from Canada was granted to
a statutorily created Crown
corporation, which could in turn grant
licences to private businesses. The claimant had not been granted
such a licence and as
a result its existing profitable business could
no longer be pursued. Whilst provision was made for provinces to
compensate businesses
for their redundant plant and equipment
Manitoba had not done so. The Supreme Court of Canada held that the
effect of creating
the statutory monopoly was that the Crown
corporation acquired the goodwill of the claimant’s existing
business and had thereby
‘taken’ its business. A similar
conclusion was reached in the case of
Ulster
Transport Authority v James Brown & Sons Ltd
,
34
namely that the repeal of a statutory
exemption which had allowed the company to trade in competition with
a government established
board providing the same services, was ‘a
device for diverting a definite part of the business of furniture
removers and
storage from the respondents and others to the
appellant’ and was intended ‘to enable the appellants to
capture the
… business’.
[22] Lastly, in this survey of the
problems that arise in determining whether an expropriation has
resulted in an acquisition of
property by the expropriating
authority, there is the Australian case of
Newcrest
Mining (WA) Ltd & another v The Commonwealth of Australia &
another
.
35
It is a case that may have a
particular resonance in the present one in that it involved rights
conferred by the Commonwealth, all
rights to minerals having been
reserved to the Crown, under mining leases with commercial entities.
The areas covered by the leases
were then incorporated into a world
heritage site, the Kakadu National Park, where there was a statutory
prohibition on the recovery
of minerals. There was also an express
statutory provision that provided that no compensation would be
payable if rights were lost
in consequence of the incorporation of
property into a conservation area, such as Kakadu. This rendered the
rights under the mineral
leases valueless because they could not be
exploited. The majority of the court held that there was an
acquisition by the Commonwealth
because the effect of the
sterilisation of the lessee’s rights was to enhance the value
of the government’s holdings.
However, in dissent McHugh J
pointed out that the Commonwealth gained nothing thereby. It was not
enabled to exploit the minerals
and had the prohibition been lifted
the claimant could have exploited them under the mineral leases. He
accordingly held that there
was no acquisition.
[23] These are complex and difficult
questions. The approach that requires almost complete correspondence
between what is taken
from the expropriatee and the benefit or
advantage accruing to the expropriator appears simple, but it ignores
the reality that
deprivations of property can take a variety of
forms
36
and be effected in various different
ways. The resultant advantage to the authority that effects the
deprivation may also take a
variety of forms. An unduly literal
concept of acquisition flowing from a deprivation may mean that the
concept of expropriation
is too narrow and fails to afford the
protection to property rights that s 25(2) is designed to
afford. A broader and more
generous concept of acquisition may also
go some way towards addressing the problems that caused this court in
Steinberg
to
pose the question whether there is scope under the Constitution for a
concept of constructive expropriation. On the other hand
an overly
generous approach to the notion of acquisition runs the risk of
reducing it to something akin to the peppercorn that
in the English
common law system suffices to provide the requisite consideration for
a binding contract. That would blur the distinction
our Constitution
draws between expropriations and other forms of deprivation of
property. It may also create barriers to the constitutionally

mandated process of transformation in regard particularly to access
to land and natural resources, where s 25 has sought to
strike a
careful balance between existing property rights and the achievement
of transformation.
[24] In view of these difficulties it is undesirable to
adopt a categorical approach to understanding what constitutes
acquisition
for the purposes of expropriation. I accept that
acquisition by or through the expropriating authority is a
characteristic of an
expropriation in terms of s 25(2). However,
it is preferable to determine what constitutes an acquisition for the
purpose
of identifying an expropriation on a case by case basis
having regard to the particular form that any alleged expropriation
takes,
the nature of the property alleged to have been expropriated
and the content of the rights allegedly acquired by the expropriator.

This is of particular importance when one is dealing with an alleged
expropriation of incorporeal property, effected by way of
changes
made in a regulatory environment. In that situation it will be as
important to examine the substance of the right as its
source,
especially where there is a need for continuity of operations in the
industry under consideration and the changes include
transitional
measures. That in turn may affect whether there has been a
deprivation or the nature of any deprivation. In order
to decide both
the question of deprivation and the question of acquisition in the
present case it is accordingly first necessary
to consider the nature
of the mineral rights that Agri SA says have been expropriated.
The nature of mineral rights
[25]
In accordance with long-standing usage mineral rights are referred to
as common law rights. Indeed they are so described in
a leading
judgment of this court in
Trojan Exploration
Co (Pty) Ltd v Rustenburg Platinum Mines Ltd & others
,
37
where the court was faced with a conflict between two
rights holders, the one holding the right to mine precious metals
over the
property and the other the right to mine all other minerals.
They were so described, without further analysis, in the
trial court’s judgment and in the arguments of counsel both in
that
court and in this court. However, it is instructive to examine
more closely and in its entirety the relevant passage from the
judgment
of Schutz JA, which, notwithstanding the division of views
as to the outcome of the case, was accepted by all his colleagues. It

reads:
‘
A brief account of the genesis of the
various rights, their nature and subsequent fate, is needed because
of certain arguments which
will be considered later. Prior to 1925
the Transvaal Land Co Ltd owned Umkoanesstad, its surface and what
was beneath it, in all
the fullness that the common law allows,
although even by then for about half a century there had been
legislation which could
affect its rights if payable minerals were
present. In that year Willem Remmers acquired the farm, but
simultaneously the mineral
rights were separated and retained by
Transvaal Land Co Ltd by means of a reservation in the transfer deed
and the registration
of a certificate of mineral rights in its
favour. Those rights were defined as “all the mineral rights
and all minerals,
oil, precious stones, precious or base minerals”.
Such a separate registration of mineral rights had come to be
recognised
in the Transvaal long before 1925: see
Houtpoort
Mining and Estate Syndicate Ltd v Jacobs
1904 TS 105
at 110; also
Nolte
v Johannesburg Consolidated Investment Co Ltd
1943 AD 295
at 315.
Indeed an entire structure of mineral and mining law had been evolved
in South Africa both by the Courts and various legislatures.
The need
for such development arose out of the lack of such laws in the
Roman-Dutch system. …
The nature of rights to minerals which had been
separated from the ownership of the land, as they had developed in
South Africa,
was described by Innes CJ in
Van
Vuren and Others v Registrar of Deeds
1907
TS 289
at 294 as being the entitlement “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”. As these rights
could not be fitted into the traditional classification of
servitudes
with exactness - they were not praedial as they were in favour of a
person, not a dominant property - they were not
personal as they were
freely transferable - they had to be given another name, and the
Chief Justice dubbed them
quasi
-servitudes,
a label that has stuck. They are real rights. Their exercise may
conflict with the interests of the landowner. In a
case of
irreconcilable conflict the interests of the latter are subordinated,
for if it were otherwise the grant of mineral rights
might be
deprived of content: see eg
Nolte
's
case supra at 315:
Hudson v Mann and
Another
1950 (4) SA 485
(T) at 488E-F.
For so long as minerals remain in the ground they continue to be the
property of the landowner: only when the holder
of the right to
minerals severs them do they become movables owned by him:
Van
Vuren
's case supra at 295. Those are
the main established common-law principles that are relevant.’
38
[26] From this we see that what have come to be referred
to as common law rights emerged from the combined work of the courts
and
various legislatures over the many years in which mining has been
a significant activity in South Africa. As Schutz JA expressed
it ‘an
entire structure of mineral and mining law had been evolved in South
Africa both by the Courts and various legislatures’.
That
accords with the view of Lord Sumner in the Privy Council in
Union
of South Africa (Minister of Railways and Harbours) v Simmer and Jack
Proprietary Mines Ltd
,
39
where in dealing with the nature of mynpacht rights he said:
‘
Mynpacht rights are sui
generis and are the creature of statutes, which have conferred on the
State the right to dispose of precious
metals and invest the State’s
grantees with the right to win and get them, the ownership right of
the dominium notwithstanding.’
It has been convenient down the years to describe the
system of mining law as giving rise to common law mineral rights, but
that
nomenclature was probably adopted because of the role the courts
played in characterising such rights. Hitherto it has been
unnecessary
to explore the underpinnings of the system and untangle
its roots with a view to discerning the source and nature of these
rights
and whether they are in fact derived from the common law. That
exercise must be undertaken in the present case because it is those

rights that Agri SA contends were expropriated by the MPRDA.
[27] Section 5(1) of the 1991 Act, which provides
the foundation for the argument on behalf of Agri SA, conferred the
right
to enter upon the land, to prospect and mine for minerals and
to dispose of those that were extracted upon holders of mineral
rights.
These are collectively referred to as the right to mine. A
number of subsidiary rights or entitlements flow from the right to
mine,
particularly as between prospectors and miners on the one hand
and property owners on the other. Together with the right to mine

they constitute what were referred to as common law mineral rights.
The holders of mineral rights could deal with them by, for
example,
selling them or bequeathing them to an heir, or could sterilise them
by debarring others from coming upon the land to
engage in
prospecting or mining activities. The latter could be important to a
farmer who wished to prevent any disruption of the
surface of the
land in order to pursue farming activities without interference.
There is land that is valuable farming land under
which rich mineral
deposits are to be found. Where the owner held the mineral rights
they were able to determine whether farming
or mining would take
place.
[28] The concept of mineral rights is founded on the
right to mine. Does the right to mine have its source in the common
law as
Agri SA claims? In order to answer this question it is
necessary to delve into the history of our mining law and the
evolution
of mineral rights. In undertaking that task it is right
that I confess my debt in particular to Professor M O Dale

and his doctoral thesis
An Historical and Comparative Study of the
Concept and Acquisition of Mineral Rights
(hereafter Dale) and
Dr L V Kaplan’s thesis
The development of
various aspects of the gold mining laws in South Africa from 1871
until 1967
(hereafter Kaplan)
.
40
Much of what follows is derived from these sources and from a
consideration of the statutes to which they refer.
41
For reasons that will emerge the consideration of these issues will
be divided into different periods.
The common law
[29] Whilst there is little writing in Roman Law on the
topic of mineral rights Professor Dale says
42
that there was a clear tendency to move away from unrestricted
ownership of minerals to a restricted ownership of land on which

minerals were found. This was linked to an appropriation by the State
of the authority to determine who would enjoy the right to
mine,
initially in respect of public land and then in relation to private
land. He notes that:
‘
This restriction of the
landowner’s full dominium in favour of freedom to mine, is a
tendency which, while founded in Rome,
is discernible in almost all
legal systems, and is possibly attributable to the fact that the
mining industry is generally of such
national importance that it is
allowed to take precedence over the interests of the individual
landowner.’
In Roman times various devices were used by the State to
exercise authority over the right to mine. These included permits and
authorisations
and the requirement to pay royalties in return for the
grant of a right to mine. In devising this system whilst ‘the
right
to mine … was strictly under State Control’ the
interests of the State, the miner and the landowner were balanced and

protected. This approach was not unique to the Romans. His conclusion
is that:
‘
The development in Roman Law
from private ownership of the right to mine on one’s own land,
to the control of the mining industry
and the right to mine by the
State, is one which is not singular to the Romans, but is traceable
in the systems of most countries.’
43
[30] That view is shared by Professor Barton, who
testified on behalf of the Minister. He pointed out that absolute
private ownership
of minerals, carrying with it a right to exploit
those minerals is rare. According to him, and this does not appear to
have been
disputed, there are two major variations. Under the one
(the Dominial system) the State is said to own the minerals
irrespective
of ownership of the land on or under which they are
found. Under the other (the Regalian or royalty system) the State
controls
the minerals and allocates the right to mine in return for
the payment of royalties. Sometimes this is justified on the
hypothesis
that the minerals are not in private ownership at all but
are owned by ‘the people’ collectively. There are echoes
of this notion in the preamble to the MPRDA where it states that
South Africa’s mineral and petroleum resources ‘belong
to
the nation’ and that the State is the custodian thereof.
[31] As Schutz JA pointed out there is little of use in
the Roman Dutch writers concerning mining and mineral rights because
the
Dutch countries were not places where much mining occurred.
Interestingly, however, Voet 41.1.13
44
says in regard to Holland’s overseas possessions that the right
to all minerals and precious stones was vested in the Dutch
East
India Company by a law of the Estates-General. This appears to
reflect in some measure the principle of the State exercising
control
over the right to mine.
45
[32] The common law principle is that the rights of the
owner of immovable property extend up to the heavens and down to the
centre
of the earth. This is expressed in the maxim
cuius est
solum eius usque ad caelum et ad inferos
, usually abbreviated in
academic writing to the
cuius est solum
principle. Its origins
are obscure as it is not to be found in the
Digest
or
elsewhere in the
Corpus Iuris Civilis
, but emerges in the
writing of the Glossator, Accursius, in the thirteenth century. It is
not a principle unique to the civil law
tradition but is also
applicable, with some qualification in the light of modern
conditions, under the English common law.
46
The principle continues to be recognised in our law today,
47
although we have not had occasion to consider some of the
difficulties in giving it unrestricted application in modern
conditions.
Its application leads to the conclusion that the minerals
in the soil under the surface of immovable property are owned by, or,

to use the Latin expression, part of the
dominium
vested in,
the owner of the property.
48
Unlike the English law, where separate ownership of strata of the
soil under the surface is possible, such separation was never

recognised in Roman Dutch law,
49
so that there could not be a separate ownership of minerals before
their extraction from the soil.
[33] In general the owners of property are free to do
with it what they wish. That is the foundation for the view that as a
matter
of common law the right to mine vests in the owner of the
land. Professor Badenhorst identifies the entitlement to exploit the
minerals in, on and under the land as being one of the entitlements
arising from ownership of land.
50
Flowing from that entitlement, owners could permit others to prospect
or mine on their land, but that was in terms of personal
contracts,
not giving rise to real rights. From the early days of mining in
South Africa contracts were concluded in terms of which
the right to
‘prospect, dig, quarry and exploit for, work, win, take out and
carry away, and for his own account to sell
and dispose of minerals,
metals or precious stones’ was conferred by landowners upon
those who wished to prospect or mine.
51
This required ‘a progressive development of the law keeping
place with modern requirements’.
52
[34] The endeavour to accommodate the demands of mining
within the framework of contract and the common law gave rise to
considerable
difficulties. Thus, for example, although these
contracts were commonly, including in legislation, referred to as
leases of mineral
rights, the appropriateness of this nomenclature
was questionable as they lacked the hallmarks of a contract of
locatio conductio
.
53
Another problem was the nature of the rights afforded by such
contracts. Personal rights, unlike real rights, cannot be asserted

