Sishen Iron Ore Company (Pty) Ltd and Another v Minister of Mineral Resources and Others (28980/10) [2011] ZAGPPHC 220 (20 December 2011)

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[2011] ZAGPPHC 220
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Sishen Iron Ore Company (Pty) Ltd and Another v Minister of Mineral Resources and Others (28980/10) [2011] ZAGPPHC 220 (20 December 2011)

REPORTABLE
IN THE HIGH COURT
OF SOUTH AFRICA
NORTH GAUTENG
DIVISION
CASE
:28980/10
DATE:20/12/2011
SISHEN IRON ORE COMPANY (PTY)
LIMITED
.......................................
First
Applicant
ARCELORMITTAL SOUTH AFRICA
LIMITED
...........................................
Second
Applicant
and
MINISTER OF MINERAL
RESOURCES
.....................................................
First
Respondent
DIRECTOR-GENERAL: DEPT OF MINERAL
RESOURCES
....................
Second
Respondent
DEPUTY DIRECTOR-GENERAL:
MINERAL REGULATION
....................
Third
Respondent
DEPARTMENT OF MINERAL
RESOURCES
.............................................
Fourth
Respondent
THE REGIONAL MANAGER
JMORTHERN CAPE REGION,
DEPT OF MINERAL RESOURCES
IMPERIAL CROWN TRADING 289 (PTY)
LIMITED
.................................
Fifth
Respondent
THE OFFICER PERFORMING FUNCTIONS IN
TERMS
….....................
Sixth
Respondent
OF THE MINING TITLES REGISTRATION ACT
1967
DEPT OF MINERAL RESOURCES
JUDGMENT
ZONDO. J:
INTRODUCTION
It is necessary to describe
the parties to this matter before I can go into the merits of the
dispute between the parties. The first
applicant is Sishen Iron Ore
Company (Proprietary) Limited, a company that is duly registered as a
company in accordance with the
company laws of the Republic. For
convenience the first applicant will be referred to in this judgment
interchangeably as either
Sishen or S10C. Sishen is a subsidiary of
Kumba Iron Ore Limited, also a company that is registered in
accordance with the company
laws of the Republic. Kumba Iron Ore
Limited will be referred to as Kumba in this judgment. Sishen carries
on business as a mining
company. Its registered office is in
Centurion, Gauteng.
[2] The second applicant is
ArcelorMittal South Africa Limited, a company that is duly registered
as a company according to the
company laws of the Republic. For
convenience it will be referred to in this judgment as AMSA or where
context so requires, 1SCOR
AMSA was previously known as Mittal Steel
South Africa Limited and, before that, ISCOR Limited. AMSA was not
party to these proceedings
when they were instituted. It was joined
as a second applicant in terms of an order 1 made on the 6th June
2011 pursuant to an
application that had been made by Sishen for it
to be joined in these proceedings. AMSA had also made a similar
application but
the order that I made was granted pursuant to
Sishen's application. Pursuant to the order I made on the 6th June
2011 AMSA delivered
an affidavit supporting the relief that it seeks
in these proceedings. Sishen and the respondents delivered and served
answering
affidavits to AMSA's affidavit and subsequently AMSA
delivered and served its replying affidavit.
[3] The first respondent is
the Minister of Mineral Resources who is cited in her official
capacity as such. In terms of the Mineral
and Petroleum Resources
Development Act, 2002 ("the MPRDA") the Minister is charged
with the authority of making some
of the decisions that are sought to
be reviewed in this matter even though she may have delegated such
authority to some of the
officials in her Department and may not have
taken these decisions herself in this case. In this judgment she will
be referred
to as the Minister
[4] The second respondent is
the Director-General of the Department of Mineral Resources. At all
times material to this matter the
Director-General of the Department
was Mr Sandile Nogxina. The Director-General will be referred to in
this judgment as either
the Director-General or Mr Nogxina. He is
cited in these proceedings because, inter alia, of the powers vested
in him by section
103(1) and (2) of the MPRDA and in his capacity as
the person in charge of the Mineral and Petroleum Title Registration
Office
("MPTRO") by virtue of section 5(1) of the Mining
Titles Registration Act, 1967 ("MTRA") and because of the