against the world and this affected the security afforded by such
contracts. That was important because, from an early stage it
became
apparent that substantial investment was needed to develop mines.
Such investment would not be forthcoming if, for example,
the
insolvency of the landowner could destroy the rights on the basis of
which that investment had been made. The lack of separate
ownership
of the minerals themselves gave rise to difficulties in transferring
them.
54
None of these problems could be resolved until the right to mine
could be separated from the dominium of the land itself. That

occurred in the following stage of development.
The pre-Union legislation
[35] As is well known diamonds were discovered in South
Africa in 1867. In 1871 the Kimberley pipes were discovered and in
1880,
after some uncertainty, Griqualand West was annexed to the Cape
Colony. In the South African Republic (to which I will for
convenience
refer as the Transvaal) there were initial gold rushes in
Pilgrim’s Rest and Barberton. The main Witwatersrand gold
bearing
reef was discovered on Langlaagte farm in 1886, leading to
the Witwatersrand gold rush and the development of the gold mining
industry,
in which many of the leading industrialists from the
Kimberley diamond mines played a leading role. The first major
attempt to
explore for coal occurred in 1881 in the Dundee area of
the Colony of Natal. This lead to the establishment of mines in that
area
and by 1903 more than half a million tons of coal was being
produced by collieries in Dundee and surrounding areas. Mining
accordingly
became a significant part of the economic life of the
Cape, Transvaal and Natal and this resulted in legislation.
[36] In the Cape Colony, save to an insignificant
extent, all rights to precious stones, gold and silver were reserved
to the Crown
in terms of s 4 of Sir John Cradock’s
Proclamation on Conversion of Loan Places to Quitrent Tenure dated
6 August
1813.
‘
Government reserves no other
rights but those on mines of precious stones, gold, or silver; as
also the right of making and repairing
public roads, and raising
materials for that purpose on the premises: Other mines of iron,
lead, copper, tin, coal, slate or limestone
belong to the
proprietor.’
When Namaqualand was incorporated into the colony
provision was made by statute
55
for the leasing and working of mineral lands in return for payment of
rent and a royalty. In 1883, shortly after the annexation
of
Griqualand West, a comprehensive statute, the Precious Stones and
Minerals Mining Act,
56
was passed. It provided for the taking out of prospecting licences
for precious stones, gold, silver and platinum on Crown land
or land
where the right to those precious stones and minerals was reserved.
In the latter case the consent of the owner of the
land was not
required. Discoveries had to be declared and this could then lead to
the area being proclaimed as a mine or alluvial
digging always under
government control. Royalties were payable on the gross return from
mining. On private land not subject to
a reservation of rights the
owner could allow prospecting or the extraction of minerals or
precious stones, but, if the number
of claims exceeded a stipulated
maximum, the area could be proclaimed. Whilst in that event the owner
would fix the amount of the
royalty, 10 per cent would be payable to
the government. In later years amendments were made to provide for
compulsory prospecting
57
and the rights of owners of land were varied. Lastly two new and
consolidated pieces of legislation were passed in 1898
58
and 1899
59
in relation to precious metals and precious stones. The provisions of
both were similar. Prospecting licences could be obtained
for both
Crown and private land, in the latter case with the consent of the
owner, and on discovery provision was made for proclamation
with some
protection for owners. In 1907 similar regulation of prospecting for
and mining of most base minerals was enacted,
60
whereby prospecting licences were issued for prospecting on Crown
land and if minerals were discovered a mineral lease would be
awarded
subject to the payment of both rental and royalties.
[37] In the Transvaal a Volksraad resolution of 1858
resolved that the owners of land where minerals were found would be
bound to
sell or lease the land to the government. Ordinance 5 of
1866 provided for the exploitation and smelting of ores and the
payment
of a royalty to government in respect of the proceeds. In
1871 the first of a series of laws known generally as the Gold Laws
and
bearing the long title:
‘
Regelende de ontdekking, het
beheer en bestuur van de velden waarop edelgesteenten en edele
metalen in dezen Staat gevonden word’
61
was passed.
62
It provided that:
‘
het mijnregt op alle
edelgesteenten en edele metalen behoort aan de Staat.’
63
Discoveries of precious stones or precious metals had to
be reported after which the government would exercise control over
the
proclamation of diggings and the activities of mining. Licences
were required by anyone wishing to dig for precious stones or
precious
metals. As Professor Dale describes it:
‘
The essence of the law was
therefore the reservation of the right to mine to the State, State
control of diggings including private
land, and the payment of
licence moneys.’
The first Gold Law was followed by a succession of laws
all of which conformed in essence to the same pattern, whilst
building upon
their predecessors and adapting to new conditions.
64
They all sought to strike a balance between the interests of the
State and those of the diggers and landowners.
65
The State needed the revenues that mining would generate and
accordingly needed to encourage the introduction of capital and
mining,
whilst the majority of citizens (as opposed to
uitlanders
,
as the foreign miners were termed) were farmers, whose farming
activities and lives were disrupted by mining and who resented
other
people becoming rich on the product of their land. As part of this
balance provision was made in the 1875 law for payments
to be made to
surface owners and for the owners to have some control over
prospecting on their own land.
[38] The 1883 law went further than its predecessors in
providing that:
‘
Het eigendom in en mijnregt op
alle edelgesteenten en edelmetalen behoort aan den Staat.’
In other words the State would now claim ownership of
precious stones and precious metals as well as the right to mine
them. This
was a departure from the
cuius est solum
principle
as it contemplated ownership of the minerals separately from the soil
in which they were to be found. More importantly
it highlighted the
view of the Transvaal that power over these minerals vested in the
State rather than the owners of private property.
Owners were
afforded some preference by giving them a concession to dig for gold
on approved terms but that was all.
[39] In the same year a fundamentally important
development occurred in a law not primarily directed at mining and
minerals, but
at transfer duties. It was Law 7 of 1883
66
which provided in article 14 that:
‘
Geen afstand van regt op
mineralen aanwezig te zijn of werkelijk aanwezig op eenige plaats,
zal wettig wezen zonder dat daaroover
eene notarieele acte is
opgemaakt en behoorlijk geregistreerd ten kantore van der
Registrateur van Akte.’
67
By s 23 of Law 8 of 1885 the requirement of
notarial execution and registration was extended to mynpachten. Innes
CJ dealt
with the earlier provision in
Jolly v Herman’s
Executors
68
in the following terms:
‘
At the date when the agreement
now sued upon was entered into, the law as to the registration of
mineral contracts was contained
in Law No. 7 of 1883 and in Volksraad
Besluit No. 1422 of the 12th August, 1886. By sec. 14 of the statute
it was enacted that
no grant of rights to minerals on any farm should
be lawful unless embodied in a notarial deed and duly registered in
the office
of the Registrar of Deeds. Those provisions are strong and
clear; … In view of the magnitude of the interests affected by

mineral grants in this country, and of the desirability of publicly
recording such grants, so that all persons concerned might
know them,
it seems to me that the policy of the legislature was quite as much
to register these transactions as to tax them. However
that may be,
the Volksraad did not long rest content with the wording of the
section above referred to. By Besluit No. 1422 of
the 12th August,
1886, that body resolved that all contracts concerning the cession of
rights to minerals or about rights to mine
(
omtrent
afstand van regten op mineralen of omtrent regten om te delven
)
which did not conform to the provisions of the first paragraph of
sec. 14 of Law No. 7 of 1883 should be
ab
initio
void,
and no one should have any action whatever on such agreements. It is
impossible after this lapse of time to say what case
occurred, or
what facts came to the notice of the Raad between 1883 and 1886 which
led to this Besluit. But whatever the reason
may have been which
induced the legislature to take action, the effect of the action
which they did take was unmistakable.
The policy embodied in the Law of 1883 was
further extended, and in two directions. It was made to apply to
contracts which had
not been covered by the statute, and the result
of non-compliance with the statutory direction was expressed in
language still
stronger and more unmistakable than had been used
before. The Law dealt only with grants to mineral rights; the Besluit
extended
the provisions of the Law to all agreements connected with
such grants or with rights to mine. The Law declared that
non-notarial
or unregistered contracts were unlawful; the Besluit
directed that they should be considered void
ab
initio
, and should confer no rights of action
of any kind whatever.’
[40] In 1884 the focus shifted briefly from gold to coal
when, by Volksraad resolution of 10 November 1884, the government was
authorised
to grant licences for the working of coal mines on
government owned land. This was the first time that some control was
taken of
the mineral rights in respect of base metals, perhaps as a
result of similar explorations in the Transvaal, which then included

Vryheid, Utrecht and Paulpietersburg, to those being undertaken in
Natal. Another Volksraad resolution in 1889 resolved that the

government submit a law on base metals to the Volksraad during the
next session. That was done by way of Law 10 of 1891, which
provided,
in a chapter intended to make provisional regulation in respect of
base metals, for licences to mine base metals on proclaimed
land. The
chief feature of this appears to have been that if the licence holder
discovered precious metals or precious stones they
would receive a
preference in being enabled to work their discovery.
[41] The 1885 law reverted to the original position in
1871, namely that:
‘
Het mijn-en beschikkiingsregt
op alle edelgesteenten en edelmetalen behoort aan den Staat.’
Private owners were permitted to prospect on their own
land and to permit others to do so, but the government became
entitled to
appoint a state mineralogist to conduct a survey, no
doubt with a view to identifying viable mineral deposits. The system
of proclamation
of diggings was maintained and some preference was
afforded to the discoverer of minerals and the owner. The law
clarified that
by precious metals gold was meant. Silver was added in
1887. A consolidating law was passed in 1892, which required stone
makers,
rock quarries and chalk burners to obtain licences for these
activities on proclaimed land.
[42] In 1895 the Transvaal enacted its first
comprehensive law dealing with base metals and minerals in the form
of the Base Metals
and Minerals Law 17 of 1895, which provided in s 1
that:
‘
Het eigendomsrecht van en het
beschikkingsrecht oor onedele metalen en mineralen, zoowel op
geproclameerde als ongeproclameerde
gronden, behoort aan den eigenaar
van den grond.’
69
Whilst the entitlement to engage in prospecting and
mining for base metals was held by or was within the gift of the
owner, a royalty
would be payable to the State. On government land
licences were required and a royalty was also payable. The law was
replaced in
1897
70
but without major change. Then in 1898 precious stones were separated
from gold, silver and quicksilver in two new statutes.
71
Both statutes continued to state, as had their predecessors, that the
right to mine precious stones and precious metals was reserved
to the
State. After the war ended in 1902, the Crown Land Disposal
Ordinance
72
provided for the reservation of all rights to minerals, mineral
products and precious stones to the Crown on land granted by the

Crown. This was moderated in 1906
73
by making such a reservation permissible but not obligatory.
[43] Prior to union in 1910 there were new ordinances
dealing with both precious stones
74
and precious and base metals.
75
As to the former Professor Dale says it ‘preserved the
philosophy that the right of mining for and disposing of precious

stones is vested in the Crown’.
76
As to the latter it provided in s 1 that:
‘
The right of mining for and
disposing of all precious metals is vested in the Crown; The
ownership of and the right of mining for
and disposing of base metals
on Crown or private land, is vested in the owner of such land.’
This last of the Gold Laws, for the first time, referred
to and defined the expression ‘holder of the mineral rights’,

thereby giving statutory recognition to the possibility of a
separation of the right to minerals from the ownership of the land.

It also defined, for the first time in the Gold Laws, the expression
‘mining title’. The definition set out six different

sources of mining titles. All six flowed from statutory grants under
the Gold Laws. In the 1908 law prospecting for precious metals

required a permit save in the case of the owner of land. On discovery
of precious metals the area could be proclaimed as a public
digging,
a mineral lease could be granted or a State mine established. In
order to obtain a mineral lease the applicant would have
to show that
it had the capacity to mine. These provisions were replicated in
relation to base metals on Crown land but otherwise
the owner was
permitted to prospect or mine for base metals, or to permit others to
do so. However, in terms of s 121, a royalty
was payable to the
government on the extraction of base minerals.
[44] In Natal there were some early laws relating to
mining, the first of which involving a concession to a coal company,
but the
first major piece of legislation was the Natal Mines Act 17
of 1887, which provided in s 4 that:
‘
The right of mining for and
disposing of all gold, precious stones and precious metals, and all
other minerals in the Colony of
Natal, is hereby vested in the Crown
for the purposes of and subject to the provisions of this Law.”
This went further than the legislation in the Cape and
Transvaal in that it reserved to the Crown the right to mine for and
dispose
of all minerals. Prospecting required a prospecting licence
and on the discovery of minerals there could be public proclamation

of diggings or a mining lease. A linguistic, though not a practical,
distinction was drawn between a gold mining lease and a mineral

lease. The Natal Mines Act emphasised the search for gold and coal.
Owners could obtain mining leases on payment of rent and royalties.

Thus from the outset the position in Natal was that the government
controlled the right to mine and dispose of all minerals. This

continued when the 1887 Act was replaced in 1888
77
and again in 1899.
78
[45] There was also legislation dealing with mining in
the Republic of the Orange Free State and, after 1902, the Orange
River Colony,
although the major mining activities in that area lay
in the future. This largely followed the early Transvaal legislation.
Separate
provision was made in relation to diamonds, where the State
had the option to acquire, with the consent of the owner, any farm on

which diamonds were discovered as an alternative to proclaiming
diggings. In 1904 three pieces of legislation were passed dealing

with precious metals,
79
precious stones
80
and base metals.
81
These did not differ in principle from the legislation in the
Transvaal, save that in regard to base metals they provided that
the
owner could prospect for them or consent to a prospector doing so,
but in that event the prospector had to obtain a licence,
even though
the prospecting was to take place on private land. As in the
Transvaal a royalty was payable in respect of the extraction
of base
metals. Measures in the form of licence fees for non-working of a
claim or even in some circumstances forfeiture of the
claim were put
in place to encourage mining. Like the Transvaal an ordinance
82
was passed reserving all rights, including the right to mine, to
precious stones and precious and base minerals on alienated Crown

lands to the Crown.
[46] At the end of this general and necessarily limited
survey of the pre-Union legislation governing mining in South Africa
some
conclusions can be expressed. In relation to precious stones, of
which diamonds were the most important, gold and silver (and in
the
Transvaal quicksilver
83
),
the right to mine was everywhere reserved to the State under
legislation. As Innes CJ expressed it in
Greathead v Transvaal
Government and Randfontein Estate and Gold Mining Co Ltd
:
84
‘
The policy and scope of the
Gold Law of 1889, and its successors, was to vest the sole right of
mining for, and disposing of, precious
metals in the State.’
This statement was equally applicable
to the other parts of the country prior to Union. Natal went further
in that the sole right
of mining for and disposing of base metals and
minerals also vested in the State. In the Transvaal and Orange Free
State and parts
of the Cape royalties were payable to the government
on the products of mining for base metals and minerals. This is
significant
because a royalty is conventionally a payment in return
for the right to mine for and extract metals, minerals, precious
stones
or oils and gas.
85
Counsel for Agri SA accepted
that this was the nature of these royalties and that they were not a
form of taxation. In this
way therefore the government in these areas
conferred and controlled the right to mine in relation to base metals
and minerals
as well as precious stones and precious metals.
[47] The control that the governments
of the four colonies and their predecessors exercised over the right
to mine in the areas
under their jurisdiction did not divest the
owners of land on which minerals were found of their rights of
ownership in those minerals,
prior to their being extracted by the
process of mining. Until then ownership remained with the owner of
the land, but that ownership
was restricted because the right to mine
was controlled by the State. As Innes CJ said:
86
‘
But that does not decide the question as to
the ownership of the mining rights. Under the scheme of all the gold
laws, past and
present, such rights are treated as distinct from the
dominium
of
the soil; they are vested in and disposed of by the State, and are
exercisable and enjoyed quite apart from the
dominium
.’
[48] I conclude that from an early
stage of South African mining development the right to mine was a
right that the State asserted
for itself and controlled. It then
allocated to owners, prospectors, claims holders or persons holding
mynpachte or mineral leases
in terms of legislation, the right, in
accordance with the terms of those grants, to exercise the right to
mine as it deemed appropriate.
Professor Dale writes:
87
‘
The Mining Industry is of such great
national importance in a country that is blessed with mineral wealth,
that from the earliest
times, the State has sought to control it in
some form or another.
…
In South Africa, after 1850, each of the four colonies which in 1910
united to form the Union of South Africa, developed its own
system
whereby the State controlled the prospecting and mining of certain
minerals, in particular precious metals and precious
stones …’
In relation to any minerals to which these statutes did
not apply he says that ‘the ordinary common law provisions in
regard
to the acquisition of mineral rights, a right to prospect and
a right to mine … apply’. That may be so but the extent

of this entitlement is unclear. It was not the case at all for Natal.
In areas other than Natal and some parts of the Cape the
owner was
expressly permitted to prospect and cause base minerals to be mined.
In the Transvaal that was as a result of a specific
provision in the
Gold Law that gave the right to mine base minerals to the owner of
the land on which they were found and demanded
payment of a royalty
for the privilege. In the Orange Free State the position was the
same, except that a prospecting licence was
required as it was in
parts of the Cape. In three of the provinces royalties were payable
on all or some base mineral production.
None of this is compatible
with the notion that there were substantial areas where the common
law held sway. At the very least
I think Professor Mostert is correct
in saying
88
that: ‘The right to seek for and extract minerals was, however,
in many respects, the prerogative of the state.’
[49] A key event in the development of mining rights in
South Africa was the imposition of the requirement that disposals of
such
rights and mynpachte had to be notarially executed and
registered in the Deeds Registry in order to be binding. The
construction
the courts placed upon such registered rights
facilitated the creation of separate mineral rights. Originally there
was nothing
to say in what form registration should take place. It
appears from
Houtpoort Mining & Estate Syndicate Ltd v Jacobs
89
that the Registrar’s practice was to place such deeds in a
register of
Diverse Akten
, although in some instances he
registered them at the instance of the parties against the title deed
in the Land Register.
[50] That case dealt with the earlier legislation
referred to in paragraph 39, which was replaced in 1902 with a
provision that
‘No lease of any mijnpacht, claim or right to
minerals …’ would be valid unless notarially executed
and registered
‘against the title deeds of the property’.
90
Innes CJ held that this applied to ‘those mineral prospecting
contracts in return for the payment of a yearly rent, and with
or
without option rights which are so common in this country’.
91
He went on to say in regard to a right to search for and win minerals
that:
‘
I must confess to having at first
experienced considerable difficulty --- a difficulty which pressed me
during the argument in finding
an appropriate juristic niche in which
to place this right. Rights of that nature are peculiar to the
circumstances of the country,
and do not readily fall under any of
the classes of real rights discussed by the commentators. They seem
at first sight to be very
much of the nature of personal servitudes;
but then they are freely assignable. On further consideration,
however, I am of opinion
that the difficulty I have referred to is
more academic than real. After all, the right in question involves
the taking away and
appropriation of portions of realty; it implies
the exercise of certain privileges generally attached only to
ownership, and it
is treated by the Proclamation as a real right and
is ordered to be registered against the title. In my opinion;
therefore, this
right when registered occupies the position of a real
right …’
[51] Thereafter, in
Van
Vuren v Registrar of Deeds
,
92
Innes CJ, having pointed out that the
rights so registered were neither personal nor praedial servitudes,
described them as quasi-servitudes.
Separate registration of any
mining right was now required and they were effectively characterised
as real rights. In addition
the 1908 Gold Law provided a definition
of mining title. In the same year provision was made for all mining
titles to be registered
under the Mining Titles Registration Act.
93
Thus was the foundation laid for a
class of separate mineral rights held separately from the ownership
of land. This was a marked
departure from the common law and the
operation of the
cuius
et solum
principle.
The latter was ‘diluted by the fact that the landowner who had
alienated the mineral rights to another was denuded
of any
entitlement regarding extraction of and disposal over such
minerals’.
94
[52] Thus the ability to sever
mineral rights from the dominium of the land to which they related
was afforded by statute, not the
common law. That meant they could be
dealt with as separate real rights. Their registration in the Deeds
Registry against the title
deeds of the property provided protection
that, as the
Houtpoort
Mining
case
demonstrated, had not hitherto been available. The further concepts
underlying our notion of mineral rights were then developed
by ‘the
creative judgments’
95
of our courts. Against that
background I turn to consider the next important period in relation
to mineral laws from 1910 to 1967.
From 1910 to 1967
[53] Section 123 of the South Africa Act, 1909 provided
that:
‘
All rights in and to mines and
minerals, and all rights in connection with the searching for,
working for, or disposing of minerals
or precious stones, which at
the establishment of the Union are vested in the Government of any of
the Colonies, shall on such
establishment vest in the
Governor-General-in-Council.’
The pre-Union statutes summarised above remained in
force and did so, subject to some amendment and supplementation,
until their
repeal by the Mineral Rights Act 20 of 1967. During this
lengthy period mining became ever more important to the South African
economy. Not surprisingly therefore the legislative changes that did
occur reflect an expansion of the State’s powers of control

over mineral resources. In three instances legislation was adopted
that, like the Gold Laws and the Natal Mines Act, vested the
right to
mine and the right to exploit minerals in the State. The first of
these was the Precious Stones Act,
96
which provided in s 1 that ‘the right of mining for and
disposing of all precious stones is vested in the Crown’.

Precious stones were defined to include diamonds, rubies, sapphires
and any other substances proclaimed as such by the Governor-General.

Accordingly the legislation reserved to the State the power by
proclamation to extend its right to mine to other materials. This
was
similar to the position under the 1908 Gold Law and its predecessors,
which authorised the extension of the class of precious
metals by way
of proclamation. That power had been exercised to include silver and
quicksilver during republican days and was invoked
in 1922 to include
platinum, iridium and the platinum group metals.
97
[54] In 1942 the State assumed the right to mine for
natural oil in terms of s 2 of the Natural Oil Act,
98
which provided that ‘the right to prospect and mine for natural
oil is vested in the State’, although there was at
that time
little anticipation of natural oil being discovered in South Africa.
This was at a time when off-shore drilling had only
taken place in a
very few locations close to shore in very shallow waters. The advent
of deep water off-shore drilling came after
the end of World War 2.
99
Uranium was a different matter and the State took control of that in
1948 under the Atomic Energy Act,
100
which provided that
‘…
there shall be vested
in the State the sole right –
to search, prospect or mine for prescribed materials or
in any manner to acquire any such material or to dispose thereof;
to extract or isolate any such material from any
substance, or to concentrate, refine or process, or to produce
atomic energy.’
Prescribed materials were defined as uranium, thorium or
any other material proclaimed by the Governor-General and included
any
substance containing uranium, thorium or any other such material.
[55] Apart from these instances there were also
developments in the law relating to base minerals. No doubt this was
influenced
by the expansion of mining in metals such as iron ore,
manganese, chromium and asbestos
101
that had occurred from around the time of Union through the 1920s and
early 1930s. Whilst the exercise of the right to mine these
base
minerals remained largely in private hands, steps were taken in the
Base Minerals Amendment Act
102
to encourage and compel the holders of such rights to exploit them.
To this end the Minister was empowered to give notice to a
holder of
such rights, who was not prospecting for minerals pursuant to those
rights or in the view of the Minister was not doing
so adequately,
calling upon the holder to prospect adequately or to cause such
prospecting to be undertaken within six months,
failing which the
Minister could call for tenders for and grant a prospecting lease
over the affected property. However, if this
occurred, the royalties
that would be paid would enure for the benefit of the mineral rights
holder. Base minerals were comprehensively
defined as including ‘any
mineral substance’ with the exclusion of natural oil, precious
stones, water and precious
metals as defined in the statutes
governing the exploitation of those. In order to avoid any overlap,
once the Atomic Energy Act
had come into operation the exclusions
were extended to exclude material covered by the Atomic Energy Act in
1951.
103
[56] In the 1960s a process of consolidating and
revising the statutes governing mining in South Africa occurred.
First there was
the Precious Stones Act.
104
As with its predecessors it provided that the right of mining for and
disposing of precious stones was vested in the State. In
other
respects it largely followed the pattern of earlier legislation. More
important, because of its broader scope, was the Mining
Rights Act 20
of 1967 (the 1967 Act), which replaced all the pre-Union legislation
and for the first time created a single system
of mining rights in
South Africa as a whole. Section 2(1) provided that:
‘
Save as otherwise provided in
this Act –
the right of prospecting for natural oil and of mining
for and disposing of precious metals and natural oil is vested in
the State;
the right of prospecting and mining for
and disposing of base minerals on any land is vested in the holder
of the right to base
minerals in respect of the land.’
The exclusion of material covered by the Atomic Energy
Act was continued by s 2(2). Mining title was defined
105
as meaning:
‘
any right to mine granted or
acquired under this Act, and any other right to mine granted or
acquired under any prior law and existing
at the commencement of this
Act, but does not include a right to mine for precious stones.’
This language is significant because it contemplated
that all mineral rights would flow from a statutory grant or be
acquired by
virtue of statutory provisions. That is inconsistent with
the notion that such rights flow from the common law.
106
[57] Under s 7(1) of the 1967 Act no person was
permitted to prospect for precious metals on either State land or
private land
not held under mining title, or for base minerals on
unproclaimed State land not held under mining title, without a
permit. Under
s 11 the Minister could conduct an investigation
into the precious metal, base metal or natural oil content of any
land. Under
s 15(1), if the holder of mineral rights or others
having an entitlement to prospect did not do so or did not do so to
the
Minister’s satisfaction, the Minister could proceed along
lines similar to those under the Base Minerals Amendment Act, 1942.

In other words there was an inducement, and if necessary a
compulsion, to explore for and exploit minerals. Under s 25(2)

the Minister was obliged to issue mining leases in respect of
precious metals to holders of mineral rights over unproclaimed
private
land, to owners or lessees of unproclaimed alienated State
land and otherwise to the prospector. However the entitlement of
these
persons to a mining lease was not absolute. The Minister had to
be satisfied that the precious metal, base mineral or natural oil
was
present in workable quantities; that the scheme under which it was
proposed to carry on mining was satisfactory; and that the
applicant
had, or had made arrangements to obtain, adequate financial resources
and capital to conduct the proposed mining activities.
[58] The 1967 Act preserved the power of the State
President to proclaim public diggings and the right of persons to peg
claims
in such diggings. It dealt with prior rights under mynpachten
and provided, in s 75, for existing mining leases and mineral

leases to remain in force as if it had not been passed. Sections
76(1) and 77(1) provided for mining leases in relation to base

minerals granted under the old Transvaal and Cape legislation to be
converted into mining leases under the 1967 Act.
[59] From 1910 onwards the rights
established in the Transvaal for the registration of mining titles
were maintained and from time
to time extended.
107
In addition the two Deeds Registries
Acts
108
made provision for separate
registration of some mineral rights, and, in 1967, the Mining Titles
Registration Act
109
required that title to all mineral
rights be registered. Registration in turn required the development
of principles relating to
the resolution of conflicts between the
holders of mineral rights and owners of the land or other rights
holders or public authorities.
These disputes were resolved by the
courts applying and adapting common law principles to these novel
rights. They did so by using
familiar legal terms such as lease and
servitude while acknowledging that they were not being used in their
conventional sense.
In the process the legislative origin of these
rights and the degree of departure from common law principles became
obscured.
[60] This tendency to obscure or
overlook the key role of legislation in the development of our law of
mineral rights is well illustrated
by the analysis in the leading
textbook on mining law in regard to the effect of s 2(1) of the
1967 Act.
110
That section dealt clearly and
explicitly with the right to mine in relation to precious minerals
(ss 1(
a
))
and base minerals (ss 1(
b
)).
In doing so it followed the example of the 1908 Gold Law. There seems
little reason not to view this as a statutory allocation
of the right
to mine in accordance with government policy of the day. One cannot
view ss 1(
a
)
as taking away the common law rights of landowners. That would be
inconsistent with over a century of history reflecting the approach

of successive governments in the different parts of the country that
it was for government, not landowners, to determine who should