interest he may have in the relief sought by Sishen in this matter.
[5] The third respondent is
the Deputy Director-General: Mineral Regulation: Department of
Mineral Resources. He is Mr Rocha. The
third respondent is cited
because he was the official of the Department who took the decision
to grant 1CT a prospecting right
which is one of the decisions that
both Sishen and AMSA seek to have reviewed and set aside in this
matter. The third respondent
will be referred to in this judgment as
either the DDG ( short for Deputy Direct- General) or as Mr Rocha.
[6] The fourth respondent is
the Regional Manager, Northern Cape Region, Department of Mineral
Resources. The fourth respondent
is cited because he took the
decision to approve the environmental management plan submitted by
the fifth respondent in support
of the latter's application for a
prospecting right which approval Sishen seeks to have reviewed and
set aside.
[7] The fifth respondent is
imperial Crown Trading 289 (Pty) Limited, a company that is duly
registered in accordance with the company
laws of the Republic. In
this judgment the fifth respondent will be referred to as ICT. It is
cited because of the interest it
has in the decisions which Sishen
seeks to have reviewed and set aside as they had been taken in its
favour.
[8] The sixth respondent is
the Officer in the service of the Department of Mineral Resources who
is designated by the Director-General
to perform functions in the
Mineral and Petroleum Title Registration Office in terms of the MTRA.
[9] One of the largest
opencast iron ore mines in the world is situated in the district of
Kuruman, Kimberley. in the Northern Cape,
South Africa. It is called
the Sishen Iron Ore Mine. The Sishen Iron Ore Mine is said to account
for almost 65% of South Africa's
total iron ore demand and 3.9% of
the global seaborne trade in iron ore. The first applicant owns the
Sishen Iron Ore Mine. This
matter relates to a number of disputes
amongst the parties. The disputes all concern the entitlement of some
or other of the parties
to iron ore or a certain portion thereof in
the Sishen Iron Ore Mine or the reviewability of certain decisions
taken by the State
functionaries cited in these proceedings about
certain rights to such iron ore. Exactly which party has what dispute
with which
party will emerge later in this judgment.
[10] On I March 2001 the
board of directors of ISCOR Limited, which was a state corporation
originally established in 1928, announced
the unbundling of ISCOR. In
the course of that year ISCOR was unbundled into two entities, namely
Vicva Investments and Trading
Seven (Pty) Ltd (which later became
known as Kumba Resources Limited.) and Vicva Investments and Trading
Eight (Pty) Ltd (which
later became Sishen Iron Ore Company (Pty)
Ltd), the first applicant in this matter. Vicva Investments and
Trading Seven (Pty)
Ltd was to focus on steel production whereas
Vicva Investments and Trading Eight (Pty) Ltd was to focus on mining.
ISCOR's operations included
iron ore mines at Sishen and Thabazimbi and steel manufacturing
plants at Vanderbijlpark. Vereeniging
and Newcastle.
[11] ISCOR's mining division
had been more profitable than its steel division. One motivation for
the unbundling was to separate
the mining side from the steel side of
the business. It was envisaged that the steel side would in the long
temi require a total
of approximately 8.25 mtpa of iron ore if the
mine operated at 100% of its capacity. The parties believed that
21.4% of the expected
annual yield of the Sishen Mine was
approximately equivalent to 6.25mtpa of iron ore.
[12] On the 10"' April
2001 ISCOR and Sishen concluded an agreement, styled the Notarial
Acquisition Agreement in tenns of
which ISCOR sold to Sishen its
entire operation in relation to the business of prospecting, mining
and processing of iron ore.
The agreement was to take effect from 01
July 2001. This agreement was later amended by way of. inter alia, a
notarial third amendment
which was executed on the 22
nl1
of October 2001. This amendment recorded that ISCOR had sold to
Sishen the business comprising the operation as defined therein
but
that the parties had "agreed further to amend the agreement in
order to exclude 0.21,4000 undivided share of the rights
to iron ore
in respect of certain of the properties listed in annexure B7 to the
agreement and to effect amendments consequential
thereto." For
convenience, 1 shall refer to this agreement as the "business
agreement."
[13] Prior to July 2001 ISCOR
Limited was the 100% holder of a common law right to iron ore in the
Table 1 properties set out below.
On July 2001 the business agreement
came into effect and ISCOR sold the Sishen Mine to Sishen.
Furthermore. ISCOR ceded an undivided
78.6% share in its common law
right to iron ore in the Table 1 properties. ISCOR retained the
remaining 21.4% share of its common
law right to iron ore in Table 1
properties.
[14] On the 22nd October 2001
and in anticipation of the conclusion of a certain agreement on the
23"' October 2001. 1SCOR
and Sishen applied to the
Director-General: Mineral Resources tor the latter's approval under
section 20(3) of the Minerals Act.
1991 ("the Minerals Act")
for the division of the right to iron ore in and upon the properties
into respectively 21.
4% and 78, 6% undivided shares.
[15] On 23 October 2001 ISCOR
and Sishen concluded an agreement in terms of which Sishen would
conduct mining operations in respect
of the common law right to iron
ore in the Table 1 properties, beneficiate the iron ore and supply
6.25 million tons per annum
(mtpa) iron ore products to ISCOR. As for
ISCOR it bound itself to contribute on a pro rata basis to the costs
of mining by paying
to Sishen a fee of 3% of the mining costs to
Sishen for Sishen's services.
[16] Owing to the importance
of the agreement of the 23"' October 2001 between the parties,
it is necessary to refer to, and.
if necessary, quote certain
provisions thereof. Under the heading: "RECITALS" at the
beginning of the agreement it is
recorded that ISCOR was at that time
"the holder of 100% (one hundred percent) of the mineral rights
in the properties but
was in the process of transferring 78.6%
(seventy eight comma six percent) of the iron ore mineral rights in
the properties to
[Sishen] with the result that it [would] hold a
21.4% (twenty one comma four percent) of the undivided share in the
mineral rights
pertaining to iron ore on specified properties."
[17] The properties that were
specified in the agreement were the Table 1 properties. The Table 1
properties were the following:
(a) the remaining extent of
portion 3 (portion of portion 1) of the farm GAMAGARA 541, division
of Kuruman, Northern Cape Province,
measuring 452.3519 hectares held
under a Certificate of Rights to Minerals in favourof ISCOR.
(b)the remaining extent of
portion 4 of the farm GAMAGARA 541, division of Kuruman. Northern
Cape Province, measuring 593. 3233
hectares held under a Certificate
of Rights to Minerals.
(c)the remaining extent of
portion 2 (RUSSOORD) (portion of portion 1) of the farm SACHA 468.
division of Kuruman. Northern Province,
measuring 840,1399 hectares;
(d)remaining extent of
portion 3 (portion of portion I) of the farm SACHA 468. division of
Kuruman, Northern Cape Province, measuring
298,9699 hectares held
under certificate of Rights.
(e)the remaining extent of
portion 1 (BERNADENE) of the farm SIMS 462. division of Kuruman,
Northern Cape Province, measuring 1231,5732
hectares held under a
Certificate of Rights to Minerals.
(0 the remaining extent of the farm
SISHEN 543, division of Kuruman, Northern Cape Province, measuring
1050. 6221 hectares.
(g) the remaining extent of
portion I (LOT A) of the farm SISHEN 543, division of Kuruman,
Northern Cape Province, measuring 11534290.
(h) the remaining extent of
the farm SACHA 468, division of Kuruman, Northern Cape Province,
measuring 6379782 hectares.
[18] In section B of the recitals of the
agreement the following provision appeared:
"SIOC will become
the
holder of 78. 6 % (seventy eight comma six percent^ of the undivided
mineral rights pertaining to iron ore
(but also all the rights
(100%) to other minerals which do not form part of this agreement) in
and upon the properties"' (my
underlining).
I have underlined the words
"the holder of 78, 6% (seventy eight comma six percent) of the
undivided mineral rights pertaining
to iron ore" to make it
quite clear what the 78, 6% was 78. 6% of in the arrangement between
Sishen and ISCOR.
[19] In section C under the
recitals the parties to the agreement undertook to take all the
necessary
steps to obtain mining
authorisations as contemplated in section 9(1 )(a) and (b) of the
Minerals
Act, No. 50 of 1991 as
amended. In section D the agreement provided as follows:
"ISCOR wants to appoint SIOC to
mine its undivided share of the mineral rights in iron ore on the
properties and SIOC is prepared
to accept such appointment"
Clause 5 of the agreement
dealt with the principles of the agreement. Some of the
principles are dealt with
below. Clause 5.2 read as follows:
"5.2 SIOC shall mine on behalf of
ISCOR Lump Iron Ore, DR Iron Ore, DRS Iron Ore, and fine iron ore on
the basis of and in
accordance with the geological physical and
chemical composition of the iron ore reserve in and upon the
properties." Clause
5.8 dealt with the ownership of the iron
ore. It provided thus:
"5.8 because the parties have
undivided rights to the iron ore on the properties, ownership shall
only be determined once Iron
Ore has become loaded on the rail
wagons." Clause 5.11 provided as follows:
"5.11 ISCOR will not sell any of
the Iron Ore products directly or indirectly to any third party,
except in accordance with
this agreement."
[20] In clause 6.1 of the
agreement the parties undertook to display good faith and
reasonableness in dealing with each other and,
where possible, to
co-operate in the implementation of the agreement. Clause 6(1) also
provided that the parties "undertake
to do all such things,
perform all necessary acts and procure the taking of all necessary
steps to give effect to the intention,
the principles agreed to in
clause 5 and the terms and conditions of this agreement." Clause
6.2 read as follows:
""6.2 The parties
acknowledge that pursuant to the anticipated promulgation as binding
legislation of the draft Mineral
and Petroleum Resources Development
Bill ("the Bill") circulated for public comment as at the
effective date.
6.2.1 The Minerals Act will
be repealed and replaced by the new legislation.
6.2.2 The concept of the
common law ownership of mineral rights regime premised on the vesting
of the right to prospect and mine
for all minerals in the state"
[21] Under clause 7 of the
agreement Sishen was appointed which appointment Sishen accepted but
there is no provision in that clause
on what Sishen was appointed to
do. It seems that this clause must be read together with section D
under "'recitals"
because in that section it is stated that
Sishen was to be appointed "to mine [ISCOR's] undivided share of
the mineral rights
in the iron ore on the properties." It is
also indicated in that section that Sishen was prepared to accept
that appointment.
That being the case, it can safely be accepted that
the appointment of Sishen contemplated in clause 7 was an appointment
of Sishen
to mine ISCOR's undivided share of the mineral rights in
the iron ore on the properties whatever that means.
[22] With regard to the
remuneration of Sishen, clause 8 of the agreement provided that
Sishen would be entitled to 3% of "the
ISCOR contract cost as a
contractor's fee for services rendered in tenns of this agreement."
Clause 8.2 provided that Sishen
would invoice ISCOR on a monthly
basis "tor the contractor's fee which invoice and payment shall
be in accordance with clause
14."Clause 13 of the agreement
dealt with Sishen's obligations, Clause 13,1 was to the effect that
Sishen acknowledged that
it was aware of the terms, conditions,
restrictions and obligations subject to which ISCOR held its rights
to the iron ore in and
upon the properties and would, accordingly,
observe and comply therewith. Clause 14 dealt with payment and
invoicing. Clause 14.1
read thus:
"14.1 SIOC shall submit within
7(seven) working days after the end of the month a value added tax
invoice, stating the ISCOR
contract cost plus 3% (three percent) of
such cost payable for the number of Dry Tons of Iron Ore dispatched
to the Plants ex Sishen
Mine during that month." In terms of
clause 15.1 the parties agreed that the total tonnage of iron ore to
be supplied by Sishen
to ISCOR from the Sishen Mine during any
contract year would not exceed 6.25 million dry metric tonnes.
Clause 19 dealt with the
nature of the relationship between Sishen and ISCOR. In clause 19.1
both Sishen and ISCOR bound themselves
not to "in any way
represent or do anything to create the impression that the one acts
as agent or partners for the other."
Clause 19,2 was to the
effect that Sishen's appointment by ISCOR was "as an independent
contractor, to mine ISCOR's undivided
share of the iron ore on the
properties and to beneficiate such ore to comply with the
specifications as set out in Annexure "B"
to the
agreement."
On the 17
lh
October 2002 the Department of Minerals and Energy issued to ISCOR an
authorisation to mine, or
mining licence in terms of section 9(1) read with section 9(3) (d) of
the Minerals Act. Part of
what was written on the authorisation or licence document was:
"Permit NO ML 06/2002."
The office reference in the Department was also given. Then the
following appeared
immediately below the office reference:
"authorisation is hereby
granted under and subject to the provisions Q.f Minerals Act, 1991 to
ISCOR Limited identity or registration
numbers 1989/02 64/06
(hereinafter referred to as 'the bolder') of P.O Box 9229 PRETORIA
0001 to mine for Iron Ore and Quartzite
on various fanns.(see
attached annexure)."' A little below this appears the following
in the authorisation:
"Full name of the holder
of the right to the said mineral.
SISHEN
IRON ORE COMPANY PROPRIETARY”
It must be noted that in the
mining authorisation issued by the Department of Minerals
and Energy the reference to
21. 4% (and, therefore also to 78. 6%) was reflected as a 21,
4% (and. therefore, also a
78. 6%) "share of the rights to Iron ore in and upon"' the
Table
I properties. Attached to the
permit or authorisation was a document which at the top
reflected the following:
"a 0.214000 (nought
comma two, one. four, nought, nought, nought) share of the rights to
iron ore in and upon" and thereafter
then followed a list of the
Table 1 properties.
On the same day the
Department issued to Sishen a similar permit or authorisation. The
permit number for Sishen was reflected as
ML 07/2002. The office
reference was MC 5/3/2/106. All material information on the permit
was the same as in ISCOR's permit.
[25] On the 13
lh
of November 2001 the Department of Minerals and Energy approved "the
division of the rights to the minerals into undivided
shares in
favour of Sishen Iron Ore Company (Proprietaiy) Limited and ISCOR
Limited as requested." This appeared in a letter
that was sent
to Sishen and ISCOR by the Department informing them of the approval.
The approval read thus in part:
"APPROVAL TO DIVIDE THE
RIGHTS TO MINERALS By virtue of the powers delegated to me LOUIS
SELEKANE, DIRECTOR. MINERAL DEVELOPMENT;
NORTHERN CAPE REGION by the
Director-General of Minerals and Energy and in terms of section 20(3)
of the Minerals Act. 1991 (Act
50 of 1991) approval is hereby granted
that the rights to the minerals in respect of the under-mentioned
properties be divided
as follows: and thereafter it is written that
the division that was approved was one "into equitable undivided
shares between
ISCOR Limited 21.4% and Sishen Iron Ore Company(Pty)
Ltd 78,6%." This was said to be "all rights to iron"
The farms
mentioned are the Table 1 properties.
[26] Pursuant to the
agreement between ISCOR and Sishen, Sishen conducted mining
operations on the Table 1 properties in accordance
with the agreement
between itself and ISCOR. It is common cause that during the period
before 1 May 2004 Sishen and ISCOR were
co-holders or joint-holders
of undivided shares in the right to iron ore in, under and on the
Table 1 properties.
[27] ISCOR"s obligations
under the agreement (i.e. the agreement of 23 October 2001) were in
essence taking delivery of the
iron ore tonnages and paying SIOC in
accordance with the agreement. On 5 December 2001 a Certificate of
Rights to Minerals K47/2001
RM was registered in the Deeds Registry
in favour of ISCOR. As a result of that, the rights to all minerals
(excluding gold, silver
and precious stones) were severed from the
ownership of the properties and were from then on held by ISCOR under
a separate title.
[28] By Deed of Transfer
T3280/2001. which was registered on the 05
th
December
2001, ISCOR ceded to Sishen an undivided 78, 6% share of the rights
to iron ore in and upon the properties and the rights
to all other
minerals excluding gold, silver and precious stones. In the result
Sishen and ISCOR were vested with personal rights
(iura in personam)
vis-a-vis each other in respect of the undivided real right by reason
of the provisions of the agreement.
[29] From about the beginning
of 2002 Sishen was conducting mining operations on the Sishen mine
and complying with its contractual
obligations to ISCOR with regard
to the two parties' joint rights to iron ore on the Table 1
properties. On the I
s
' of May 2004 the Mineral and
Petroleum Development Act, 2002. ("the MPRDA") came into
operation. Sishen and AMSA had
anticipated that the time would come
when this Act would come into operation and had made this clear in
their agreement of the
23
rd
October 2001. The MPRDA
abolished the mineral rights system that was based on. essentially,
the owner of the land being, first
and foremost, the owner of the
minerals occurring in and on his land. The MPRDA made the State the
grantor of mineral rights. Anyone
seeking to have rights in minerals
had to apply for the grant of rights (such as the prospecting right,
the mining right and others)
and the State, through the Minister, was
given the power to grant or refuse such rights.
[30] Sishen points out in its
founding affidavit that historically and immediately prior to 1 May
2004 when the MPRDA took effect,
it was "conducting mining
operations in respect of its mining licence in respect of its own
78,6% undivided share on behalf
of itself." Sishen then goes on
to say that AMSA "was conducting mining operations in respect of
its mining licence in
respect of its 21.4% undivided share on behalf
of itself through SIOC as AMSA's mining contractor for which SIOC was
paid a contractors
fee being the contract cost (being the cost of
exploration, mining, benetkiation. stockpiling and handling) plus
3%." Sishen
pointed out in paragraph 22 of its founding
affidavit that "such mining operations were being conducted on
the mining right
area of the Sishen Iron Ore Mine, which included
inter alia the SIOC properties and the 1CT properties(exclusive of
remaining extent
of portion 4 Sacha 468."
[31] Item 7 of Schedule II of
the MPRDA provided in effect that "old order mining rights"
would
continue for five years from
date of the commencement of operation of the MPRDA. That date,
as already pointed out, was 1
May 2004. Item 7 also provided that during that period of five
years a holder of such right
had to lodge such right for conversion into in effect a mining right
under the MPRDA. Item 7(8)
further provided that, if such right was not lodged within the five
year period for conversion,
it would "cease to exist." An "old order mining right"
is defined in
item 1 of Schedule II as
meaning:
"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.” In
this regard it needs to be pointed out that the Director: Mineral
Development had issued two identical documents
to both ISCOR and
Sishen in which the holder of the mining authorisation was reflected
as ISCOR and Sishen. When one has regard
to the rights listed in
Table 2 to Schedule II, one sees that the lirst right listed under
Table 2 to
Schedule II is: "the
common law mineral right, together with a mining authorisation
obtained in connection there-with in terms
of section 9(1) of the
Minerals Act.
”
The right which Sishen and AMSA held
jointly in the iron ore in the Table 1 properties was a common law
mineral right. Accordingly,
their joint right fell within the ambit
of "the common law mineral right" contemplated under
category 1 of Table 2 to
Schedule II. The mining authorisation that
was issued to AMSA and Sishen as '"holder' was a mining
authorisation issued in
terms of section 9(1) of the Minerals Act.
Such mining authorisation was contemplated in the second part of the
right falling under
Table 2 to Schedule II of the MPRDA.
[32] The "old order
mining right" was required to be lodged with the Regional
Manager of the Department of Mineral Resources
together with, among
other things the prescribed particulars of the holder and other
information (see item (7(2)). Item 7 (3) of
Schedule II provides that
the Minister "must convert the old order mining right into a
mining right if the holder of the old
order mining right" has
met certain requirements stipulated in item 7(3) (a) to (e). Item
7(5) provides that the holder "must
lodge the right converted
under subitem (3) within 90 days from the date on which he or she
received notice of conversion at the
Mining Titles Office for
registration and simultaneously at the Deeds Office for
deregistration of the old order mining right as
the case may be."
Item 7(7) provides that upon the conversion of the old order mining
right and the registration of the mining
right into which it was
converted, the old order mining right "ceases to exist."
Item 7 (8) provides that "if the
holder fails to lodge the old
order mining right for conversion before the expiry of the period
referred to in subitem (1), the
old order mining right ceases to
exist."
[33] Sishen says that on the
13"' December 2005, which was still within the five year period
within which old order mining
rights had to be lodged, it "duly
lodged
its old order mining right in respect of a 78, 6% undivided
share
for conversion" (underlining supplied). It must be
noted that in describing what it lodged on the 13 December 2005.
Sishen
says that it lodged its "old order mining right in
respect of a 78,6% undivided share for conversion "and it does
not
say it lodged its 78,6% undivided share in the right to iron ore.
I shall deal with the significance hereof later in this judgment.
[34] In the forms used for
the lodgement of an old order mining right which Sishen used to lodge
its old order mining "right"
there is a section in which
Sishen was required to provide "the registered description of
the land, area or offshore blocks
to which this application relates
together with respective SO diagrams." Sishen listed over 20
farms. This included both Table
I properties and Table 2 properties.
In the space in which Sishen had to specify the relevant minerals in
the lodgement documents,
it specified iron ore and aggregate. The
method of mining was specified in the form as "open cast."
There was also an
area in the form where the lodger was required to
state the period "for which the right [was] required".
Sishen specified
30 years in this regard.
[35] On the 5"' of May
2008. that is about two and a half years after the lodgement, the
Director General of the Department
of Mineral Resources addressed a
letter of that date to Sishen. The letter was annexed as annexure
"F10" to Sishen's
founding affidavit. The subject of the
letter was reflected as follows:''Application for the conversion of
an old order mining right
into a mining right in terms of item
7(2) in Schedule II. (Transitional Arrangements) of the
Mineral and
Petroleum Resources Development Act, 2002
on various farms (Annexure
A), administrative district of Hay" (my underlining). The body
of the letter read as follows:
"1. This is to confirm
that your above-mentioned application for the mining of iron ore and
quartzite in respect of the above-mentioned
properties has been
granted in terms of
section 23(1)
of the Mineral and Petroleum
Resources Development Act,2002(Act 28 of 2002). A copy of a standard
mining right similar to the one
that will be signed is attached
hereto only for your infonnation. This office will prepare the final
copies of
the right
to be signed.
2.Take note that the Regional
Manger will execute / conclude your
converted right
on the 31
a
July 2008.
3.Further note that in terms
of section 17(5) of the Act,
the mining right
comes into
effect on the date on which the Environmental Management Programme is
approved. In terms of section 25(2) mining activities
must commence
within a year of the effective date.
4.In the light of the
afbre-going you are requested to:
4.1ensure that all
outstanding matters regarding your application are finalised and that
relevant documents are submitted to the
office of the Regional
Manager one week prior to the date of execution.
4.2make arrangements for the
authorised representative(s) of your company to he present and attend
the signing of the mining right.
5. Note further that in
terms of section 25(2) (a), the signed executed
mining right
must be lodged for registration at the Mineral and Petroleum
Titles
Registration Office within 30 days of the effective date.
6. Failure to comply may
result in the withdrawal, suspension or cancellation of
the
right
."
I have provided the
underlining to those parts of the letter that are underlined. I now
turn to refer to certain parts of the content
of the Converted Mining
Right that the Minister granted to Sishen.
Sishen's Converted Mining
Right
[36] In the converted Mining
Right document Sishen is referred to as "'the holder" as
opposed to "a holder".
It records what was lodged for
conversion as the holder's old order mining right.
[37] Clause 2 of the
Converted Mining Right deals with the "conversion of the old
order mining right." Clause 2 reads
as follows:
"Without detracting from
the provisions of item 7 of the schedule to the Act, sections 5 and
25 of the Act. the Minister converts
the holder's old order right and
grants to the Holder the sole and exclusive
right to mine and
recover the minerals in. on and under the mining area for the
Holder's own benefit and account, and to deal with,
remove and sell
or otherwise dispose of the minerals, subject to the tenns and
conditions of this mining right, the provisions
of the Act and any
other relevant law in force for the duration of this right."
[38] Clause 3 of the
Converted Mining Right document deals with the date of the
commencement, duration and renewal of the converted
mining right. In
terms of clause 3.1 the mining right commenced on the 11
th
November 2009 and, unless cancelled or suspended, in terms of clause
13 of the converted mining right document and or section
47 of the
MPRDA. it would continue to be in force for a period of 30 years
ending on 10 November 2039. Clause 3.2 requires "the
Holder"
to continue mining operations failing which the right could be
cancelled or suspended.
[39] Clause 7.1 of the
Converted Mining Right provides that "the Holder is entitled to
the rights referred to in section 5(2).(3)
and section 25 of the Act
and such other rights as may be contained in this mining right or
such other right as may be granted
to, acquired by or conferred upon
the Holder by any other applicable law."
[40] Clause 8 makes it a
condition of the conversion of "this old order mining right that
the Holder should dispose of all
minerals and/or product derived from
the exploitation of the mineral at competitive prices or non-export
parity prices." Clause
8 goes on and provides: "If the
minerals are sold to any entity, which is an affiliate or
non-affiliated agent or subsidiary
of the Holder or is directly or
indirectly controlled by the Holder, such purchaser must
unconditionally undertake in writing to
dispose of the minerals and
any products produced from the minerals at competitive market
prices."
[41] Clause 9 of the
Converted Mining Right document requires that the Minister's written
consent be obtained before
"[t]his mining right, a shareholder, an equity, an interest or
participation in the right or joint
venture or a controlling interest
in a company, close corporation or joint venture may be encumbered,
ceded, transferred, mortgaged,
let sublet, assigned, alienated or
otherwise disposed of."
[42] It needs to be
highlighted that nowhere in the Converted Mining Right document is
there any reference to a restriction or limitation
of the grant to
78.6% of the Converted Mining Right. The document refers to a
converted mining right which, of necessity, means
a full mining right
and not a fraction of a mining right. In fact clause 2 of the
Converted Mining Right states clearly, unequivocally
and
unconditionally that the Minister granted Sishen "the sole and
exclusive right to mine and recover the minerals in, on
and under the
mining area for the Holder's own benefit and account... ."'
There can simply be no doubt
that what the Minister granted to Sishen was not a 78.6% undivided
share in the converted mining right
to equate with what Sishen held
before the conversion but that she or her delegate granted Sishen
more than Sishen had held before
and granted it a full 100% right
which it did not jointly hold with anyone.
It is common cause that AMSA
did not itself lodge any old order mining right within the period of
five years prescribed for the
lodgement of an old order mining right.
Both Sishen and the Department of Mineral Resources believed that
AMSA should have lodged
"its" old order mining right within
the period if it did not wish to risk losing it in the light of the
provision of
item 7(8) of Schedule II to the MPRDA. The day on which
the five year period was to expire was the 30
lh
April
2009. That day was a Friday. The next day, a Saturday, was the l
a
May 2009. The 1
9
of May was a public holiday, it being May
Day.
[44] As the 30
th
of April 2009 approached. Sishen was very much alive to the fact that
AMSA had not lodged "its" old order mining right.
It was
Sishen's understanding that, if AMSA failed to lodge "its"
old order mining right within the prescribed five year
period, it
i.e. AMSA would lose "its" "old order mining right"
which would then become available to the Department
of Mineral
Resources to grant to someone else in terms of the MPRDA. Sishen was
very keen to secure such "mining right".
Sishen then began
to prepare the necessary documentation to apply for the grant to it
of that mining right should AMSA fail to
lodge "its" old
order mining right in terms of item 7 on or before 30 April 2009 and,
therefore lose such right.
[45] It would seem that close
to the 30
th
April 2009 or during the weekend of the 30
th
April to the 3
rd
of May 2009, Imperial Crown Trading also
learnt that AMSA had not yet lodged "its" old order mining
right for conversion
as the five year period approached its expiry
date. ICT also began preparing documentation necessary for it to
apply for a prospecting
right based on AMSA's 21, 4 % share of the
right to iron ore on the Table 1 properties. It is common cause that
by 24h00 on the
30"' April 2009, AMSA had not lodged any old
order mining right for conversion in terms of item 7.
[46] Sishen said in its
founding affidavit that "(s)ince AMSA failed to convert its old
order mining right as to a 21,4% undivided
share, [Sishen] applied
for a mining right for iron ore and aggregate in respect of the 21,4%
undivided share in respect of the
SIOC properties, as is set out more
fully below." Sishen also said in its founding affidavit that
"the fifth respondent,
Imperial Crown Trading 289 (Proprietary)
Limited made application for a prospecting right in respect of the
ICT properties. ICT's
application for a prospecting right was in
respect of iron ore and manganese ore although initially it was only
for diamonds."
[47] In paragraph 28 of
Sishen's founding affidavit Sishen pointed out that the above meant
that the Department of Mineral Resources
("the Department")
was, therefore, in receipt of two applications in respect of
substantially the same land: (i) Sishen's
application (the existing
land owner and mining operator) "in respect of the 21,4 %
undivided share" for a mining right
for iron ore and aggregate
in respect of the SIOC properties; (ii) the application of ICT which
Sishen described as a new comer,
with no previous interest in the
land or the mine, for a prospecting right for iron ore and manganese
ore in respect of the ICT
properties. In due course the Minister or
her delegate took the decision to approve ICT's proposed
environmental management plan
and to grant ICT's prospecting right
application". At that time no decision had been taken by the
Minister or her delegate
on Sishen's application for a mining right.
[48] For a long time after
ICT's application had been approved, Sishen's application remained
pending with no decision taken on
it. Sometime after Sishen had
instituted the present proceedings, the Department of Mineral
Resources declined Sishen's application
for a mining right "for
iron ore and aggregate in respect of the 21, 4% undivided share in
respect of the SIOC properties...."
I understand that Sishen has
either appealed against that decision or has instituted legal
proceedings to challenge the decision.
[49] By a letter dated 30
November 2009 Mr J.F Rocha. Deputy Director-General: Mineral
Regulation, advised ICT that ICT's application
for a prospecting
right to prospect for iron ore and manganese ore in respect of the
''properties" had been granted in terms
of section 17(1) of the
MPRDA. The above-mentioned properties were listed in the subject of
the letter as:
(a)the remaining extent of
Portion 1 ofthe Farm Sims No 462;
(b)the remaining extent of
Portions 3 and 4 of the Farm Gamagara No 541:
(c)the remaining extent of
Portion 1, and
(d)the remaining extent of
the Farm Sishen No 543 situated within the administrative district of
Kuruman.
In the second sentence of the
letter Mr Rocha wrote:
"Kindly note that the
farms Constantia No 309 and Simondium No 308 have been excluded as
there is a right granted on these
properties for the same minerals
that your company has applied for."
[50] In paragraph 4 of the
letter Mr Rocha told ICT that the prospecting right that was being
granted to it only applied "to
the undivided share in the old
older right which has not been converted in terms of Item 6 or 7 of
Schedule II." From this
it is clear that the prospecting right
which Mr Rocha purported to grant to ICT was based on the assumption
that the so-called
old order mining right that Sishen and the
Department believed AMSA should have lodged for conversion but did
not lodge had ceased
to exist with the result that, thereafter, a
corresponding mining right under the MPRDA had become available to
the Department
to grant to an eligible person who applied for it.
[51] In its letter of
application for the mining right, which was directed to the Director:
Mineral Development ofthe Department
of Mineral Resources. Sishen
requested that regard be had to a preamble that was enclosed with the
application letter "in
order to contextualise the current
application." Sishen's application letter was signed by Dr V.
Lickfold, Head of Geoscience
at Sishen. At the bottom ofthe letter
appeared a signature that looks like "Jozanna" as the
person who received the application.
Against that signature appeared
the date 01/05/2009 as the date on which the application was
received.
[52] In the preamble supporting Sishen's
application for a mining right. Sishen made amongst Others, the
following points:
(a)Sishen was the owner of
the various farms to which the application related.
(b)the application for a
mineral right was being made in terms of section 22 ofthe MPRDA.
(c)Sishen was the holder of a
converted new order mining right in respect of the properties (NC
5/3/2/106 MRC granted on 12 May
2008-"SIOC converted mining
right").
(d)the conversion of the
Sishen converted mining right was based on the preceding valid
old-order mining right: Sishen was
the holder of the undivided
shares (78,6% -the Sishen undivided share
in the right to
minerals
in terms of section 20(3) of the Minerals Act, 1991 on 13 November
2001 (see copy of approval attached)
It is in respect of this
78.6% undivided share that SIOC obtained an old order mining right
(Mining licence 07/2002 in tenns of
section 9 ofthe Minerals
Act.1991). In turn this mining licence served as the basis of the
SIOC converted mining right.
'YUnderling supplied).
Sishen then wrote:
"It therefore follows
that the SIOC converted mining right relates to the right to mine 78,
6% of the iron ore found in situ
on the properties."
Later in the preamble Sishen
explained that its "application accordingly" sought "the
grant to SIOC of the residual
21. 4% interest
to mine the iron
ore on the properties" (underlining supplied).
[53] It was after the
Department had granted ICT the prospecting right in respect of the
21, 4% undivided share that Sishen decided
to launch its application
in these proceedings to have certain administrative decisions that
had been taken by the Minister or
her delegate or by other officials
in the Department reviewed and set aside including the decision of
the Regional Manager of the
Department. Northern Cape, to accept
ICT"s application and the decision by the Minister's delegate to
grant ICT the prospecting
right. The respondents delivered answering
affidavits to oppose Sishen's application. Later Sishen filed its
replying affidavit.
[54] Sishen notified AMSA
that it would no longer continue to supply it with iron ore as
provided for In the agreement of the 23
rd
October 2001 at
cost plus 3% of the cost as had been agreed between the parties in
terms of that agreement. Sishen took the view
that AMSA's "loss"
of its 21.4% undivided share in the right to iron ore on the Sishen
Mine relieved it of its contractual
obligations to AMSA. AMSA took a
different view and insisted that Sishen was still obliged to perform
in terms of the agreement.
This resulted in a dispute between AMSA
and Sishen. That dispute was referred to private arbitration and is
still pending.
[55] Subsequently. AMSA and
Sishen brought separate applications for the joinder of AMSA in the
present proceedings. The respondents
opposed the two applications.
After hearing argument and considering the matter I granted the
application brought by Sishen and
ordered that AMSA be joined as
second applicant. AMSA was subsequently joined as second applicant.
In terms of the order joining
AMSA in these proceedings, AMSA was
allowed to deliver and serve an affidavit in support of the relief
that it would be seeking
in these proceedings. AMSA delivered and
served an application for, inter alia, certain declarator}' orders
and interdicts, Sishen
and all the respondents delivered answering
affidavits in support of their opposition to AMSA's application. The
gist of the relief
sought by AMSA is a declaratory order that Sishen
was granted a 100% mining right to iron ore upon conversion and that,
therefore,
it would be incompetent to grant anybody a mining right by
virtue of AMSA's alleged loss of its 21,4% undivided share in the
right
to iron ore in the Table 1 properties. If such an order was
made, it would mean that both Sishen's and ICT's applications based