exercise the right to mine, at least in regard to precious stones,
precious metals, natural oil and uranium and in some instances
more.
Insofar as there can be any question of taking away rights vested in
landowners by the
cuius
et solum
principle,
that had occurred many years before when mineral rights became
capable of severance from ownership of the land, and it
was never
reversed. Section 2(1)(
a
)
clearly retained the position in regard to precious metals and
natural oil that the right to mine was vested in the State and
was
allocated by statute.
[61] Looking at the structure of
s 2(1) there seems no good reason to think that it reflects an
entirely different view in
regard to the right to mine base minerals.
That is recognised by Franklin and Kaplan
111
when they pose the question whether
this is a statutory grant of those rights or a restatement of the
common law.
112
However, without further analysis
they then express the view that it is a restatement of common law
rights. In my opinion that is
incorrect. Under the common law only
the owner of the land would have had the right to prospect for, mine
for and dispose of base
minerals in accordance with the
cuius
et solum
principle.
Section 2(1)(
b
)
does not mention the owner of the land at all, although it is the
landowner who is the beneficiary of the
cuius
et solum
principle.
The section conferred the right to mine in relation to base minerals
on the holder of the rights to base minerals, who
might or might not
have been the owner of the land. If they were, the fact of ownership
of the land added nothing to their entitlement
to prospect and mine.
At most it afforded greater control over the use to which their
property could be put. Where the rights were
separated they were held
under a title that had its origins in legislation and was impossible
to acquire at common law. I conclude
that s 2(1)(
b
)
reflects an allocation by the State of the entitlement to exercise
the right to mine to holders of mineral rights to base metals.
The
underlying principle is that the State has always viewed it as its
entitlement to control and allocate the right to mine. Even
if one
accepts that Professor Dale is correct in saying that at Union in
each of the four provinces ‘the State controlled
the
prospecting and mining of certain minerals’ leaving some to be
dealt with by landowners pursuant to the rights enjoyed
by owners
under the common law, under s 2(1) the State controlled the
prospecting and mining of all minerals, precious and
base, and either
reserved them to itself or allocated them to the holders of mineral
rights. Professor Mostert summarises matters
correctly when she says
113
that:
The philosophy of state control over minerals during the period 1964
to 1990 resulted in a system whereby the state, in which the
right to
mine was vested, conferred rights to mine and prospect to mineral
rights holders.’
The 1991 Act
[62] There can be no doubt that the
1991 Act was intended to alter the position in respect of mineral
rights that had developed
over the 150 years that preceded it.
114
Its genesis was a policy of
privatisation and deregulation announced by the government of the day
in 1987.
115
Its embodiment was s 5(1) the
terms of which bear repetition:
‘
Subject to the provisions of this Act, 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 …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.’
The shift from s 2(1) of the 1967 Act lay in the
fact that there was no longer an express reservation to the State of
any mineral
rights, save where those rights had not been severed from
State land or where they had been severed, but for some reason the
State
was still the holder of the rights. Nor was there any
reservation of rights to the owner of land. In this iteration of
South African
mining legislation the holder of the mining rights was
the only person able to exercise the right to mine. Neither the State
nor
the landowner was so entitled, save where they were also the
holder of the mining rights in respect of land.
[63] Kaplan and Dale
116
expressed the view that this was a
restoration of common law rights in the following comment on s 5(1):
‘
This has the effect, subject to the system
of authorisations and subject to the special provisions relating to
alluvial diggings
mentioned below, that the common law rights of the
holder of the rights to minerals revive to their full extent, Section
5(1) probably
having been intended to be a mere restatement of such
common law … Accordingly, the Minerals Act is more easily
comprehensible
if the principles formerly applicable to base metals
on private unproclaimed land are extended to all other minerals on
all other
classes of land.’
Professor Badenhorst drew attention
to two major difficulties with this view.
117
First, nowhere in the common law was
an independent right to mine identified or refined. The entitlement
to mine arising from ownership
of land was recognised (presumably by
reference to the
cuius
et solum
principle),
but its recognition was indirect and flowed from the principle that
ownership of land gave the owner an entitlement
to the fruits of the
soil. Second, a mineral right was not recognised as a separate
independent right by the common law. That was
a development that had
its origin in legislation and statutory instruments that imported and
adapted British mining practice of
reserving the right to mine to the
State, or recognised mineral rights as separate rights. Both the
legislature and the courts
then categorised these rights by adapting
familiar common law terms, such as ownership, lease and servitude.
118
[64] The 1991 Act vested substantial
powers in the responsible Minister. Although s 5(1) conferred
the right to mine on the
holders of mineral rights, that was made
subject to their obtaining authorisation in terms of s 5(2). The
extent of this power
of authorisation is best illustrated by the fact
that it was thought necessary in s 5(2)(
b
)
to provide a special exemption from the obligation to obtain a mining
authorisation for occupiers of land who removed sand, stone,
rock,
gravel, clay or soil for farming purposes or for effecting
improvements in connection with farming purposes on the land they

were occupying. That such an exemption was necessary illustrates that
the Minister had extensive powers to control mining activities
and
could exercise those powers through the grant or withholding of
mining authorisations. The issuing of mining authorisations
was
governed by s 9 and was dependent on the Director: Mineral
Development being satisfied that the proposed mining would
result in
the optimal development of the minerals; that the applicant had the
capacity to rehabilitate the mine once mining activities
ceased; that
the applicant had the ability, which obviously included the financial
resources, to mine optimally and rehabilitate
the surface. In terms
of s 9(5) an application for a mining authorisation had to
include substantial information concerning
the proposal. The Director
would, in terms of s 11(1), determine the duration of the
authorisation and in terms of s 63
the Minister was empowered to
make regulations governing the exploitation, processing, utilisation
or use of or the disposal of
any mineral and the conditions attaching
to any mining authorisation.
[65] The reaction of the Chamber of Mines to the
original draft of the Bill that became the 1991 Act was hostile. They
said in a
memorandum that:
‘
The State will maintain complete control of
all mining for and disposal of all minerals, precious as well as
base; firstly, by laying
down conditions for the grant of permits and
licences with power to vary such conditions; and secondly by being in
a position to
dictate … that the manner in which the mining
operations and marketing of minerals are being conducted must be in
the Minister’s
liking.’
Whilst the Bill was amended
thereafter, the position remained that it was characterised by ‘a
cradle to grave form of regulation’.
119
Professor Badenhorst concluded that
in its final form it embodied an increase and not a decrease in State
control because it extended
control to all mining of base minerals;
it gave wide discretionary powers to officials and the Minister and
it maintained strict
control of all previous state-held entitlements
to exploit minerals including base minerals.
120
[66] These comments were in my view
justified. To characterise the 1991 Act as restoring common law
rights and relaxing state control
of the right to mine was erroneous.
What the 1991 Act did was to confer on the holder of mineral rights
the exclusive right to
exploit them, because only the holder, or
someone acting with the consent of the holder, could obtain an
authorisation to prospect
or mine that would enable the rights to be
exploited. In itself that was not a major change, as the holders of
mineral rights,
or persons acting with their consent, had in large
measure under the 1967 Act been the only persons entitled to exercise
those
rights, subject to the exception mentioned below in relation to
unexploited rights. The change lay more in two matters. First there

was no longer any express reservation of rights to the State in
respect of any category of minerals, although the State was, for

various reasons, a substantial holder of mineral rights and would
remain such. Second, the provisions directed at securing the
optimum
exploitation of minerals were altered. The State could no longer, as
it had been entitled to do under the 1967 Act, grant
a prospecting
lease in respect of unexploited mineral deposits against the will of
the owner of the land or the holder of the mineral
rights, subject
only to the payment of rental and compensation for damage.
121
In terms of chapter IV of the
1991 Act, the Minister could in very limited circumstances, where the
right to prospect could
not be secured from the rights holder,
authorise prospecting and could also cause unexploited deposits to be
investigated. However,
if it was thought desirable to exploit them,
either the land or the rights would have to be expropriated and
compensation paid.
There is nothing in the record to indicate the
extent to which the Minister had exercised his powers under s 15
of the 1967
Act. It is accordingly impossible to say more than that
the 1991 Act diminished the powers of the Minister in this respect
and
expanded the rights of the mineral rights holder. However, the
exercise of mineral rights was still closely regulated and there
were
provisions to bring about the optimum exploitation and discourage
sterilisation of viable mining rights,
122
as there had been in other
legislation down the years.
[67] Three small and perhaps slightly
obscure provisions make it clear that the State was not, in the 1991
Act, abandoning the principle
that the right to mine vested in it and
that it was for the State to allocate that right as it deemed
appropriate. The first is
s 5(2)(a), which empowered the South
African Roads Board and provincial governments (in relation to
provincial roads) to search
for and take ‘sand, stone, rock,
gravel, clay and soil’ for road-building purposes irrespective
of whether they held
mineral rights to those minerals. That would
clearly diminish the rights of holders of mineral rights in respect
of those minerals.
The second is s 6(3) which, no doubt in
response to the
Trojan
Mining
case,
authorised a person who was exercising a right to mine in respect of
one mineral to mine and dispose of other minerals in
respect of which
they did not have such rights, subject only to an obligation to
compensate the holder of the mineral rights in
respect of the other
mineral. Again that is a subtraction from the rights of the second
mineral rights holder. Third the exercise
of mineral rights was
prohibited in certain areas in terms of s 7 of the 1991 Act. All
of these illustrate to my mind the
fact that in the 1991 Act, as in
previous legislation the State was asserting that the right to mine
vested in it and that it was
for the State to allocate that right in
the manner and to the extent it saw fit.
Legal position prior to 2002
[68] It is apparent from this survey that what have come
to be referred to as common law mineral rights, in both judgments of
the
courts and academic writing, do not in fact have their origin in
the common law. They originate largely from legislation governing
the
right to mine and legislation that permitted personal rights obtained
under contracts to be registered as rights separate from
the
ownership of the land to which those rights related. Their ‘common
law flavour’ has arisen from the creative judgments
of the
courts in characterising and giving effect to such rights within a
framework provided by well-known categories of rights
in our law.
This juristic pigeonholing cannot however be used to disguise the
true origins of such rights. Nor can the adoption
by the courts or,
on occasions, the legislature, of the expression ‘common law
mineral rights’ be taken as being any
more than a convenient
mode of referring generally to such rights. It cannot alter their
true source and nature.
[69] Underpinning the development of
varying forms of mineral rights over the years has been the basic
philosophy that the right
to mine is under the suzerainty of the
State and its exercise is allocated from time to time, as the State
deems appropriate. Apart
from a few instances the State has not
claimed ownership of minerals separate from the ownership of the land
on or under which
they are found. It has been content to allow such
ownership to remain with the landowner. However, ownership of
minerals without
the right to exploit that ownership is of little
value. At most it confers on the owner the power to exclude others
from exploiting
them. Even that has been of limited value over the
years as early legislation recognised the claims of diggers and
proclaimed private
land as public diggings in order to ensure that
the minerals were exploited for the benefit of the State and its
inhabitants. Later
legislation has contained provisions directed at
ensuring the optimal exploitation of mineral rights. This accords
with a point
made by Professor Dale
123
that State interference in relation
to mining has aimed to:
‘…
ensure the full exploitation of
the mineral wealth of the country either by itself mining or by
throwing open the land to public
prospecting and mining, thus
ensuring that sterilization of valuable minerals did not occur merely
because private landowners did
not wish, or were not in a position,
to prospect and mine their land.’
[70] Two other important points flow
from this analysis. The first is that the value of mineral rights –
and I recognise that
for many years such rights have had substantial
value – has flowed from the entitlement the holders have
enjoyed under the
legislation in force from time to time to exercise,
with or without some form of permit, licence or authorisation, the
right to
mine. Mere ownership of minerals in the ground was only
valuable when owners could control access to their land for the
purpose
of prospecting and mining for minerals. Where they could not,
as in the initial gold rush, where claims were pegged out on private

land and the state recognised such claims, the value of that
ownership was diminished. By 1991 the presence of minerals on or
under land conferred no value on the owner, unless the right to mine
in respect of those minerals was also vested in the owner of
the
property. Even then the value lay not in the person’s ownership
of the land but in their being the holder of the mineral
rights. As
Heher JA put it in
Holcim
:
124
‘
Under the Minerals Act 1991, (and previous
to that Act) it was the mining authorisation which conferred
practical value on the mineral
rights by authorising the exercise of
those rights.’
[71] The value of mineral rights at
any time lay first in the anticipation that minerals in payable
quantities were to be found
on the property, and second in the
anticipation that under the then current system in terms of which the
State controlled the right
to mine an appropriate permit, licence or
authorisation would be obtained. This situation pertains whenever
parties are negotiating
a price pursuant to a possible sale or where,
for a purpose, such as rating, estate duty, compensation on
expropriation or the
like, the market value of property must be
assessed. The owner contends that the land has potential for use for
particular purposes
that enhance its value. The prospective purchaser
or valuer will assess the likelihood of the land being usable for
that purpose.
Often the potential use will require some form of
authority from a public authority.
125
If so the likelihood of the public
authority granting that authority will affect the value of the
property.
[72] Accordingly the value of mineral rights will have
ebbed and flowed over time with every adaptation of the statutory
scheme
for the allocation of the right to mine. Prior to 1922 in the
Transvaal the right to mine for minerals other than gold, silver and

quicksilver included the right to mine for platinum. When platinum
was proclaimed to be a precious metal under the 1908 Gold Law
any
value ascribable to the presence of platinum attaching to a right to
mine base minerals in the Transvaal would have declined.
When the
1967 Act made mining leases the key feature of the allocation of the
right to mine, rights held under different forms
of mineral rights
would have diminished in value, save to the extent that they were
preserved or could be converted into mining
leases. Agri SA’s
argument necessarily implies that each of these changes involved an
expropriation of mineral rights
and would, if the present
constitutional protection had then existed, have resulted in
compensation being payable for the loss
of the rights in question.
But that comes close to saying that any action that detrimentally
affects the value of a right is an
expropriation, which is certainly
not correct.
[73] The second point is that changes
in the statutory system for the allocation of the right to mine will
affect those who have
already received permits, licences or
authorisations under the current system differently from those who
merely have the right
to apply for such permits, licences or
authorisations, but have not yet done so. Where rights have been
exercised, changes in the
statutory system may detrimentally affect
the activities being conducted pursuant to the exercise of those
rights. In the latter
case what is affected is the ability in the
future to exercise those rights by applying for a permit, licence or
authorisation
on an exclusive or preferential basis. The difference
is well illustrated by cases dealing with the effect of statutory
amendments
on accrued rights in the context of applications for
permits or licences. Where an application has already been lodged, a
right
to have it considered and decided in accordance with the
current licensing regime may arise. However, people who could have
made
an application under the earlier regime, but did not do so and
are excluded under the new regime, have no cause for complaint.
126
Applying those principles in the
present case the holders of unused mineral rights could not complain
that they had an accrued right
to apply for an authorisation to mine
under the 1991 Act. Their entitlement to make such an application was
removed by the repeal
of that Act. Of course that does not provide an
immediate answer to the question whether their mineral rights have
been expropriated,
but it illustrates the fact that those who had
exercised their entitlement under the 1991 Act to obtain an
authorisation stand
in a different position to those who had not. In
turn that undercuts the contention that in considering whether their
mineral rights
have been expropriated they can be treated as being
similarly situated.
What happened in 2002?
[74] The relevant provisions of the MPRDA were set out
earlier in paragraphs 8 and 9. The right to mine is now to be
allocated to
persons who apply for that right in accordance with the
provisions of the MPRDA. No preference is given to the owner of land
or
the previous holders of mineral rights, although they can compete
with everyone else for the allocation of a prospecting or mining

right or a mining permit under the MPRDA. Existing mineral rights are
relevant only in relation to the transitional provisions
of the MPRDA
contained in Schedule II. The way in which they are dealt with
depends on whether they had been exercised under the
1991 Act or
whether they had not. These provisions need to be examined.
[75] In item 1 of Schedule II the following
definitions appear:
‘“
holder
”
in relation to an old order right, means
the person to whom such right was or is deemed to have been granted
or by whom it is held
or is deemed to be held, or such person’s
successor in title before this Act came into effect;
“
Minerals Act
”
means the Minerals Act, 1991 (Act No. 50 of
1991);
“
old order mining right
”
means any mining lease, consent to mine,
permission to mine, claim licence, mining authorisation or 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;
“
old order prospecting right
”
means any prospecting lease, permission,
consent, permit or licence, and the rights attached thereto, listed
in Table 1 to this
Schedule in force immediately before the date on
which this Act took effect and in respect of which prospecting is
being conducted;
“
old order right
”
means an old order mining right, old order
prospecting right or unused old order right, as the case may be;
“
unused old order right
”
means any right, entitlement, permit or
licence listed in Table 3 to this Schedule in respect of which no
prospecting or mining
was being conducted immediately before this Act
took effect.’
[76] The statutory old order rights
referred to in these definitions are derived from the mineral rights
that existed under the
1991 Act. That is apparent from Tables 1, 2
and 3 to Schedule II. Depending on the nature of the previous right
it translated into
either an old order mining right, or an old order
prospecting right or an unused old order right. I accept, as this
court held
in
Holcim
,
that these are new statutory rights not merely the previous rights
under a different guise. However, the argument presented by
Agri SA
is that not only were common law mineral rights
destroyed by the MPRDA, but that, in
substance, those rights have been acquired by the State. In paragraph
24 I made the point that
in order to determine whether there has been
either a deprivation of rights held by the holders of mineral rights
or an acquisition
of those rights by the state it is first necessary
to consider the nature of mineral rights. The next step in the
analysis must
be to compare the position of holders of mineral rights
in terms of those rights and their position after the changes brought
about
by the MPRDA. That deals with the issue of deprivation. Then
the position of the state insofar as the rights it held before and

after the enactment of the MPRDA must be considered in order to
determine the issue of acquisition.
[77] The holder of an old order prospecting right was
dealt with under item 6 of the Schedule, which is headed
‘Continuation
of old order prospecting right’. Under item
6(1) the old order right continued for two years. In other words for
two years
a person who held one of the rights falling within the
concept of an old order prospecting right continued to enjoy
precisely the
same rights they had enjoyed under the 1991 Act, save
that they were unable to transfer their old order prospecting right
to a
third party as they had been able to do previously. During the
period of two years they were entitled, but not obliged – they

were free to allow the right to lapse if they wished – to lodge
the right for conversion in terms of item 6(2) and the Minister
was
obliged to convert the right into a prospecting right under the
MPRDA. The process of conversion was straightforward. Once
the holder
of the old order prospecting right complied with the requirements of
item 6(2) the Minister was obliged under item 6(3)
to convert the old
order right into a prospecting right under the MPRDA. In terms of
s 5(1) of the MPRDA, such a prospecting
right is a limited real
right entitling the holder to prospect on the land to which it
relates subject to the conditions attaching
to that right. The right
endures for the period provided in s 17 of the MPRDA and is
subject to renewal in terms of s 18
of the MPRDA.
[78] The position in respect of those
mineral rights existing under the 1991 Act that were translated into
old order mining rights
in terms of Schedule II was similar. They
were dealt with under item 7, which this court analysed in
Holcim
.
It is unnecessary to repeat that analysis. Unless the right was
abandoned the holder of the old order right would convert it into
a
mining right under the MPRDA with all the advantages flowing from
such right as set out in s 5, read with ss 23 and 24,
of the
MPRDA. The intention was, as Heher JA said in
Holcim
127
to achieve
‘
the
seamless continuation of existing mining operations which are tested
… by the scope of the licence pursuant to which
the operations
were being conducted’. The same was true of prospecting
activities under the 1991 Act.
[79] Unused old order rights were dealt with under item
8 of the Schedule. These rights were continued for a period of one
year
only. During that year item 8(2) gave the holder of such rights
‘the exclusive right to apply for a prospecting right or a

mining right, as the case may be’ in terms of the provisions of
the MPRDA. Accordingly the holder of such rights instead
of having
the exclusive right to apply for an authorisation to exercise such
rights, as was the case under the 1991 Act, was given
an exclusive
right to apply for either a prospecting right or a mining right under
either s 16 or s 22 of the MPRDA.
The consideration of any
such application then followed the procedures prescribed under the
MPRDA and the application was dealt
with and disposed of under the
MPRDA. If a right was granted the holder of the new right would be in
the same position as a person
who had converted an old order
prospecting or mining right as the case might be.
[80] The operation of Schedule II served to provide
former mineral rights holders, who had already started to exploit
those rights,
with rights that enabled them to a greater or lesser
extent to continue to engage in the activities that they were
engaging in
under the 1991 Act. It is correct that the allocation of
the right to mine was now entirely at the disposal of the State
acting
through the agency of the Minister, with the holder of mineral
rights no longer enjoying any preferent or exclusive right to such
an
allocation, but the transitional provisions resulted in those who had
been allocated a right to mine under the 1991 Act and
exercised it
continuing to enjoy it under the new dispensation. It is so that the
terms upon which they did so would have altered
to some extent, but
they remained in possession of the right either to prospect or mine
for, and in the later case to dispose of,
minerals as before. Those
with unused rights were afforded the opportunity to exercise those
rights but would lose them if they
did not exercise that opportunity.
It is against that background that I turn to deal with the third
question raised by this case
namely whether the MPRDA expropriated
mineral rights.
Was there an expropriation of mineral rights?
[81] It is helpful at the commencement of this part of
the judgment to remind oneself of the full ambit of the contention
that is
being advanced by Agri SA. It is that all mineral rights
in existence under the 1991 Act at the time the MPRDA came into
operation
were expropriated under that Act. Central to this is the
contention that the rights were taken away from the holders of those
rights
and in substance vested in the Minister as representative of
the State. At the heart of those mineral rights and central to all
of
them is the right to mine in the sense I have used it throughout this
judgment as the right to prospect and mine and dispose
of the
minerals extracted from mining. I start therefore by considering what
has happened in regard to the right to mine under
the MPRDA.
[82] Agri SA’s argument is based upon the
hypothesis that mineral rights were common law rights and that
extensive common
law rights were taken away and replaced by lesser
statutory rights in the gift of the Minister. This was the approach
adopted by
the trial court, no doubt because it was the approach
adopted by counsel. However, as I have endeavoured to show, that is
an incorrect
characterisation of the right to mine that lies at the
heart of the debate. A convenient shorthand terminology, useful in
the sphere
of the type of disputes that our courts had over the years
to deal with in cases involving mining and minerals, has been
erroneously
construed as identifying the source of mineral rights. It
is on that basis that it is said that the right to mine flows from
the
common law and has been expropriated.
[83] This contention is not borne out
on analysis, whether one’s starting point is the common law or
the history of mineral
rights in South Africa. Taking the common law
as the starting point it is said to be founded in the
cuius
et solum
principle.
However, that principle has no application once mineral rights are
severed from the ownership of the land to which they
relate. That
severance was not effected by the common law. It came about in the
first instance through the legislation that required
the contracts
embodying personal rights to prospect or mine for minerals to be
registered. Then the courts construed the resulting
registered rights
as real rights separate from the dominium of the land. Their separate
character was preserved in subsequent legislation
dealing with mining
and with the registration of mineral rights. One cannot then ascribe
the origin of separated mineral rights
to the workings of the common
law.
[84] Looked at from the perspective
of the history of mining legislation in South Africa, that history
demonstrates that it has
been the policy of successive governments,
be they colonial, those of the old republics, the union government or
the former regime
in South Africa before the advent of democracy,
that the State controlled the right to mine and its exercise. In
other words the
State has always asserted that in its broad sense, as
opposed to the narrower use of the word in relation to rights enjoyed
by
individuals, the right to mine is vested in the State and that the
State either exercises or allocates that right.
128
The manner in which this has been
done has varied down the years, but the central philosophy in regard
to control by the State has
been consistent.
[85] It seems to me that the key issue is not whether,
as a result of the exercise of the power to allocate the right to
mine, that
right was placed in the hands of persons in the private
sector, which is inevitable unless the mines are nationalised. It is
rather
whether the right vested in the State, along with the power to
allocate the right to others, or whether it vested in individuals

arising from their ownership of land or some other private source. In
my view it was the former. That being so the MPRDA is merely
the
latest in a long line of legislation and statutory instruments in
South Africa that affirms the principle that the right to
mine is
controlled by the State, and allocated to those who wish to exercise
it. The right to mine remains, as it has always been,
ever since
mining became an important part of the economy of South Africa, under
the control of and vested in the State, which
allocates it in
accordance with current policy. That being so the first requirement
of an expropriation, namely that there be a
deprivation of property,
is not established insofar as the right to mine is concerned. That
right was never vested in the holders
of mineral rights, but was
vested in the State and allocated to those holders in accordance with
the legislation applicable to
it from time to time. It could not
therefore be expropriated although rights flowing from the State’s
allocation of the right
to mine could.
[86] Whether this involves the incorporation into South
African law of elements of the public trust doctrine that has some
application
in the United States of America seems to me neither here
nor there. Nor do I think it necessary to try and extract additional
meaning
from the provisions of the MPRDA that describe the State as
the custodian of South Africa’s mineral and petroleum resources

and say that these belong to the nation. Once it is accepted that the
State is vested with the right to mine and is able to allocate
that
right in relation to the country’s mineral resources, it is I
think clear that the State is exercising sovereignty over
those
resources. That the State must exercise its powers on behalf of the
nation goes without saying in a constitutional democracy.
The
statements that the mineral and petroleum resources of the country
‘belong to the nation’ and that the State is
the
custodian of these resources, encapsulate in non-technical language
the notion that the right to mine vests in the State. There
is
nothing to be gained by attempts to dissect these concepts and
categorise them in terms of private law concepts such as ownership.

It suffices to say that recognising that the right to mine is vested
in the State is wholly in accordance with these statements.
[87] Accepting that the right to mine has remained
vested in the State, and that the mineral rights that existed prior
to 2004 are
no more, is there any other basis upon which the
contention of a wholesale expropriation of mineral rights can be
sustained? The
trial court approached the matter by way of a before
and after comparison of the position of holders of mineral rights.
That was
premised on the proposition that the right to mine vested in
the mineral rights holder by virtue of the inherent nature of those

rights rather than as a result of a statutory allocation of the right
to mine. The first difficulty is that the premise is faulty.
The
second, arising from the before and after approach, is that one is
not then comparing a lost common law right with a statutory
grant.
The comparison is between two statutory grants, namely the rights
enjoyed under the previous statutory dispensation and
those enjoyed
under the present dispensation.
[88] Reference to the transitional
provisions demonstrates that this alternative approach cannot assist
Agri SA. The preamble
to the MPRDA reaffirms ‘the State’s
commitment to guaranteeing security of tenure in respect of
prospecting and mining
operations’. Section 2(
g
)
of the MPRDA identifies one of its objects as being to ‘provide
for security of tenure in respect of prospecting, exploration,
mining
and production operations’. Item 2 of Schedule II repeats this
as being one of the objects of the transitional provisions
and
records that one of its aims is to give to holders of old order
rights ‘an opportunity to comply with this Act’,
which it
seeks to achieve by way of the provisions summarised in paragraphs 76
to 78. These provisions make it clear that the rights
that former
mineral rights holders received as a result of the conversion of
their old order rights overlapped to a large extent
with those they
previously enjoyed.
[89] This reality was highlighted by counsel when he
submitted that the large mining houses had not brought claims under
item 12(1)
because they had suffered no loss. However, the reason
they suffered no loss is because, subject no doubt to some variation,
they
continued to enjoy the same or similar rights to those they held
prior to the MPRDA coming into operation. That accords with what
Du
Plessis J said in paragraph 81 of his judgment in the trial court,
namely that the prospecting and mining rights granted under
the MPRDA
are ‘a real right with substantially the same content as the
rights the holders of quasi-servitudes had before
the MPRDA’.
If one uses the mining houses as an example and asks whether, once
the MPRDA came into operation, they continued
to enjoy, by way of an
allocation from the State, the right to mine, to extract minerals and
dispose of them, the answer would
be in the affirmative. Reference to
the reports of the companies listed in the resource sector of the JSE
would reveal that this
was the case. That being so, the MPRDA can at
most have deprived them of some part of the mineral rights they
previously possessed.
Prior to 1 April 2004 they were mining in terms
of their mineral rights and authorisations granted under the 1991
Act. From 1 April
2004 they were mining in terms of old order
mining rights in terms of Schedule II. After conversion they
continued mining, but
in terms of mining permits issued under the
MPRDA. I find it impossible to say in the light of the continuity of
their mining activities
that they were at any stage deprived of their
right to mine. It is true that the source of the right is now
different but the substance
is the same.
[90] The entitlement of holders of old order prospecting
and mining rights to convert their rights into prospecting and mining
rights
in terms of the MPRDA is destructive of the contention that
the content of the mineral rights translated into old order rights
was removed by the MPRDA. The aim was to afford security of tenure
and that was largely achieved by the mechanism of translating