on AMSA's alleged loss were incompetent in law.
[56] In an email dated the
08'
h
October 2009 from one Brenda Meyer, apparently
writing on behalf
of Sishen. to Patience Chuene
in the Department of Mineral Resources, it was inter alia said:
"Sishen Iron Ore Company
(Pty) Ltd ("SIOC") applied for a new mining
right of the
residual 21,4% interest to mine
iron ore on its properties
situated in the district of Kuruman (Kimberley region)"
(underlining supplied).
Patience Chuene appears to
have been Mr Rocha's secretary or persona] assistant.
[57] At this stage I do not
propose to set out more facts about ICT's application for a
prospecting right nor do I propose to set
out at this stage the
grounds on which Sishen seeks to have the grant ofthe prospecting
right to ICT reviewed and set aside. The
reason for this is that, as
there are two review applications (apart from two applications for
interdicts and an application to
strike out) before me one of which
is Sishen's and the other AMSA's. I am of the view that I should deal
with these two review
applications separately and that I should start
with AMSA's one. Should I grant AMSA's review application , I shall
have to consider
what the effect of that decision will be upon
Sishen's application. Accordingly, I turn to consider AMSA's review
application.
[58] In his opening address
before me , Counsel for AMSA submitted that the question that lies at
the heart of the dispute between
AMSA, on the one hand, and, Sishen
and the respondents including ICT. on the other, was whether or not
the MPRDA permits the holding
of a mining right or prospecting right
of less than 100%. He also submitted that another question that is
quite fundamental to
the resolution of the dispute between AMSA. on
the one hand, and, Sishen and the respondents, on the other, was
whether or not
the MPRDA permits the grant of more than one mining
right in respect of the same mineral and land. I shall start with the
first
mentioned question.
[59] AMSA contends that the
MPRDA does not permit the grant of less than a 100% prospecting right
or mining right whereas Sishen
contends that the MPRDA does. AMSA
submits that prior to the coming into operation of the MPRDA Sishen
and AMSA had, respectively,
a 78, 6% interest and 21, 4% interest or
undivided share in the right to iron ore in the Table 1 properties.
He submitted that
they did not each have a discreet separate and
whole right to the iron ore. Counsel for Sishen submitted that,
contrary to AMSA's
submission that Sishen and AMSA held a single
undivided right to iron ore in the Table 1 properties prior to the
coming into operation
of the MPRDA. there was clearly not a single
right. He submitted that there was a right registered in the name of
ISCOR (later
AMSA) and there was a different right registered in
Sishen's name and each right had different outcomes in law.
[60] Counsel for Sishen
submitted that Sishen's right entitled it to 78. 6% of the iron ore
extracted and AMSA's entitled AMSA to
21.4% of the iron ore
extracted. He pointed out that this matter is not an academic
exercise and that nobody had spent the millions
of rands which they
have spent and the legal fees which they had spent and would still
spend because they have an interest in mining
rights in general. He
submitted that what is at stake in this matter is "the right to
retain for one's own benefit what is
mined on SIOC properties and
that amounts to several billions of rands." He added: "That
is why ultimately we are here."
Counsel for Sishen went on to
say that the reason why AMSA was in this matter was "to
establish who has a right to the iron
ore that is mined [in the Table
1 properties] because the argument will no doubt be that, if we
somehow got their rights, then
we should really be giving it to them
at cost plus 3%. ICT says, rather boldly, that, despite the fact that
it has only a contested
prospecting right, it really has a right to
21 % of everything we are mining at the moment and then it goes on to
say, if we do
not have it. the State has it. The State does not say
itself but you can see that the focal point of all of this is really
who
has that right.'
1
[61] Counsel for Sishen
submitted that under the Minerals Act it was permissible for two
persons to be issued with two separate
prospecting rights or mining
rights in respect ofthe same mineral and land. In support of this he
referred to section 15 ofthe
Minerals Act. Counsel also submitted
that under the Minerals Act separate mining authorisations were
granted and this supported
his submission that, prior to the MPRDA,
both AMSA and Sishen each had a separate and discreet right, Counsel
for Sishen referred
me to the mining authorisations that were issued
to AMSA and Sishen. He submitted that the issuing of those documents
was preceded
by the splitting or division of the right. This must
have been a reference to section 20 ofthe Minerals Act and the
division that
was approved by the Director-General in favour of AMSA
and Sishen at the request of both AMSA and Sishen. However, Counsel
for
Sishen emphasised that the mining authorisations or pemiits were
licences. He also said that it was common cause that the mining