existing mineral rights into old order rights and providing for their
conversion. I accept that the rights now enjoyed may not
be precisely
the same as those previously enjoyed. That means no more than that
some part of the rights previously enjoyed, or
some components of
those rights when viewed as a whole, have been removed. It is not,
however, compatible with the wholesale removal
of the content of
mineral rights. Nor is it compatible with the substantial content of
mineral rights having vested in the Minister.
Accordingly both
elements of an expropriation – deprivation and acquisition –
are absent. I do not exclude the possibility
that some holders of
rights may be able to advance a case that, because of their own
particular circumstances, there has been an
expropriation of some or
all of the rights they previously enjoyed. However, we are not
concerned with such a case but with a contention
that there was a
blanket expropriation of mineral rights. That case cannot be
sustained in the light of the transitional provisions.
[91] I have borne in mind that there
are no longer any mineral rights, in the previously understood sense,
that are capable of transmission
to others without involvement from
the side of the state. That does not assist Agri SA’s argument.
If existing rights have
been converted into prospecting or mining
rights under the MPRDA they are capable of being transferred,
although this requires
ministerial permission.
129
If they have not been converted then
it is the absence of the rights themselves, rather than the absence
of transmissibility, that
is the source of loss. The fact that the
transmissibility of rights under the new dispensation is restricted
does not support the
notion that there has been a deprivation of
rights, in the absence of evidence indicating how this impacts on the
value of the
newly acquired rights. A substantial, if not the major,
portion of mining in South Africa is undertaken by large companies.
If
the mine is valuable the company exploiting it will not want to
give up their mining right. When a transfer is sought it must be

granted provided the transferee is capable of carrying out its
obligations under the right and satisfies the requirements set out
in
the MPRDA for the allocation of such a right initially. It may
transpire that in practice there is little difficulty in transferring

rights in the new dispensation. If it presents a problem there may be
commercial means of circumventing the difficulty. I am unable
to see
that the issue of transmissibility of rights has a bearing on the
question whether all mineral rights have been expropriated.
Nor do I
think that new provisions in regard to the duration of rights affects
matters. Rights may now be of a fixed duration rather
than
indefinite, but they are renewable and whether their duration matters
will depend upon how long it will take to mine them
to exhaustion.
Furthermore, as Professor Mostert points out,
130
rights obtained on conversion may
endure for longer than the rights that were held before.
[92] The foregoing analysis
demonstrates that the situation of different holders of mineral
rights will differ, depending upon whether
they converted their old
order rights and the result of conversion. In some instances
advantages may flow to one party from a conversion
of rights as the
facts of
Xstrata &
others v SFF Association
illustrate.
On the other hand, as Xstrata, the recipient of the advantage, urged
upon the court, that may have been a situation
where there was an
expropriation. I do not suggest that this was necessarily the case,
but mention it to illustrate the point that
different factual
circumstances may warrant different conclusions on the issue of
expropriation. Similarly, the fact that the owner
of land may no
longer be able to prevent the exploitation of minerals on their
property may be a considerable burden for a farmer
who wishes to
preserve the land for farming purposes, but may be of little concern,
save for the lack of financial benefit flowing
from these activities,
to another landowner. The point is that each mineral rights holder
will have been affected differently by
the advent of the MPRDA. That
is inconsistent with the notion of a blanket expropriation of all
mineral rights.
[93] In the trial court the judge concluded on this
aspect of the case that:
‘
From a reading of sections 3 and 5 it is
apparent that, when the MPRDA commenced the State, acting through the
Minister, was vested
with the power to grant rights the content of
whereof were substantially the same as, and in some respects
identical to, the contents
of the quasi-servitude of the holder of
mineral rights. It follows that, by enactment of the MPRDA, the State
acquired the substance
of the property rights of the erstwhile
holders of quasi-servitudes. The fact that the State’s
competencies are collectively
called custodianship does not matter.’
[94] I respectfully disagree. The entire structure of
the transitional provisions of the MPRDA was directed at securing
that the
holders of mineral rights would continue to enjoy broadly
the same rights under the new mining dispensation once those rights
were
translated into old order prospecting and mining rights and
converted under the MPRDA. The process of converting those rights was

largely formal and the Minister was obliged to convert, provided the
rights holder complied with the limited and objective requirements

for conversion. The rights acquired on conversion were not acquired
in consequence of an exercise of the Minister’s power
to grant
rights under ss 17 and 23 of the Act. They were acquired because the
MPRDA made specific provision in Schedule II for
their continued
enjoyment by the holders of mineral rights through the process of
conversion. In substance the rights remained
largely the same, albeit
with a different provenance. The fact that the MPRDA conferred upon
the Minister the power to grant such
rights to new applicants in
respect of properties where no such rights exist, does not mean that
in relation to existing prospecting
and mining rights they were taken
away from holders of mineral rights, acquired by the Minister and
then granted again to the original
holders. The conversion process
provided the means whereby in substance existing mineral rights
holders retained the entitlements
they previously had subject to some
variation, the importance of which would vary from case to case. They
were neither deprived
of their rights nor were the rights they
previously enjoyed acquired by the State in the person of the
Minister.
[95] That conclusion is fatal to the
contention that the MPRDA expropriated all so-called common law
mineral rights. It plainly
did not do so in respect of existing
prospecting and mining rights that were being used. It is
appropriate, however, to consider
whether it effected a narrower
expropriation of all unused mineral rights, into which category
Sebenza Mining’s rights fell.
In the trial court, whilst
confining himself to the coal rights of Sebenza Mining, the reasoning
of Du Plessis J involves upholding
the broad submission that the
MPRDA expropriated all mineral rights. However, in his judgment at
the exception stage of this case
131
Hartzenberg J appears to have
approached the matter on a narrower basis that all the rights
translated into unused old order rights,
as specified in Table 3 to
Schedule II, were expropriated.
[96] Hartzenberg J referred to common law rights in the
same fashion as they were referred to at the trial. He then analysed
item
8 that provides for the conversion of unused old order rights.
He correctly said that the application for conversion was one in

terms of either s 16 or s 22 of the MPRDA and drew
attention to the fact that under the 1991 Act there would have been

no compulsion on holders of such rights to seek authorisations to
exploit them. They were free to let them lie fallow. Under the
MPRDA
they either had to apply for their conversion or lose them entirely.
Such an application was not a formality and not all
applications
would succeed. Leaving on one side his erroneous view that item 12(1)
by necessary implication recognised that an
expropriation had
occurred, Hartzenberg J said that, apart from the transitional
provisions, mineral rights were not recognised
in the MPRDA and
concluded that item 8 was no more than a means of mitigating loss and
did not prevent there from being a deprivation
of existing mineral
rights and their acquisition by the State.
[97] I agree that item 8 proceeds on a different footing
from items 6 and 7, which deal with rights that were already being
exploited
when the MPRDA came into operation. I agree also that it
forced the holders of such rights to decide whether to try and make
use
of them on penalty of deprivation. However, that was only a more
stringent approach by the State to compel holders of mining rights
to
exploit them than that adopted in previous legislation. My difficulty
is with the proposition that item 8 was merely a means
whereby
holders of unused old order rights could mitigate the loss they had
already suffered in consequence of an expropriation
of their rights.
That overlooks the consequence of a holder of such rights
successfully applying for either a prospecting or a
mining right as
contemplated in item 8. In that event they would hold greater rights
than they had enjoyed under the 1991 Act.
Under the earlier Act their
unused rights would only have been of value to the extent that they
were capable of being exploited
by way of an authorisation to
prospect or mine and the holders of such rights had an exclusive
right to obtain that authorisation.
Under item 8 they not only
retained that preference for a year, but would acquire more extensive
rights if they sought and obtained
a prospecting or mining right. The
imposition of a time limit did not deprive them of their rights. A
failure to apply for a right
to exercise them would.
[98] Hartzenberg J also attached some
weight to the fact that applicants seeking to proceed under item 8
would have to pay a fee;
undertake an environmental impact assessment
and satisfy the Minister that they had access to adequate funds to
prospect or mine.
However that overlooks the fact that in terms of
s 9(3)(
a
)
and (
c
)
of the 1991 Act an applicant for an authorisation to mine would have
had to satisfy the Minister in regard to the manner and scale
of the
proposed operations and their ability to mine optimally as well as
their ability to rehabilitate the surface after exhausting
the
minerals being mined. In terms of s 39 of the 1991 Act they
would have had to submit an environmental management programme.
It is
by no means clear that there would have been a great deal of
difference between the two situations. Similarly it is not clear
that
there would be any great difference between an application for a
prospecting authorisation under s 6 of the 1991 Act
and an
application for a prospecting permit under s 16 of the MPRDA. I
do not think that these issues have any impact on the
question
whether the MPRDA effected an expropriation of those mineral rights
that were translated into unused old order rights.
Conclusion
[99] It is as well at the conclusion of a lengthy
judgment to summarise what it decides and make it clear what it does
not decide.
What it decides is that the right to mine in South
Africa, in the sense of the right to prospect and mine for minerals
and extract
and dispose of them, is vested in the State. It is
allocated by the State in accordance with policies that are
determined from
time to time and embodied in the applicable
legislation. The MPRDA is the current iteration of that right. The
contention that
all mineral rights that existed in South Africa under
the 1991 Act were expropriated under the MPRDA is incorrect. The
judgment
does not exclude the possibility that the MPRDA may have
effected an expropriation of certain rights that existed under the
previous
dispensation, but holds that whether it did so depends not
on any general expropriation of mineral rights, but on the facts of a

particular case. Nor does it decide that the effect of a broadly
regulatory statute cannot be to effect an expropriation, but leaves

that open for the future. In fact the judgment is not concerned with
the regulatory impact of the MPRDA as opposed to its substantive

treatment of the right to mine. I do not find it helpful to pose the
issues in this case as being ‘regulatory vs expropriatory’.
132
In my view the right to mine, as opposed to its allocation, is not a
regulatory matter, but a matter of the substantive powers
of the
State in contrast to private law rights to property.
[100] That means that the judgment in favour of Agri SA
must be set aside. It is unnecessary in those circumstances to
express
any view on the assessment of the amount of compensation
awarded by the trial court. There was an issue over the wasted costs
occasioned
by an amendment brought by the Minister at the close of
her case. This compelled Agri SA to call additional witnesses
and
incur additional costs. The Minister did not dispute that a
separate order should be made in terms of which she should be
responsible
for these wasted costs but suggested that they be fixed
as the costs of one day of the trial. In my view it is more
appropriate
to leave that issue to the taxing master.
[101] In the result the following order is made.
1 The appeal is upheld with costs, such costs to include
those consequent upon the employment of two counsel.
The order of the court below is set aside and replaced
by the following order:
‘
(a) The plaintiff’s
claim is dismissed with costs, such costs to include those consequent
upon the employment of two counsel,
but excluding all costs incurred
in respect of or relating to the amendment referred to in paragraph
(b) below.
(b) The defendant is ordered to pay the plaintiff’s
wasted costs, including the costs consequent upon the calling of
witnesses
and the hearing of evidence, occasioned by its application
to amend its plea on 8 March 2011, such costs to include those
consequent
upon the employment of two counsel.’
M J D WALLIS
JUDGE OF APPEAL
NUGENT JA (MHLANTLA JA concurring)
[102]
I
have read the judgment of my colleague and I agree with the orders
that he proposes. However, I reach my conclusion along a slightly

different path and I find it necessary to set out my approach to the
matter briefly.
[103] The mineral rights that are in issue in this
appeal are mineral rights on private land that were not being
exploited, and
in respect of which no authorisation to prospect for
and to mine the minerals had been issued, at the time the MPRDA took
effect
– what are referred to in the Act as ‘unused old
order rights’. Although the argument advanced on behalf of Agri

SA was said by its counsel to apply as much to ‘old order
rights’ that were being used when the Act took effect,
nonetheless
I confine myself to unused rights, bearing in mind that
holders of other rights are not parties to these proceedings and we
have
not had the benefit of hearing what they might otherwise have
said.
[104] I am grateful to my colleague for his succinct yet
comprehensive analysis of the mining legislation that has existed
from
time to time in our history, with which I agree. His analysis
amply demonstrates that, from the beginning of significant mining
in
this country, legislation has stripped the right to prospect for and
to mine minerals from such common law rights as owners
of land might
have had. What remained of that common law right after they had been
stripped – if anything remained at all
133
–
was only the right to the minerals while they
were in situ under the ground.
[105] My colleague has pointed out that the right to
minerals in situ is of no value unless they are capable of being
turned to
account. Throughout its history the legislation has
consistently recognised that the holders of mineral rights should
enjoy at
least some of the bounty. At times the holder was given the
right to exploit part of the mineral deposit while the remainder was

made available for exploitation by others. At times the holder was
given at least a preference when the rights were allocated.
And even
where the right to prospect and mine was allocated to others the
holder of the mineral rights was usually given some of
the fruits by
way of royalties or rentals or a portion of the license fees. It was
the potential that they offered to secure those
benefits –
whatever form the benefits took at various times – that gave
mineral rights their value. Without some potential
of that kind there
is no market for mineral rights and they exist as no more than a
curiosity.
[106] But in whatever way the holders of mineral rights
reaped benefit from the minerals over the years, that has been the
product
of contemporary legislative policy, dictated by political
imperatives from time to time, and not of the mineral rights
themselves.
If they have always been of value that is only because it
has always been government policy to give them the potential for
being
turned to financial account.
[107] The policy of affording the holder at least some
benefits from exploitation of the minerals – which were
features of
all legislation until then – was carried through to
the Mining Rights Act 20 of 1967. In general, it was the holder of
the
mineral rights who would be allocated the benefit of exploiting
them, at least as a matter of preference, but the state nonetheless

retained the right to allocate them elsewhere, particularly to
prevent them being hoarded or sterilised to the detriment of the

country. Thus s 15(1) allowed the Minister of Mines, if he had reason
to believe that adequate prospecting operations may prove
the
existence of minerals, to call upon the holder of the mineral rights
to commence prospecting or to cause prospecting to commence,
failing
which the Minister was entitled to authorise prospecting by third
parties, subject only to payment to the holder of the
mineral rights
of rental fixed by the Minister.
134
Similarly, s 33(1) entitled the Minister, where he was
satisfied that reasonable grounds existed for believing that minerals
existed
on any land in workable quantities, to call upon the person
who qualified for a mining lease (generally, but not exclusively, the

holder of the mineral rights), to apply for such a lease, failing
which he was deemed to have abandoned his right to the lease,
which
entitled the Minister to grant a mining lease to others.
135
[108] I attach greater significance than my colleague to
the effect of the Minerals Act 50 of 1991. It seems to me to have
departed
in some respects significantly from what had gone before,
particularly so far as the hoarding and sterilisation of unused
mineral
rights was concerned, which are the rights now in issue. The
extent to which anti-sterilisation provisions of earlier legislation

had been called upon in the past is not material. Poised as the
country was on the brink of a new dispensation, in which access
to
land and natural resources was destined to come to the fore,
provisions of that kind could be expected to assume significance,
no
matter the extent to which it had been necessary to call upon them
before.
[109] So far as the allocation of exploitation rights is
concerned the material provisions of the 1991 Act were simple and
stark.
Section s 5(1) allowed the holder of mineral rights, or any
person who had his consent, but no others, to prospect for and to
mine
the minerals, subject to state authorisation being given. And
while state authorisation could be withheld, where it was given ss