authorisations did not expand on the substantive rights. He said that
they licensed one to do things which the common law empowered
one to
do.
[62] Counsel for Sishen
submitted that prior to the MPRDA each party held a separate right to
minerals in undivided shares i.e.
undivided in relation to the
minerals in the land. Their right was registered in their name and
could be expropriated, transferred,
alienated in some way,
hypothecated and mortgaged. Counsel for Sishen submitted that "the
starting point is that you cannot
sensibly talk of a single right.
Those two rights could go their own way. "For example", he
continued, "if AMSA
abandoned its rights, it would probably
become "bona vicantid". He said that what had been one
right became two rights
because of the "two authorisations".
He said that there was a cession because the only way to transfer a
share of one's
right to minerals is through a cession because it is a
real right. It seems to me that it is appropriate to precede a
discussion
of the Minerals Act and the MPRDA with a discussion of the
legal position at common law.
The Common Law
[63] As to what the
principles are which governed the acquisition, transfer and joint
ownership of mineral rights at common law
there appeared to be no
material dispute among the parties. The content of common law mineral
rights was essentially that the holder
was entitled to enter upon the
property to which they related, to search for the minerals and, if he
found any, to sever them,
carry them away and dispose of them for his
own account. (Trojan Exploration Company v Rustenburg Platinum Mines
Ltd 1996(4) SA
499 (A) at 509A-510C;Anglo Operations Ltd v Sandhurst
Estates (Pty) Ltd
2007 (2) SA 363
(SCA) 371 E-F,paragraph 16;Du
Plessis J in Agri South Africa v Minister of Minerals and Energy case
no 55896/07, dated 28 April
2011 in the North Gauteng High Court).
Mineral rights included such rights as were reasonably necessary to
exercise them (Anglo
Operations Ltd v Sandhurst Estates (Pty) Ltd
2007(2) SA 363 (SCA) at par 21). The holder of a mineral right had a
real right (Du
Plessis J in Agri South Africa at par 22). The holder
of a mineral right only acquired ownership of the minerals once the
minerals
had been severed from the land and not before (Du Plessis J
in Agri South Africa at par 22).
[64] Mineral rights were
freely transferrable, could be sold, alienated in any way, used as
security and in general be dealt with
to the benefit of the holder
(Du Plessis J in Agri South Africa at par
22). The holder of mineral
rights was under no obligation, generally speaking, to exploit the
minerals.( Du Plessis .1 in Agri SA
at par 22). Mineral rights
constituted a valuable asset that the holder could bequeath to his or
her heirs - he or she could deal
with it to his or her advantage and
could retain it as an investment (Du Plessis J in Agri SA at par 30).
[65] Rights to minerals over
another's property were regarded at common law as real rights in the
nature of quasi-servitudes or
real rights sui generis binding on third parties. (Trojan case at
509;Anglo Operations Ltd v
Sandhurst Estates (Pty) Ltd
2007 (2) SA 363(SCA)
at 371E-F), In
the Trojan Exploration case
the Appellate Division described those rights in the following
termsat 509G-510A:
"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
transferrable- 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 ofthe
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 e.g. Node'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 land owner: only when the holder
of the rights 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." In general, when a cession of
mineral rights is effected, both the cedent and the
cessionary intend
that the transfer of the rights will ultimately result in the
transfer of the ownership in the minerals to the
cessionary if and
when the minerals are severed from the land. (Botha JA in Trojan
Exploration at 534 F-l).
[66] The immediate transfer
of the ownership of minerals is impeded when they still form part of
the
land. (Botha JA in Trojan at
534 F-l). Botha JA said in Trojan Exploration at 534 F-I:
"that impediment is
removed as soon as the ore containing the minerals is removed from
the land- A new movable res is then
created which is the object of
separate ownership. At that moment, in my opinion the ownership of
the ore vests in the cessionary,
as was envisaged in the act of
cession and this vesting takes place automatically by operation of
law, and by virtue of the act
of severance. It does not matter in my
opinion, how or by whom the act of severance is affected, whether by
natural forces or by
the holder of the rights or by the landowner or
by a thief. This is the only way of which 1 can conceive in which the
law can give
proper effect to the unique features of the reservation
of mineral rights and their transfer as recognised in this country.
If
this manner of passing or the acquisition of ownership does not
fit into any hitherto recognised circle, a new one will have to
be
found to cater for it." The severance of the right to minerals
from full ownership of the land on which such
minerals existed constituted
a subtraction from the full dominion of the owner of the land
and if there was an
irreconcilable conflict between the landowner and the holder of the
mineral rights, the latter's
rights would, as a general proposition, prevail. (Hudson v
Mann and Another
1950 (4) S A
485
(T) at 488).
[67] As in the case of
movable and immovable property, mineral rights could be held in
undivided shares (Erasmus v Afrikander Proprietary
Mines Ltd
1976 (1)
SA 950
(W) at 964G; Trojan Exploration case supra, at 525J). In the
case of mineral rights that were held in undivided shares, the joint

holder of mineral rights was entitled to exercise his rights provided
that in so doing he did not infringe upon the rights of the
other
joint holders. Each co-owner had to exercise his rights civililer
modo. The courts had a wide equitable discretion to regulate

conflicts between co-owners as to the exercise of their respective
rights including the partition of such rights, (Erasmus v Afrikaner

Proprietary Mines Ltd
1976 (1) SA 950
(W) at 964;
Trojan exploration case,
supra at 525J). A co-owner of land has no exclusive right to any
specific identifiable portion ofthe land
but has an undivided share
in the whole land (Franklan & Kaplan at 199).The same applies to
the holder of an undivided share
of rights to minerals (Franklin &
Kaplan at 199). The undivided share is held in respect ofthe mineral
rights as a whole. Franklin
and Kaplan say that ajoint owner of
mineral rights does not own an undivided share in any property but is
ajoint owner of a real
right in land, and not of land. (Franklin and
Kaplan at 200) They say that ownership in the minerals does not vest
in him until
the minerals have been severed from the soil and, when
so severed, they become the common property of the mineral right
holders.
(Franklin & Kaplan at 200 citing Erasmus's case at 960
as authority for the proposition). The holder of an undivided share
of mineral rights is entitled to dispose of his interest without the
consent ofthe other joint owners.
[68] At common law. ajoint
owner of property is entitled to make reasonable use of the common
property, proportionate to his interest
and in accordance with the
purpose or object for which the property is intended to be used.
(Franklin & Kaplan at 202 citing
Sauerman & Another v Schultz
1950 (4) SA 455
(O) at 460-1). He is. however, not entitled to
appropriate any specific or defined portion ofthe property for his
exclusive use.
I shall deal with the relevant provisions ofthe
Minerals Act. 1991 within the context of considering one of the
submissions made
by Counsel for Sishen. The relevant provisions ofthe
MPRDA will be discussed later.
[69] When one has regard to
Sishen's affidavit, its heads of argument and the oral argument
presented on its behalf in this matter,
one finds that it sometimes
says it had a 78,6% undivided share in the right to iron ore in the
Table 1 properties or it says it
had a right to the iron ore as to a
78,6% undivided share or it says it had a right to a 78,6% undivided
share in the iron ore
in the Table 1 properties. AMSA's position is
that Sishen had a 78,6% undivided share in the right to iron ore in
the Table I properties
and it i.e. AMSA had a 21.4% undivided share
in the same right to iron ore in the Table 1 properties. AMSA's
position in this regard
is stated clearly and unequivocally and left
no room for confusion whereas Sishen's position was subject to some
uncertainty as
a result of the various inconsistent statements it
made in this regard. I am here referring to the position of AMSA and
Sishen
immediately before the coming into operation of the MPRDA.
[70] In so far as it may be
necessary to decide exactly what Sishen's interest or share was
either in the
right to iron ore in the
Table 1 properties or in the iron ore itself, there can be no doubt
that the
correct position is that
Sishen had a 78,6% undivided share in the right to iron ore in the
Table 1
properties immediately before
the coming into operation of the MPRDA. When the position is
described on the basis, as
Sishen has so frequently done in its papers, that it had a right to a
78,6% undivided share in the
iron ore. it may mislead one into believing that Sishen held a right
as opposed to being a
co-holder together with AMSA in a single right to iron ore in the
Table 1
properties. In support of the
conclusion that Sishen held a 78,6% undivided share in the right to
iron ore in the Table 1
properties, reference can be made to the agreement that was concluded
between Sishen and ISCOR on
the 23"
1
October 2001 and to the statement of ciaim
that was
delivered by Sishen to the
Arbitration Tribunal in regard to the dispute between itself and AMSA
in March or April 2010. That
agreement makes it crystal clear that the reference to 78,6% is a
reference to a 78,6%
undivided share in the right to iron ore in the Table 1 properties or
SIOC
properties. Furthermore, in
par 8.2 of its statement of claim in the arbitration between itself
and
AMSA, Sishen put its case on
the basis that "
[
f|
he rights to iron ore
in
respect of the Sishen
properties were
subdivided
into undivided
shares between ISCOR (as to 21,4%) and SIOC (as to
78,6%)" (my
underlining). Another paragraph of Sishen's statement of claim reads:
"'ISCOR became the owner
of a
21,4% undivided share
("the 21,4% undivided share")
and SIOC
became the owner of a 78.6% undivided share
("the
78,6% share")
of the rights
pertaining to iron ore on the
Sishen properties" (my underlining). (See clause 8.3 of Sishen's
statement of claim in the arbitration
proceedings).
[71] Para 10.1 of Sishen's
statement of claim in the arbitration proceedings confirms that, even
immediately before the coming into
operation ofthe MPRDA on the l
sl
May 2004, Sishen held a 78,6% undivided share in the right to iron
ore in the Table 1 properties and AMSA similarly held a21,4%

undivided share in the rightto iron ore in those properties.
[72] Counsel for Sishen
submitted that, immediately before the coming into operation of the
MPRDA, the position was that Sishen
held a separate and discrete
right to 78.6% undivided share to iron ore in the Table 1 properties.
He said AMSA held a separate
and discrete right to 21.4% undivided
share in the iron ore in the Table 1 properties. On this proposition
there was a sharp dispute
between the parties because Counsel for
AMSA submitted that AMSA and Sishen did not each hold a separate and
discrete right. He
submitted that there was only a single rightto
iron ore in the Table I properties which both companies jointly held.
Of course,
AMSA's submission in this regard is supported by the
provisions of the agreement ofthe 23
ld
October 2001
referred to above and by Sishen's own statement of claim in the
arbitration proceedings.
[73] In support of his
submission Counsel for Sishen relied upon the Deed of Cession between
the parties in 2001, the fact that
two separate mining authorisations
were issued to both AMSA and Sishen in terms of section 9 of the
Minerals Act and 15 and 20
of the Minerals Act. The submission that
the cession of the 23
rd
October 2001 supports the
proposition that Sishen and AMSA held separate and discrete rights in
the iron ore is not borne out by
the terms of the cession or
agreement ofthe 23
rd
October 2001. The provisions of that
agreement are clear. They are to the effect that ISCOR and Sishen
became joint owners of undivided
shares in the right to iron ore in
the Sishen properties. Accordingly, Sishen's submissionin this regard
falls to be rejected.
[74] Before I deal with
sections 5. 9. 15 and 20 of the Minerals Act, I need to refer to the
definitions
of the word "holder"
in that Act. The word "holder" was defined in that Act as
follows:
" 'holder*'", in so
far as is relevant for present purposes, was defined as meaning, in
relation to the right to a mineral
in respect of land or any
undivided share therein, the owner of such land: Provided that-
(i) if the right to such
mineral or an undivided share therein has been
severed from the
ownership of the land concerned, the person in
whose name such
right or an undivided share therein is registered
in the Deeds
Office concerned, either by means of a separate deed
or by means
of a reservation in the title deed of the land concerned,
or
(ii) if the right to such
mineral or an undivided share therein vests in any other manner in a
person, that person shall be the
holder;
(a)...
(b)any permit, license,
permission, certificate, authorization or any other document issued,
granted or in force in terms of this
Act, the person in whose name it
has been issued, granted or in force in terms of this Act."
[75] Section 5( 1) seems to
be a confirmation of the content of a mineral right at common law. It
reads as follows:
"Right to prospect and mine for
and dispose of minerals
5 (1) 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 in accordance with section
6(1 )(b) or 9(1 )(b),
shall have the right to enter upon such land
or the land on which such
tailings are situated, as the case may
be, together with such persons, plant or equipment as may be required
for purposes of prospecting
or mining and to prospect and mine for
such mineral on or in such land or tailings, as the case may be, and
to dispose thereof"
my underlining.
[76] Section 5(2) precluded
anybody from mining or prospecting for any mineral without any
authorisation granted to him in accordance
with the Minerals Act.
Section 5(2)(a) and (b) made provision for two exceptions to the
prohibition. Section 5(3) authorised a
person mining for a particular
mineral under a mining authorisation to also mine for another mineral
and dispose of such mineral
in respect of which he was not the holder
if while mining for the mineral in respect of which he was the holder
ofthe right thereto,
he found the other mineral ""which
must of necessity be mined together with the mineral in respect of
which he is the
holder." There is a proviso to this general
provision. The proviso is that in such a case such person "'shall
compensate
the holder of the right to such other mineral for his
mineral to an amount mutually agreed upon or if no agreement can be
reached,
to an amount determined by arbitration in accordance with
the Arbitration Act. 1965 (Act No 42 of 1965). or by any competent
court
if the last mentioned person prefers the last mentioned
procedure..."A further proviso was that in the determination
ofthe
amount, section 12 ofthe Expropriation Act, 1975 would apply
mutatis mutandis as if an expropriation of property has taken place.