6(1) and 9(1) allowed it to be given only to the holder of the
mineral rights, or to a person who had his consent, with some
exceptions
for rare occurrences that are not significant
136
.
Almost without exception the ability to exploit the mineral wealth of
the country was placed in the exclusive control of the holders
of
mineral rights. As for the hoarding and sterilisation of mineral
rights, far from the state’s considerable remedies under
the
1967 Act and earlier legislation, its only remedy under the 1991 Act
was to expropriate the relevant land, or to ‘expropriate’

the mineral rights (a misnomer) – which the Minister was
permitted to do if he deemed it necessary in the public interest
137
–
against payment of compensation to the holder of
the rights.
138
[110] In those few brief provisions the 1991 parliament
placed the exploitation of minerals within the full monopoly of
mineral
right holders. It retained to the state considerable power to
prevent uneconomic or environmentally damaging exploitation, by
requiring
stringent conditions to be met before authorisation would
be granted,
139
but so far as exploitation might take place that could
be done only with the consent of the mineral-right holder.
[111] There can be no doubt that the MPRDA divested
unused mineral rights of the value that they held while the 1991 Act
held sway.
The thrust of the argument before us on behalf of Agri SA
was that this came about because the MPRDA extinguished the common
law
rights of a mineral-right holder, and those rights, so it was
submitted, included the right to exploit the minerals. As it was put

in the heads of argument, the holder of a mineral right previously
‘did not have to apply to the state for the right to go
onto
the land, search for coal, and dispose of any coal it found’ –
those rights ‘existed as the content, at
common law, of the
mineral right and were not conferred by the state granting a
prospecting permit or mining licence in terms of
sections 6 and 9 of
the Minerals Act’.
[112] That the MPRDA extinguished common law rights –
such as they were – seems to me to be plain. Item 8(4) of
Schedule
II says as much in providing that
‘
subject to subitems (2) and (3)
140
an unused old order right ceases to exist upon the expiry of the
period contemplated by subitem (1)’ [that is, one year after

the Act came into operation].
An ‘unused old order right’ is defined in
Table 3 of Schedule to include ‘common law’ rights.
[113] But I do not agree, for reasons I have given, and
that are expressed more comprehensively in the judgment of my
colleague,
that the ‘content’ of such common law rights
included rights of exploitation, as submitted on behalf of Agri SA.
Since
the commencement of significant mining those have always been
statutory rights granted in the gift of the state, their grant being

restricted by the 1991 Act to holders of the mineral rights.
[114] In those circumstances the abolition by the MPRDA
of ‘common law rights’ seems to me to be immaterial. Even
without
their abolition the holder of mineral rights would have been
in the same position. The provisions of the MPRDA that have brought

about the loss of their value are not those that abolish common law
rights but instead ss 16, 17, 22 and 23. Sections 16 and 17
deal with
applications for and the grant of prospecting permits respectively.
Sections 22 and 23 deal with applications for and
the grant of mining
authorizations. I do not find it necessary to set out the terms of
those sections. It is sufficient to extract
from them a feature that
they have in common.
[115] Under those sections the grant of prospecting and
mining authorisations is not confined to the holders of the mineral
rights
or those that have their consent – as it was under the
1991 Act. They might be granted to anybody, provided only that they

satisfy various stipulated conditions.
141
The holding of mineral rights is no longer the gateway
to the exploitation of minerals and it is for that reason that the
mineral
rights have ceased to have value. Indeed, the draftsman of
the MPRDA might just as well not have extinguished common law rights

at all, for the difference that it makes. Once they became irrelevant
to the exploitation of minerals – as ss 16, 17, 22
and 23 have
made them – they existed in any event as no more than a
curiosity. In short, it was the extinction of the monopoly
that had
been conferred upon holders of mineral rights by ss 6 and 9 of the
1991 Act – brought about by ss 16, 17, 22 and
23 – that
caused mineral rights to lose their value, not the extinction of the
rights themselves.
[116] Whether the extinction of ‘common law
rights’ by the MPRDA constitutes an ‘expropriation’
of those
rights, as contended for by Agri SA, thus seems to me to be
an abstract question that has no practical bearing on their claim.
Such value as it has lost, for which it claims compensation, did not
lie in its common law rights, but it lay instead in the exclusive

ability to exploit those rights that was conferred by the earlier
legislation. If any question of expropriation arises at all it
seems
to me the question is whether the extension to others of a statutory
right that holders of mineral rights had previously
enjoyed
exclusively constitutes an expropriation.
[117] My colleague has dealt extensively with what is
meant by ‘expropriation’ in the MPRDA and I need not
repeat what
he has said. I can see no basis upon which to find that
the extension to others of exploitation rights that were earlier
within
the exclusive control of mineral-right holders constitutes a
deprivation of property. Those rights of exploitation did not exist

as elements or characteristics of the mineral rights – what
counsel for Agri SA called the ‘content’ of the mineral

rights. The holding of mineral rights did no more than to identify
upon whom the legislature had chosen to bestow its gift. So
far as it
created a monopoly in doing so I cannot see that the statutory
monopoly constituted a property right. By choosing to
bestow its gift
anew in 2002 parliament did not deprive the holders of mineral rights
of property – it deprived them of value
that had accrued to
their property by the creation of the monopoly. While property might
have value, I do not think that value
is in itself property.
[118] For those reasons I agree with the orders that my
colleague proposes.
R W NUGENT
JUDGE OF APPEAL
Appearances
For appellant: C H J BADENHORST SC (with him M WESLEY)
Instructed by:
The State Attorney, Pretoria and Bloemfontein
For respondent: G L GROBLER SC (with him J L GILDENHUYS)
Instructed
by:
Macrobert
Attorneys, Pretoria
Claude
Reid Inc, Bloemfontein.
For amicus curiae: GEOFF BUDLENDER SC (with him MAX DU
PLESSIS and J BRICKHILL)
Instructed by:
Legal Resources Centre, Cape Town
Webbers attorneys, Bloemfontein
1
Holcim
SA (Pty) Ltd v Prudent Investors (Pty) Ltd & others
[2011] 1
All SA 364
(SCA) paras 20 to 24 and
Xstrata & others v SFF
Association
(326/2011)
[2012] ZASCA 20
para 1.
2
See
for example Pieter Badenhorst and Rassie Malherbe ‘The
Constitutionality of the Mineral Development Draft Bill 2000
(Part
2)’ 2001
TSAR
765 especially at 779 and 785.
3
AJ
van der Walt
Constitutional Property Law
(3ed, 2011) 446-451
speculates about the reason for including item 12(1) in the MPRDA
but overlooks its obvious purpose. It does
not impliedly recognise
that the MPRDA brings about an expropriation, and the contrary view
in
Agri SA v Minister of Minerals and Energy
2010 (1) SA
104
(GNP) para 16, is incorrect.
4
M
O Dale and others
South African Mineral and Petroleum Law
Sch
II-206 (Issue 9).
5
M
Kaplan and M O Dale
A Guide to the Minerals Act 1991
at 5-6.
Hanri Mostert
Mineral Law: Principles and Policies
69
endorses this proposition.
6
Subject
to the dispute resolution provisions in s 54 of the MPRDA and
the possibility that some compensation may be paid
to them, either
as agreed or as determined by arbitration or a competent court.
7
Sections
25(1) and (2) embodying this distinction read as follows:
‘
(1)  No one may be
deprived of property except in terms of law of general application,
and no law may permit arbitrary
deprivation of property.
(2)  Property may be expropriated only in
terms of law of general application—
(
a
) for a public purpose or in the public
interest; and
(
b
) subject to compensation, the amount of which
and the time and manner of payment of which have either been agreed
to by those
affected or decided or approved by a court.’
8
Harksen
v Lane NO & others
[1997] ZACC 12
;
1998 (1) SA 300
(CC) paras 31 and 32.
9
1964
(4) SA 510
(T) at 515A-C.
10
A
J van der Walt ‘Striving for the better interpretation –
a critical reflection on the Constitutional Court’s
Harksen
and
FNB
decisions on the Property Clause’
(2004)
121
SALJ
854
at 869-870; Van der Walt , supra, fn 3 at 341 to
347.
11
First
National Bank of SA Ltd t/a Wesbank v Commissioner, South African
Revenue Service & another: First National Bank of
SA Ltd t/a
Wesbank v Minister of Finance
[2002] ZACC 5
;
2002 (4) SA 768
(CC)
12
It
appears that FNB argued that this was a prohibited expropriation
(see para 26 of the judgment), but the case was disposed of
on the
grounds that the section involved an arbitrary deprivation of
property.
13
Harksen
para 31.
14
FNB
para 57.
15
It
is accepted in the present case that the MPRDA is an Act of general
application; that it was passed for a public purpose and
that it
provides for compensation if it brings about an expropriation.
16
I
use the term to encompass both case law and academic writing on the
topic.
17
FNB
para 59.
18
Steinberg
v South Peninsula Municipality
2001 (4) SA 1243
(SCA) para 8.
19
Reflect-All
1025 CC & others v MEC for Public Transport, Roads and Works,
Gauteng Provincial Government,& another
2009 (6) SA 391
(CC)
paras 65 and 66. Elmarie van der Schyff in her doctoral dissertation
The Constitutionality of the
Mineral and Petroleum Resources
Development Act 28 of 2002
at 164-177 proposes the adoption of a
form of constructive expropriation. Professor van der Walt, fn 3,
supra, 347-384 rejects
the doctrine.
20
Footnote
3, supra, 433-4 and 456-8, where he concludes erroneously that item
12(1) ‘amounts to some form of statutory expropriation’,

a proposition not advanced by Agri SA.
21
This
should not be read as if it were a statute prescribing that
acquisition must be by the State in order for there to be an

expropriation. In that case the only possible beneficiary of any
‘acquisition’ would have been the State and this

dictated the language used by Nkabinde J. In
Offit Farming
Enterprises (Pty) Ltd & another v Coega Development Corporation
& others
2010 (4) SA 242
(SCA) paras 14 to 18 this court
held that the Constitution permitted an expropriation in the public
interest even though the
party ultimately acquiring the expropriated
property was someone other than the expropriating authority. That
finding was not
challenged or questioned in the subsequent appeal to
the Constitutional Court.
Offit Enterprises (Pty) Ltd &
another v Coega Development Corporation & others
2011 (1) SA
293
(CC).
22
Footnote
3, supra, pp 343-4.
23
Minister
van Waterwese v Mostert & andere
1964 (2) SA 656
(A) at
667A-B.
24
Van
Wyk JA said: ‘… in die afwesigheid van ʼn
regsfiksie, kan van niemand meer onteien word as wat hy eien nie’

and ‘… die persoon wat onteien slegs die regte wat
onteien is deur die onteiening kan verkry’.
25
Stellenbosch
Divisional Council v Shapiro
1953 (3) SA 418
(C) at 423H-424A.
26
The
Town Council of Cape Town v Hiddingh’s Executors
(1894) 11
SC 146.
27
A
principle embodied in s 12 of the Expropriation Act 55 of 1965. See
Estate Marks v Pretoria City Council
1969 (3) SA 227
(A) at
243A-D.
28
Hewlett
v Minister of Finance
1982 (1) SA 490
(ZS) at 501H-507G;
Davies
& others v Minister of Lands, Agriculture and Water Development
1997 (1) SA 228
(ZSC) at 232F-235I.
29
Government
of Malaysia v Selangor Pilot Association
[1978] AC 337
(PC).
30
Société
United Docks & others v Government of Mauritius: Marine Workers
Union & others v Mauritius Marine
Authority & others
[1985]
1 All ER 864
(PC) at 870c-d.
31
Mutual
Pools & Staff Pty Ltd v The Commonwealth
[1994] HCA 9
;
(1994) 179 CLR 155
at 185.
32
Georgiadis
v Australian and Overseas Telecommunications Corporation
[1994] HCA 6
;
(1994)
179 CLR 297
(HCA) at 304-5.
33
Manitoba
Fisheries Ltd v The Queen
88 DLR (3d) 462.
34
Ulster
Transport Authority v James Brown & Sons Ltd
[1953] NI 79
at
113 and 116.
35
Newcrest
Mining (WA) Ltd & another v The Commonwealth of Australia &
another
[1997] HCA 38
;
(1997) 190 CLR 513
(HCA).
36
Mkontwana
v Nelson Mandela Metropolitan Municipality & another; Bisset &
others v Buffalo City Municipality & others;
Transfer Rights
Action Campaign & others v MEC, Local Government and Housing,
Gauteng, &others (KwaZulu-Natal Law Society
and Msunduzi
Municipality as Amici Curiae)
2005 (1)
SA 530
(CC) paras 87-91.
37
Trojan
Exploration Co (Pty) Ltd v Rustenburg Platinum Mines Ltd &
others
[1996] ZASCA 74
;
1996 (4) SA 499
(A) at 510A.
38
At
509A-510A.
39
Union
of South Africa (Minister of Railways and Harbours) v Simmer and
Jack Proprietary Mines Ltd
[1918] AC 591
at 600.
40
I
have also derived much assistance from the extensive writings in
various journals of Professors P J Badenhorst and H Mostert;
from
the historical overview in B L S Franklin and M Kaplan
Mining and
Mineral Laws of South Africa
1-21 and from Professor
Badenhorst’s doctoral thesis
Die Juridiese Bevoegdheid om
Minerale te Ontgin in die Suid-Afrikaanse Reg.
In the latter at
p 3, fn 5 he makes the point that it is unclear whether
mining rights as separate real rights were
known to the common law
and therefore adopts the expression ‘tradisionele mineraalreg’
in preference to ‘gemeenregtelike
mineraalreg’.
41
After
the hearing of the appeal and the preparation and circulation of the
draft of this judgment, we were furnished with proof
copies of
Professor Hanri Mostert’s book referred to in fn 4 supra. In
large measure it is based on an analysis of the
origins of mineral
rights that is similar to the one in this judgment. It has provided
a useful check on the conclusions reached
in the judgment in regard
to the historical analysis, although my conclusions in regard to the
right to mine go further than
hers and are not dependent upon
characterising the critical provisions of mining legislation as
regulatory.
42
Dale
at 3.
43
Dale
at 12.
44
Gane’s
translation, Vol 6, 192.
45
I
doubt, however, whether it fully justifies Professor C G van der
Merwe’s comment, based on it, that: ‘Sedert die