Sec 5 did no more than confimi the content of the common law right.
It did not support the proposition advanced by Sishen,
[77] Section 6 deals with the
issuing of prospecting permits. The Director: Mineral Development was
required to issue a prospecting
permit which authorised the applicant
to prospect for a mineral in respect of wh ich he was the holder of a
prospecting permit
or had acquired the written consent to prospect on
his own account, from such holder, in respect ofthe land or tailings,
as the
case may be, comprising the subject of the application
(section 6( I)). Once again, sec 6 does not support Sishen's
proposition
of a discrete and separate right.
[78] Section 9 dealt with the issuing of
mining authorisations. Section 9(]) read as follows: "Issuing of
mining authorisations
9(1) The Director: Mineral
Development shall, subject to the provisions of this Act. upon
application in the prescribed form and
on payment ofthe prescribed
application fee. issue a mining authorisation in the prescribed form
for a period determined by him
authorising the applicant to mine for
and dispose of a mineral in respect of which he —
(a)is the holder ofthe right
thereto: or
(b)has acquired the written
consent of such holder to mine therefor on his own account and
dispose thereof,
in respect of the land or
tailings, as the case may be, comprising the subject ofthe
application." Section 9(3) precluded the
issuing of a mining
authorisation unless the Director: Mineral
Development was satisfied with certain
matters and that certain conditions were met. Section 1 3
provided that a prospecting pennit or
mining authorisation "shall not be alienated, transferred,
ceded or encumbered by mortgage."
In their well-known work: A Guide to the Minerals Act,
1991, Kaplan and Dale describe the
nature of pemiits and authorisations under the Minerals Act
as being like a driver's licence. The
authors say that such authorisations are:
"...necessary to enable
the holder of common law rights to exercise them, much in the same
way as does a driver's licence,
namely, the relevant person obtains
his rights of ownership or the use ofthe vehicle at common law, but
then in order to exercise
such common-law rights must obtain a
licence or authorisation entitling him to do so..." (see par
1.5.5 and 4.4.2)
[79] It is clear from the
provisions of both section 6 (relating to the issuing of prospecting
permits) and section 9 (relating
to the issuing of mining
authorisations) that each one of them could only be issued in favour
of a person who was either the holder
of a mineral right already or
who had acquired the written consent from such holder to mine for his
own account and dispose ofthe
mineral. At common law such a person
already had a right to mine for the mineral. Accordingly, the
prospecting permit and the mining
authorisation simply regulated the
exercise of the right to mine which the holder of a mineral right
already had. At common law
each joint holder of a mineral had the
right to mine as long as he did so civiliter modo. In the case of
AMSA and Sishen. if the
Minerals Act had not been there, each one of
them would still have had a right to mine for iron ore in the Table 1
properties and
yet it could not have been said that they had two
separate and discrete rights. Accordingly, the issuing of two mining
authorisations
to AMSA and Sishen under sec 91 (1) of the Minerals
Act did not give AMSA and Sishen any new right which they did not
already have.
[80] As to section 15 of the
Minerals Act. its heading is reflected as:
"Restriction on issuing of more
than one prospecting permit or mining authorisation in respect of the
same mineral and land"
Section 15 read as follows:
""No prospecting
permit or mining authorisation shall be issued in respect of any
mineral in respect of land or tailings,
as the case may be, if a
prospecting pennit or mining authorisation has already been issued in
respect of such mineral and land
or tailings, as the case may be,
unless the Director: Mineral Development is satisfied that such first
mentioned issuing will not
detrimentally affect the object of this
Act in relation to optimal exploitation of minerals or
rehabilitation."
[81] It seems to me that
Counsel for Sishen's reliance upon the provision of section 15 of the
Minerals Act for the proposition
that Sishen had a separate and
discrete right immediately before the commencement of the MPRDA is
misplaced. Section 15 did nothing
more than lay a general rule of one
land, one mineral and one mining authorisation or prospecting permit
unless the Director: Mineral
Development was satisfied in a
particular case that the issuing of a second prospecting pennit or
mining authorisation would not
detrimentally affect the need for the
optimal exploitation of minerals or rehabilitation. Section 15
provided no support for the
proposition that the issuing of a
prospecting permit or mining authorisation created a separate and
discrete right to the mineral
to which it related. Accordingly,
reliance upon section 15 in support of Counsel for Sishen's
contention must be rejected. Section
16 reveals that a person who had
been issued a prospecting pennit or a mining authorisation lost the
prospecting right or mining
authorisation if he ceased to be the
holder ofthe mineral right or if the written consent issued to him by
the holder to prospect
or mine on his own account lapsed. Sec 16
emphasises the point I made earlier that the permits and
authorisations issued under
the Minerals Act were issued if the
person already held a common law mineral right. If you did not
already hold such a right, you
did not qualify to be issued with such
a mining authorisation or such a permit. 1 now turn to section 20.
[82] Counsel for Sishen also
relied upon the provision of section 20 ofthe Minerals Act to support
his contention that Sishen held
a separate and discrete right to iron
ore in the Table I properties when the MPRDA came into operation.
Section 20(1) of the Minerals
Act read as follows: "Restriction
on dividing of rights to minerals
20. (1) Notwithstanding
anything to the contrary contained in any law. but subject to
sections 71 (2) (a) and 73 of the Deeds Registries
Act, 1937 (Act No
47 of 1937) no deed which, if it would be registered, would give
effect to-
(a)the division of any right
to any mineral or minerals in respect of land among two or more
persons into undivided shares; or
(b)an increase in the number
of holders of undivided shares in any right to any mineral or
minerals in respect of land.
and if such right has been
severed from the ownership of the land concerned or is about to be so
severed upon the registration of
such deed, shall be registered by
the registrar of deeds concerned unless the Director-General has
under section (3) in writing
approved such division or increase."
Section 20(1) deals with the
division of any right to any mineral or minerals in respect of land
into undivided shares or an increase
in the number of holders of
undivided shares in any right to any mineral or minerals in respect
of land. Section 20(1) says a division
of any right to a mineral or
minerals in respect of land into undivided shares shall not occur
unless the written approval of the
Director-General is obtained. That
is in relation to a right to a mineral which right has been severed
or is about to be severed
from the ownership of the land. Section
20(2) makes provision for any person who desires trie approval of the
Director-General
in terms of section 20(1) to lodge an application
with the Director-General. Section 20(3) confers upon the
Director-General the
power to approve or not to approve the division
contemplated in section 20(1).
[83] It is important to point
out that what section 20(1) provides for is not the partition of a
right to a mineral which is the
way to bring about separate and
discrete rights and which is the way of terminating a co-ownership of
a right to mineral that is
jointly owned. In my view sec 20 does not
provide for a legal framework for the termination of a co-holdership
or joint ownership
of rights to minerals.
[84] Counsel for AMSA
submitted that, when one has regard to the fact that a mining
authorisation authorised the mineral holder
to mine and dispose of a
mineral as defined in the Minerals Act in respect of the land
comprising the subject of the application
and that it authorised the
holder thereof to mine for a certain defined mineral or minerals on
such land, such an authorisation
to mine could not be split between
holders of undivided shares because it would be impossible to mine
78.6% of every molecule.
[85] In so far as Sishen's
case includes the proposition that it had a right to mine its 78.6%
undivided share of the iron ore.
this must be rejected. As Counsel
for AMSA correctly submitted this cannot happen at a practical level.
How can you mine 78. 6%
of every molecule of the mineral in the whole
mining area? The position is that at common law a joint-owner of a
right to a mineral
was entitled to mine the whole area concerned
subject to acting reasonably bearing in mind his interest. As Kaplan
and Dale point
out the mining authorisations were there to ensure
that a joint owner of a right to a mineral could exercise the joint
right to
mine without having to obtain the consent ofthe other
co-owners.
[86] In the light of all the
above I conclude that AMSA and Sishen were co-holders of.
respectively, a 21.4% undivided share and
a 78.6% undivided share in
the right to iron ore in the Table 1 properties and that Sishen's
contention that the two companies
each held a separate and discrete
right to iron ore falls to be rejected. I now turn to consider the
issue of the conversion of
old order rights under Schedule II to the
MPRDA.
[87] As I have already said
before, the MPRDA came into operation on the P
1
May 2004.
Schedule II to the MPRDA dealt with transitional arrangements. Item
7(1) of Schedule 11 ("the Schedule"') provided
that,
subject to sub-items (2) and (8). any old order mining right in force
immediately before the MPRDA took effect continued
in force for a
period of not exceeding five years from the date on which the MPRDA
took effect subject to the terms and conditions
"under which it
was granted or issued." Prior to the MPRDA there was no concept
of an old order mining right. That term
came with the Schedule.
However. I agree with Counsel for Sishen that one must have regard to
the context in understanding the
use of the term. The context
suggests that what item 7(1) contemplated were the rights which,
after the coming into operation ofthe
MPRDA. would fall within the
definition ofthe "old order mining right". Those are the
rights which item 7(1) sought to
preserve for at least five years
from the date of the coming into operation of the MPRDA subject to
subitems (2) and (8) of item
7 to the Schedule. I also agree with
Counsel for Sishen that the common law mineral rights were not
granted or issued. Accordingly,
the reference in item 7( 1) to such
rights having been granted or issued is awkward, to say the least.
[88] Item 7(2) ofthe Schedule
enjoined "a holder of an old order mining right" to lodge
the right for conversion within
the period of five years referred to
in subitem 1. Item 7(8) provided that, if a holder of an old order
mining right failed to
lodge the old order mining right for
conversion within the prescribed period of five years, "the old
order mining right ceases
to exist." In terms of item 7(3) the
Minister was required to convert the old order mining right into a
mining right if the
holder of the old order mining right complied
with certain conditions or requirements prescribed by item 7(3) of
the Schedule.
Item 7(3) uses the words "must convert" to
describe what the Minister is required to do after a holder of an
"old
order mining right" had lodged the right for
conversion within the period prescribed by item 7(1) but the Minister
was only
required to convert the old order mining right into a mining
right if the holder of the "old order mining right" met
five requirements prescribed in item 7(3).
[89] I agree with Counsel for
Sishen that the Minister had no discretion but to convert the "old
order mining right" into
a "mining right" but, in my
view, that obtained only if the holder of the old order mining right
had met all the five
requirements prescribed by item 7(3). During
argument Counsel for Sishen presented his argument on the issue of
the conversion
of an old order mining right into a mining right in a
manner that may have created the impression that, once a holder of an
"old
order mining right" had lodged the right for
conversion, there was no basis on which the Minister could refuse to
convert
the "old order mining right". That there was no
basis upon which the Minister could refuse to convert an " old
order
mining right" into a mining right once it had been lodged
by a holder in terms of item 7(1) is not borne out by the provisions

of item 7(3). On the contrary, it is clear from the five requirements
laid down in item 7(3) that the Minister was not required
to convert,
and, therefore, could refuse to convert, an "old order mining
right" into a mining right if any one or more
of the conditions
prescribed therein was not met. Accordingly, while the criticism
levelled by Counsel for AMSA on Counsel for
Sishen's submission on
item 7(1) read with subitem (3) that the road along which he sought
to lead us was one with neither "traffic
cops" nor traffic
lights may have been justified in so far as Counsel for Sishen's
submissions suggested that the Minister
could never refuse to convert
an "old order mining right" under item 7(3), the criticism
could not fairly be directed
at the provision of item 7(3) because
under item 7(3) the Minister could refuse to convert an "old
order mining right"
into a mining right if any one ofthe
conditions therein prescribed was not met.
[90] Under item 7(1) read
with (3) a holder would, so to speak, surrender a so called "old
order mining right" and be
in effect issued with a mining right
if he met the conditions prescribed by item 7(3). Item 7(4) provided
that no terms and conditions
attached to an "old order mining
right" prior to the MPRDA would continue to apply if they were
contrary to any provision
of the MPRDA or the Constitution. The
mining right which a holder of an old order mining right acquired
upon conversion was a right
that survived beyond the period of
application ofthe provisions ofthe Schedule. Accordingly, the
ordinary provisions of the MPRDA,
as opposed to the provisions ofthe
Schedule, govern the mining right. There would be a few provisions of
the Schedule such as those
of item 7(6) and (7) that would apply to
the mining right but, on the whole, the mining right would be subject
to the ordinary
provisions of the MPRDA. In this regard Counsel for
Sishen pointed out that the definition ofthe term "mining right"
in section 1 ofthe MPRDA did not apply to a mining right acquired
upon conversion because section 1 defines a mining right as meaning

"a right to mine granted in terms of section 23(1)" whereas
the mining right acquired upon the conversion of an "old
order
mining right" was not "granted", in the first place
and, in the second, not granted in terms of section 23(1).
Instead of
using the concept ofthe Minister converting an old order mining right
into a mining right, the Legislature could equally
have used the
concept of a holder surrendering his old order mining right whereupon
the Minister would grant the holder a new mining
right. I do not say
this on the basis that I criticise the use ofthe term "convert"
in item 7(3). 1 have no quarrel with
it. I say this only to point out
that, within the context of the grant by the Minister of a mining
right under section 23( I) and
the conversion of "an old order
mining right" under item 7(3) into a mining right, there may not
be much of a difference
in substance and effect provided the
different statutory requirements which must be met in each case are
not lost sight of.
[91] I have said earlier that
Sishen lodged an old order mining right in terms of item 7(1) for
conversion into a mining right within
the prescribed period of five
years from the day on which the MPRDA came into operation. The
Minister converted such old order
mining right into a mining right.
This was in May 2008. The five year period was to expire on the 30"'
April 2009. AMSA did
not lodge "its'" old order mining
right in terms of item 7(1) for conversion into a mining right. In
fact AMSA did not
lodge anything. In the meantime the end of the five
year period within which old order mining rights had to be lodged was
fast
approaching. In the last few days before the expiry of the five
year period and, in the case of ICT, even after the expiry of the

period. Sishen and ICT worked very hard to place themselves in as
good a position as possible to be ultimately granted a mining
right
or a 21.4% share of the mining right to iron ore in the Table I
properties which they believed became available as a result
of AMSA's
failure to lodge its 21.4% undivided share in the right to iron ore
on those properties. It was within this context that
Counsel for AMSA
pointed out during his address that Sishen had stabbed AMSA in the
back to which, in due course, Counsel for Sishen
retorted that nobody
had stabbed AMSA in the back but that AMSA had slept on the wheel as
the period of five years came and went.
[92] AMSA's case is that
Sishen did not lodge a 78,6% undivided share in the right to iron ore
in the Table 1 properties for conversion
but it lodged the whole
right i.e a 100% right to iron ore in the Table 1 properties and that
the Minister or her delegate also
converted the whole right and not
78.6% and that the mining right which Sishen then acquired upon
conversion was not a fraction
of a mining right, i.e. not a 78,6%
share of a mining right but a full 100% mining right. In its
application AMSA effectively sought
a declaratory order to this
effect and to the effect that, in the light of the grant to Sishen of
a full mining right to the iron
ore in the Table 1 properties, the
Minister could not and cannot competently grant anybody including
Sishen and ICT any mining
right to iron ore in the Table 1
properties. Sishen submits that upon conversion ofthe "old order
mining right" as to
78,6% of the share to the iron ore in the
Table 1 properties it lodged for conversion, it did not acquire
anything more than what
it had held before the conversion. Before
conversion Sishen held a 78. 6% undivided share in the right to iron
ore in the Table
1 properties. The submission by Sishen would drive
one to the conclusion that, on its understanding, it now holds 78.6%
undivided
share in the mining right that was. in effect, issued by
the Minister upon conversion. However, Sishen may be putting the
position
as being that upon conversion it acquired a mining right as
to 78, 6% undivided share ofthe iron ore in the Table 1 properties.
[93] Counsel for AMSA
submitted that, after Sishen had lodged a full 100% right to all the
iron ore in the Table 1 properties for
conversion, the Minister or
her delegate granted Sishen a full 100% right to all iron ore in the
Table 1 properties. Counsel for
AMSA pointed out that, after the
Minister had received Sishen's lodgment of the so-called old order
mining right, she or her delegate
ought to have taken steps to
establish what AMSA's position was because it was well-known to the
Department that AMSA held a 21,4%
undivided share in the right to
iron in those properties. He pointed out that, if the Department had
done that. AMSA would have
become aware that Sishen was lodging a
full 100% "old order mining right" and the issue of
possibly the old order mining
right being lodged jointly by both
Sishen and AMSA or Sishen lodging it alone with the approval or
agreement of AMSA on certain
agreed terms aad conditions woujd have
been addressed. Counsel for AMSA implied that AMSA found itself in
the position in which
it had to bring the application it has brought
in this Court partly because of the Department's failure to deal with
Sishen's lodgment
of a full "old order mining right"
properly and because the Department failed to consult AMSA on the
matter.
[94] Counsel for AMSA
submitted that, if he was right that the Minister or her delegate
granted
Sishen a full 100% mining
right to all the iron ore in the Table 1 properties, it would follow
that,
as a matter of law, there is
no mining right or 21,4% undivided share in the right to iron ore in
the Table 1 properties that
is available to the Minister to grant to Sishen or ICT or anybody for
that matter. In this regard
Counsel for AMSA also submitted that the Minister's decision to grant
Sishen a full 100% mining
right to all the iron ore on the Table I  properties was an
administrative act which,
right or wrong, stood until set aside. In support of this proposition
he
referred to the decision of
the Supreme Court of Appeal in Oudekraal Estates (Pty) Ltd v City of
Cape Town and Others 2004 (6)
SA222 (SCA). The decision to grant Sishen a full 100% mining
right has not been set aside
and therefore it still stands and will stand until set aside. In
Oudekraal the SCA found that,
in granting permission for the establishment of a township, "the
Administrator's permission
was unlawful and invalid at the outset." However, the SCA held
that
this did not mean in that
case that the Administrator's decision could simply be ignored. The
Court went on to say:
"But the question that
arises is what consequences follow from the conclusion that the
Administrator acted unlawfully. Is the
permission that was granted by
the Administrator simply to be disregarded as if it had never
existed? In other words, was the Cape
Metropolitan Council entitled
to disregard the Administrator's approval and all its consequences
merely because it believed that
they were invalid provided that its
belief was correct? In our view, it was not. Until the
Administrator's approval (and thus also
the consequences of the
approval) is set aside by a court in proceedings for judicial review
it exists in fact and it has legal
consequences that cannot simply be
overlooked." (Oudekraal case at para 26).
In the next two sentences the
SCA said:
"The proper functioning
of a modem State would be considerably compromised if all
administrative acts could be given effect
to or ignored depending
upon the view the subject takes of the validity of the act in
question. No doubt it is for this reason
that our law has always
recognised that even an unlawful administrative act is capable of
producing legally valid consequences
for so long as the unlawful act
is not set aside.”
[95] Counsel for AMSA
submitted that as a consequence of the grant of a full 100% mining
right by the Minister or her delegate to
Sishen. Sishen has moved
from a position where, prior to the conversion ofthe old order mining
right, it held a 78,6% undivided
share in the right to iron ore in
the Table 1 properties to a position where, after the grant to it of
a mining right by the Minister
or her delegate, it holds a full 100%
mining right to all the iron which it has to itself and mines for its
own benefit and no
longer shares with AMSA as it used to do before
the conversion. While this is what Counsel for AMSA had to say in
part in support
of AMSA's case, Counsel for Sishen, in opposing,
strange as it may sound, the proposition that, after conversion,
Sishen held a
100% mining right to the iron ore in the Table 1
properties, pointed out that AMSA had moved from a position where,
prior to 30
April 2009, it had held a 21.4% undivided share in the
right to iron ore in the Table 1 properties to a position where,
after 30
April 2009, it has nothing. He pointed out that life was
usually not as cruel as that and thought that AMSA's story that
Sishen,
which had previously held a 78,6% undivided share, was now,
according to AMSA, the sole owner of a 100% mining right, was
probably
not true. It seems to me that Counsel for Sishen was saying
that, if one adopted AMSA's analysis, AMSA's experience was too sad

to be true and Sishen's too good to be true. What makes this case
even stranger is that not only does Sishen not admit that it
now has
a 100% mining right, it actually opposes an application that has been
brought by AMSA for an order declaring that it, i.e.
Sishen now has a
sole and exclusive 100% mining right to the iron ore in the Table 1
properties. What is also very strange in Sishen
disputing that it now
holds a 100% mining right to iron ore in the Table 1 properties is
that it seems to have no problem with
keeping to itself all the
benefits or proceeds of alJ the Iron ore that it mines in the Table 1
properties. If Sishen does not
believe it now holds a 100% right to
the iron ore in the Table 1 properties, 1 wonder how it explains the
fact that all the proceeds
of the iron ore that it mines now come to
it and it does not share them with anybody.
[96] None of the Counsel who
appeared on behalf of Sishen and all the respondents disputed the
correctness of the proposition of
law advanced by Counsel for AMSA
that the grant by the Minister or her delegate of the mining right to
Sishen upon conversion was
an administrative act which, right or
wrong, lawful or unlawful, produced legal consequences and stands
until set aside. Of course,
the reason none disputed its correctness
is that the proposition is correct. What was disputed was that Sishen
had lodged a 100%
old order mining right and not a 78,6% share and
that the Minister or her delegate had granted Sishen, upon
conversion, a full
100% mining right to the iron ore in the Table 1
properties. In my view Sishen did not lodge a 78.6% undivided share
to the right
to iron ore for conversion. In my view Sishen lodged a
full 100% old order mining right. It did not in the documents that it
prepared
for lodgement make any reference to the conversion of a
78.6% share of anything. If there was a reference to a 78,6% it
appeared
in some annexure that contained a reference to such
percentage. Sishen simply prepared its documents in a manner which
made it
very clear that it was lodging a full old order mining right
with no restriction. The Director-General has admitted in his
answering
affidavit that the documents lodged by Sishen made no
reference to any restriction. In fact there is correspondence
attached to
AMSA"s replying affidavits which reflects that at
some stage Sishen was seeking an amendment of its converted mining
right
so as to introduce the restriction relating to 78,6%. This
conduct on the part of Sishen was inconsistent with the stance it
adopted
in its answering affidavit to AMSA's founding affidavit where
it said that it was unnecessary' for it to stipulate any restriction

in its lodgement documents. Strangely enough, in its application
against ICT, Sishen made the point that ICT did not in its
application
for a prospecting right indicate any restriction to 21.4%
but sought a full 100% prospecting right. This seems to reveal double