Middeleeue word die reg op die ontginning van minerale as ʼn
privilegie van die staat beskou. Hierdie standpunt het in die

Romeins-Hollands sowel as die Suid-Afrikaanse reg neerslag gevind.’
C G van der Merwe
Sakereg
(2ed,
1989) 566.
46
Star
Energy Weald Basin Ltd & Anor v Bocardo SA
[2010] UKSC 35
;
[2010] 3 All ER 975
;
[2011] 1 AC 380
, paras 13 to 28
where Lord Hope discusses the brocard in some detail.
47
Anglo
Operations Ltd v Sandhurst Estates (Pty) Ltd
2007 (2) SA 363
(SCA) para 16.
48
Le
Roux & others v Loewenthal
1905 TS 742
at 745;
Nolte v
Johannesburg Consolidated Investment Co Ltd
1943 AD 295
at 315.
49
‘
Horizontal
layers of the earth cannot with us, as they can in England, be
separately owned.’ per Bristowe J in
Coronation
Collieries v Malan
1911
TPD 577
at 591;
Anglo
Operations Ltd v Sandhurst Estates (Pty) Ltd
supra para 16. The contrast between the English law and our own is
discussed by Dale, supra, Chapter 3.
50
P
J Badenhorst ‘The re-vesting of state entitlements to exploit
minerals in South Africa: privatisation or deregulation?’
1991
TSAR
113
at 114. In accordance with the school of thought in
property law that there cannot be a right in a right, he eschews the
use
of the expression ‘rights’ in relation to the things
that the owner may do preferring the expression ‘entitlements’.

The difficulty with this approach is that when this entitlement is
severed from the land it becomes an independent real right,
which
suggests that its legal character is different prior to severance
than after, a notion that poses considerable conceptual

difficulties.
51
This
is the wording of the contract in
Henderson & another v
Hanekom
(1903) 20 SC 513
at 522 of which Kotzé J said
that the conclusion of such contracts had become one of daily
practice.
52
Per
De Villiers CJ in
Henderson & another v Hanekom
op cit
519.
53
Lazarus
and Jackson v Wessels & others
1903 TS 499
at 506.
54
Dale
at 82.
55
The
Mining Leases Act 10 of 1865 (Cape). This was amended from time to
time thereafter.
56
Act
19 of 1883 (Cape).
57
The
Precious Stones and Minerals Mining Law Amendment Act 44 of 1887
(Cape).
58
Precious
Minerals Act 31 of 1898 (Cape).
59
Precious
Stones Act 11 of 1899 (Cape).
60
The
Mineral Law Amendment Act 16 of 1907 (C).
61
An
Act regulating the discovery, control and management of the fields
where precious stones and precious metals are found in this
State.
(My translation.)
62
Law
1 of 1871.
63
The
mining right to all precious stones and precious metals belongs to
the State. (My translation.)
64
Law
2 of
1872; Law 7
of
1874; Law 6
of
1875; Law 1
of
1883; Law 8
of
1885; Law 10
of
1887; Law 9
of
1888; Law 8
of
1889; Law 10
of
1891;
Law 18
of
1982; Law 14
of
1894; Law 19
of
1895; Law 21
of 1986 and
Law 15 of 1898. The full title of each law is set out in a table in
Dr Kaplan’s thesis at xi. From Law 1 of
1883 they were
entitled laws ‘op het delven van en handel drijven in edel
metalen en edelgesteenten in de Z A Republiek’.
The 1898 Law
was the first to be described as ‘De Goudwet Der
Zuid-Afrikaansche Republiek op Het Delven van en Handel Drijven
in
Edele Metalen.’.
65
Dale,
at 194, draws attention (referring to the position in 1897) to
‘the delicate counter-balancing of the potentially
conflicting
rights of the surface owner, mineral right holder, and mining title
holder, as also between the various mining title
holders themselves’
He also adopts the view of M Nathan in the preface to
Gold
and Base Metals Laws
(6ed, 1944) that these laws reflected the
growing importance of State supervision and intervention and the
recognition of the
interest of the public at large.
66
Tot
regeling van de Betaling van Heerenregten.
67
No
disposal of rights to minerals believed to be present or actually
present on any property shall be lawful unless a notarial
deed
thereover is prepared and properly registered at the office of the
Registrar of Deeds. (My translation.) The provision was
replaced by
s 16 of Law 20 of 1895 and thereafter by s 29 of
Proclamation 8 of 1902 which was to the same effect.
68
Jolly
v Herman’s Executors
1903 TS 515
at 520.
69
The
ownership of and right to exploit base metals and minerals on both
proclaimed and unproclaimed ground belongs to the owner
of the
ground. (My translation.)
70
Base
Minerals and Metals Law 14 of 1897 (T).
71
Gold
Law 15 of 1898 (T) and Precious Stones Law 22 of 1898 (T).
72
Ordinance
57 of 1903 (T).
73
By
Ordinance 13 of 1906 (T).
74
Precious
Stones Ordinance 66 of 1903 (T).
75
Gold
and Base Metals Ordinance 35 of 1908 (T).
76
Dale
at 197.
77
Natal
Mines Act 34 of 1888.
78
Coal
and Mines Act 43 of 1899 (N).
79
Precious
Metals Ordinance 3 of 1904 (O).
80
Precious
Stones Ordinance 4 of 1904 (O).
81
Base
Metals and Minerals Ordinance 8 of 1904 (O).
82
Crown
Land Disposal Ordinance 13 of 1908 (O).
83
Mercury
in solid form that was used in the process of extracting gold from
gold ore.
84
Greathead
v Transvaal Government and Randfontein Estate and Gold Mining Co Ltd
1910 TS 276
at 288. This was a view consistently held by him.
See
Neebe v Registrar of Mining Rights
1902 TS 65
at 81 where
he said: ‘The right of mining for and disposing of all
precious metals has by statute been given to the State.’
See
also Smith J at 90.
85
Xstrata
& others v SFF Association
, supra, para 18.
86
Simmer
and Jack Proprietary Mines Ltd v Union Government (Minister of
Railways and Harbours)
1915 AD 368
at 396.
87
Dale
at 171-2.
88
Mostert
supra 20.
89
Houtpoort
Mining & Estate Syndicate Ltd v Jacobs
1904 TS 105
90
Section
29 of Proclamation 8 of 1902 (T).
91
Lazarus
and Jackson v Wessels & others
supra 506.
92
Van
Vuren v Registrar of Deeds
1907 TS 289
at 295.
93
Act
29 of 1908.
94
Mostert
supra 7
95
The
phrase is Professor Badenhorst’s in his article ‘Towards
a theory of mineral rights’
1990
TSAR
239
at 239.
96
Act
44 of 1927.
97
Kaplan
11.
98
Act
46 of 1942.
99
See
A Brief History of
Offshore Drilling
a staff working paper
prepared for the National Commission investigating the BP Deepwater
Horizon Oil Spill and Offshore Drilling
available at
http://www.oilspillcommission.gov/sites/default/files/documents/A%20Brief%20History%20of%20Offshore%20Drilling%20Working%20Paper%208%2023%2010.pdf
.
100
Act
35 of 1948.
101
H
P Hart ‘Asbestos in South Africa’
J. S. Afr. Inst.
Min. Metal
vol 88, no 6, 185-196, which notes that asbestos
mining began in earnest in South Africa in the 1930s.
102
Act
39 of 1942.
103
By
s 1 of the Base Mineral Investigation Act 31 of
1951.
104
Act
73
of 1964.
105
In
s 1(xxiii).
106
Franklin
and Kaplan, supra, 340 say that the sources of mining title under
this definition are twofold namely a right to mine
granted under the
1967 Act or a statutory right acquired directly by the holder. In
either event the right flows from the statute
not the common law. In
the Mining Titles Registration Act 16 of 1967 the concept of a
holder of a mining right is defined (s1(vi))
in relation to rights
‘granted or acquired’ under the 1967 Act or any other
statute.
107
Franklin
and Kaplan, supra, 586.
108
Act
13 of 1918 and Act 47 of
1937.
109
Act
16
of 1967.
110
See
footnote 106 and para61, post.
111
Supra
345-6.
112
The
same question was posed, without being answered, by Caney J in
S
A Permanent Building Society v Liquidator, Isipingo Beach Homes
(Pty) Ltd
1961 (1) SA 305
(D) at 313C.
113
Mostert
supra 55.
114
In
what follows I deal with the 1991 Act as if it had been applicable
from the outset in the whole of South Africa. That was not
however
the case, as in the so-called TVBC states and homelands the 1967 Act
remained in force and in some instances there was
local legislation.
There was only a unified system after the passage of the Mineral and
Energy Laws Rationalisation Act 47 of
1994. A more complete picture
emerges from Mostert, supra, 51-53.
115
Badenhorst
fn 50 supra, p 113, fn 7.
116
Supra,
para 1.5.2, pp 5-6 and paras 4.2 and 4.3 pp 46-48.
117
P
J Badenhorst ‘Artikel 5(1) van die Mineraalwet 50 van 1991: ʼn
herformulering van die gemenereg?’
(1995) 58
THRHR
1
at
5-8.
118
Professor
Badenhorst expresses it thus
:
‘
Tweedens word kategorisering
van bevoegdhede voortspruitend uit 'n mineraalreg as sodanig nie in
die gemenereg aangetref nie aangesien
'n mineraalreg nog nie as
afsonderlike en selfstandige saaklike reg bestaan het nie. Hierdie
ontwikkeling het sedert 1813 hier
te lande plaasgevind, hoofsaaklik
vanweë wetgewing wat óf uitdrukking verleen het aan die
Britse praktyk om tydens
die uitgifte van grond die mineraalregte
ten gunste van die owerheid voor te behou, óf die
selfstandigheid van mineraalregte
erken het.
Kategorisering van ontginningsbevoegdhede wat ingevolge
die gemenereg bestaanbaar sou wees, het eerder deur (i) die wetgewer
en
(ii) die howe na analogie van die inhoud van eiendomsreg, die
serwituut-figuur en wetgewing plaasgevind.
Die wetgewer het 'n belangrike rol gespeel in die
nadere identifisering van die ontginningsbevoegdhede wat vanuit
ontginningsregte
voorspruit deurdat hierdie bevoegdhede as
selfstandige regte beskou is.’
119
Badenhorst,
fn 46, supra, 129. Mostert, supra, para 5.2.1, pp 60-69 and
para 5.4 at p 72 appears to share this view, although
she also seems
to think that in some form this involved a restoration of common law
rights, a view I do not share.
120
Badenhorst
op cit 129-130.
121
Section
15 of the 1967 Act and particularly s 15(3). A prospecting
lease was the gateway to a mining lease. Franklin and
Kaplan, supra,
79. In the case of a prospecting lease under s 15 the
prospector would be entitled to obtain a mining lease
under
s 25(1)(e) read with s 25(2)(c) of the 1967 Act.
122
Chapter
IV of the
1991 Act.
123
Dale
at 172.
124
Para
37.
125
See
for example the discussion of this issue in
Port Edward Town
Board v Kay
1996 (3) SA 664
(SCA) at 674I-682H.
126
Director
of Public Works & another v Ho Po Sang & others
(1961) 2
All ER 721
(PC);
Natal Bottle Store-keepers and Off-sales
Licences Association v Liquor Licensing Board for Area 31 &
others
1965 (2) SA 11
(D);
Industrial Council for the
Furniture Manufacturing Industry, Natal v Minister of Manpower and
Another
1984 (2) SA 238
(D).
127
Para
26.
128
It
is in this sense that I understand Professor Dale to refer to the
right to mine being vested in the State. It is also the sense
in
which I understand Professor Barton to use it in describing
comparative legislative systems.
129
Section
11.
130
Mostert,
supra, 99.
131
Footnote
3, supra.
132
It
is here that I part company from Professor Mostert in her analysis
in Chapters 6 to 8, which locates the right to mine within
a
regulatory framework for mining.
133
At
least some of the legislation might be construed as extinguishing
common law mineral rights altogether, and conferring upon
the owner
an equivalent statutory right to the minerals in situ, at least by
implication. Whether the right of owners to the
minerals in situ is
a remnant of their common law right, or whether it is itself a right
conferred at various times by statute,
is nonetheless not material
to this appeal.
134
Section
15(1) read with s 15(3).
135
Section
35 read with s 42.
136
Where
the holder of the mineral rights could not be readily traced, and
where the person entitled to the rights by succession
had not
obtained them by cession after a period of two years: s 17(1).
137
Section
24(1).
138
Compensation
was payable by the person at whose request the land or rights had
been expropriated. In the absence of agreement,
it was to be
determined by valuation in accordance with s 12 of the Expropriation
Act 63 of 1975 (s 24(1).
139
Section
9(1) prohibited the issue of a mining authorization unless the
regional director was satisfied –
with the manner in which and the scale on which the
applicant intends to mine the mineral concerned optimally and
safely under
such mining authorization;
with the manner in which such applicant intends to
rehabilitate disturbances of the surface which may be caused by his
mining
operation;
that such applicant has the ability and can make the
necessary provision to mine such minerals optimally and safely and
to rehabilitate
such disturbances of the surface ; and
that the mineral concerned in respect of which a
mining permit is to be issued -
occurs in limited quantities in or on the land or in
tailings, as the case may be, comprising the subject of the
application;
or
will be mined on as limited scale; and
will be mined on a temporary basis; or
that there are reasonable grounds to believe that the
mineral concerned in respect of which a mining licence is to be
issued
–
occurs in more than limited quantities in or on the
land or in tailings, as the case may be, comprising the subject of
the application;
or
will be mined on a larger than limited scale; and
will be mined for a longer period than two years.’
140
Those
subitems are not now material
141
For
example, that they have the financial resources and technical
capacity to prospect or mine, as the case may be.