standards on Sishen's part because, when AMSA says its failure to
refer to a 78.6% share in its lodgement documents means that
it was
lodging a full 100% right as opposed to a 78.6% share, it responds by
saying that it was not necessary for it to specify-
78,6% but when
ICT failed to specify 21.4% as the share ofthe right to the iron ore
in respect of which it was applying or had
applied for a prospecting
right, Sishen takes the stance that ICT should have mentioned that it
was applying for a prospecting
right in respect of a 21.4% share.
Based on what Sishen had done in its lodgement documents and the
defence it put up against AMSA's
criticism that there was no need to
make a reference to a 78. 6% share to the right to iron ore. one
would have expected that Sishen
would have had no quarrel with ICT's
failure to refer to the 21, 4% share in its application for a
prospecting right on the basis
that such a reference was not
necessary.
[97] With regard to the
submission by Counsel for AMSA that the Minister or her delegate
granted
Sishen a full 100% mining
right to all the iron ore in the Table 1 properties, one only has to
read
the Converted Mining Right
(document), particularly clause 2 thereof. Clause 2 reads as follows:
"Without detracting from
the provisions of item 7 ofthe schedule to the Act, sections 5 and 25
of the Act, the Minister converts
the holder's old order right and
grants to the Holder the sole and exclusive
right to mine and
recover the minerals in, on and under the mining area for the
Holder's own benefit and account, and to deal with,
remove and sell
or otherwise dispose of the minerals, subject to the terms and
conditions of this mining right, the provisions
of the Act and any
other relevant law in force for the duration of this right."
This leaves no doubt that the
Minister or her delegate granted Sishen a full 100% mining right to.
among others, the iron ore in
the Table 1 properties and did not
grant it a 78, 6% share in such right. It was in 2008 when the
Minister granted Sishen this
100% mining right.
[98] The question which
arises is: what are the legal consequences of the tact that upon the
conversion of the old order right lodged
by Sishen. the Minister
granted Sishen a sole and exclusive full 100% mining right to the
iron in the Table 1 properties? It seems
to me that, since the
Minister granted Sishen the sole and exclusive full mining right to
the iron ore in 2008, which was before
the expiry of the prescribed
live year period for the lodging of old order mining rights. AMSA
could not, therefore, competently
lodge its oid order mining right at
any stage after the grant to Sishen of the converted mining right but
before the expiry of
the five year period on 30'" April 2009. If
AMSA purported to lodge its old order mining right, the Minister
would not in
law have been able or competent to convert it into a
mining right as contemplated in item 7(3) of the Schedule. The
Minister could
not competently do so because there would have been no
mining right available to her into which to convert AMSA's old order
mining
right since she had already granted the fiill 100% mining
right to Sishen. She could not give what she did not have.
[99] If AMSA had attempted to
lodge an old order mining right after the Minister or her delegate
had granted Sishen the sole and
exclusive mining right to iron ore in
the Table 1 properties, the Minister or her delegate would not have
been able to legally
convert such right if the result was not going
to be that AMSA would upon such conversion acquire a mining right.
This would have
occurred even before the expiry of the five year
period if AMSA had attempted to lodge an old order mining right after
the grant
to Sishen of a full mining right. If AMSA wanted to have
the grant set aside on the basis that the Minister's conduct was
unlawful,
it probably would have succeeded. However, it need not
challenge it and can elect not to challenge it.
[100] Another consequence of
the fact that the Minister or her delegate granted Sishen a sole and
exclusive mining right to iron
ore in the Table 1 properties is that,
as long as that decision stands and has not been set aside, no-one
else can be granted a
mining right to iron ore in the Table 1
properties. That includes ICT. Sishen can also not be granted it
because, contrary to its
belief, it already holds not only the flill
mining right to the iron ore but one that the Minister or her
delegate has granted
on the basis that it is Sishen's and Sishen's
alone and for Sishen's sole and exclusive benefit.
[101] Apart from the fact
that the Minister's grant to Sishen of the mining right was on the
basis that
the mining right was solely
and exclusively Sishen's, there is also the hurdle created by
sections
I6(2)(b). 19(1 )(b) and (c)
and section 22(2) ofthe MPRDA to anyone being granted another
mining right to the iron ore
in the Table I properties. Section 16 deals with an application for a
prospecting right. Section
16(2) prescribes two conditions that must be met before the Regional
Manager may "accept an
application for a prospecting right..." Section 162(b) reads:
"(2) The Regional
Manager must accept an application for a prospecting right if-
(a)the requirements
contemplated in subsection (1) are met; and
(b)
no other person holds a
prospecting right, mining right, mining permit or retention permit
for the same mineral and land
(my underlining)".
Since Sishen already holds a
mining right for iron ore in the Table I properties, the Regional
Manager would be precluded by section
16(2)(b) from accepting an
application for a prospecting right for iron ore in the Table 1
properties. That hurdle would be insunnountable.
ICT seems to have
got away with that in this case because it was granted a prospecting
right to iron ore in effectively the Table
1 properties. In the light
of the conclusion that I have reached in this matter, the Regional
Manager had no power to accept ICT's
application for a prospecting
right. It also stands to reason that, if the conclusion I have
reached is correct, as I think it
is. then the Department should not
have granted ICT a prospecting right since the Department had already
granted Sishen a sole
and exclusive mining right to iron ore in the
Table 1 properties. Section 19(l)(b) of the MPRDA confers upon the
holder of a prospecting
right, subject to subsection (2). "the
exclusive right to apply for and be granted a mining right in respect
of the mineral
and prospecting area in question." Section 19(1
)(c) confers upon the holder of a prospecting right, subject to Uje
permission
referred to in section 20, "the exclusive right to
remove and dispose of any mineral to which such right relates and
which
is found during the course of prospecting."
[102] ICT is in the position
of a holder of a prospecting right as provided for in section 19(1)
and is
supposed to have the
exclusive rights provided for in section 19(l)(b) and (c) and yet its
"right"
to apply for a mining right
to iron ore in the Table 1 properties cannot be enforced as long as
the
Minister's decision to grant
Sishen the sole and exclusive mining right to iron ore in the Table 1
properties stands. Section
22(2)(b) of the MPRDA will also preclude the granting of a mining
right to ICT should it wish
to acquire a mining right to iron ore in the Table 1 properties which
I
have no doubt it wishes to
acquire. Section 22(2)(b) provides:
"(2) The Regional Manager must
accept an application for a mining right if-
(a)...
(b)No other person holds a
prospecting right, mining right, mining pennit or retention permit
for the same mineral and land."
Since Sishen already holds a
mining right to the iron ore in the Table 1 properties, no other
party can be granted a mining
right for the same mineral in the Table 1 properties. This is the
principle which Counsel for AMSA
submitted is part of the MPRDA which
can conveniently be said to be reflected in the phrase "one
right, one mineral, one land."
It can be called the "one
right, one mineral, one land" principle. To grant another party
a mining right when Sishen
has already such a right in respect of the
same mineral and land would violate this very Important principle of
the MPRDA. Parliament
has made its intention clear in the MPRDA in
this regard and effect must be given to its intention.
[103] It follows from the
above that AMSA's application must succeed and that the Minister or
her delegate has no power to grant
to any entity or person any mining
right to iron ore in the Table 1 properties as long as her grant of
the mining right to Sishen
stands. I accept that the result of these
proceedings is an unusual one in the sense that a party which
believes it does not have
a full 100% mining right is found to have
such a right and that finding is made pursuant not to that party's
application but pursuant
to an application brought by that party's
opponent in the dispute. In other words an order favourable to one
party is made pursuant
to that party's opponent making an application
for such an order. In my view, this is the result of the failure by
Sishen and AMSA
to speak to each other about the lodging of the old
order mining right, the failure by the Department to consult AMSA
before it
decided to grant Sishen a sole and exclusive mining right
and the actual grant by the Department to Sishen of a mining right
for
iron ore in the Table 1 properties. This matter could have been
handled better by all parties involved.
[104] From the above it will
be clear that AMSA has been successful and must be granted the main
orders that it seeks if not all
the orders it seeks. Sishen has also
been successful even though not on the basis of most of the grounds
upon which it had brought
its application. In this regard I do point
out that it did contend that the MPRDA precluded the granting of a
prospecting right
for and mining right to iron ore in circumstances
where someone else already held a mining right. That was also one of
AMSA's contentions.
I have not granted those orders which Sishen
sought which are incompatible with the finding I have made that
Sishen already holds
a 100% mining right to all the iron ore in the
Table 1 properties. I have also not granted orders that fall away
once it is accepted
that ICT's application for a prospecting right
was incompetent in law and the Minister had no power to grant ICT
either a prospecting
right for or a mining right to the iron ore in
the Table 1 properties. I record that Counsel for the respondents
associated themselves
to a very large extent with the submissions
advanced by Counsel for Sishen in regard to their opposition of
AMSA's application.
It is for this reason that I did not refer much
to their argument in this judgment.
[105] In so far as it may be
said that any of the two applicants' applications was brought
prematurely became the applicant concerned
did not exhaust internal
remedies as required by sec 7(2) (a) of the Promotion of
Administrative Justice Act, 2000 (Act 3 of 2000)
I am of the view
that exceptional circumstances exist which justify that such
applicant be exempted from such requirement. Indeed,
in my view it is
in the interest of justice that such exemption be granted. This
matter is very complex. The matter has generated
much interest
nationally and it is in the public interest that it be determined as
soon as possible.
[106] In so tar as various
parties failed to comply with certain rules of this court or orders
or directives for the delivery and
service of affidavits and have
applied for condonation, I am of the opinion that condonation should
be granted. The issues in this
matter are very important and I do not
think that any party should be denied the opportunity of being fully
heard. I accordingly
propose to grant condonation to all the parties
which needed condonation. With regard to Sishen's application to
strike out certain
portions of certain affidavits delivered by some
of the respondents, a separate judgment will deal with that
application.
[107] In conclusion I would
like to take this opportunity to record my indebtedness to all the
legal teams which represented various
parties in this matter for the
thorough manner in which they discharged their duties to their
clients and to this court. The legal
teams were led very ably by
Senior Counsel of enormous experience on all sides. Almost all the
legal teams included two or more
Senior Counsel and a number of
junior counsels. AMSA's legal team was led by Mr MD Kuper SC.Sishen's
legal team by Mr CDA Loxton
SC. the state respondents' legal team by
Mr WJ Vermeulen SC and ICT's team by Mr C E Puchrin SC. All legal
teams worked very hard
and Counsel who addressed the Court during
argument did so in a very able manner. Because ofthe view I have
taken of the matter
I have not referred to all their submissions in
this judgment. By this omission I mean no disrespect to them.
However, 1 do want
to assure all the parties that, before I came to
focus on the issues dealt with in this judgment, I spent much time
going through
their heads of argument, their written argument, my
notes, some of the authorities I was referred to and the transcript
of argument
which was provided to me. In other words, before reaching
the conclusion that I have reached in this matter. I considered much
more than this judgment may reveal.
[108] With regard to costs I
shall not at this stage make any order as to costs as no argument on
costs was addressed to me during
the hearing. It was agreed among all
the parties that I should rather give them an opportunity of
delivering written arguments
on costs once my judgment on the merits
has been handed down. 1 shall, therefore, invite the parties to
furnish written submissions
on costs whereafter I will make a
decision.
[109] In the result I make
the following order:
1. With regard to the application for a
review brought by the second applicant i.e. ArcelorMittal South
Africa Limited:
I.I It is hereby declared
that the first applicant, Sishen Iron Ore Company (Proprietary)
Limited ("SIOC"/ "Sishen")
became, with effect
from 5 May 2008, alternatively 18 June 2008. the exclusive holder of
a converted mining right ("SIOC's
converted mining right")
in terms of item 7(3) of Schedule II to the Mineral and Pstroleum
Resources Development Act. 2002
("MPRDA") for iron ore and
quartzite in respect of the Properties ("the Properties")
comprising the Sishen
Mine ("the Sishen Mine") as described
in Annexure "A" hereto; and
1.2 in consequence of the
order in 1.1 above, it is hereby declared that any decision taken to
accept or to grant any application,
lodged after the date referred to
in 1.1 by any person (including SIOC and Imperial Crown Trading 289
(Proprietary) Limited ("ICT").
for a prospecting right,
mining right or mining pennit in respect of a so-called 21,4% share
(or any other share or shares) for
iron ore and quartzite in respect
of any or all of the Properties, as well as any execution and
registration of any such right
pursuant to such grant, is void ab
initio.
1.3 in so far as it may be
necessary, the second applicant is hereby exempted in terms of
section 7(2) (c) of the Promotion of
Administrative Justice Act, 2000
(Act No 3 of 2000) from the requirements of section 7(2) (a) and (b)
of that Act from first exhausting
its internal remedies before it
sought to have clause 8 of the tenns and conditions of Sishen's
converted mining right reviewed
and set aside.
1.4 the decision of the
First Respondent i.e. the Minister to include clause 8 of Sishen's
converted mining right among the tenns
and conditions of such mining
right is hereby reviewed and set aside and such clause is hereby
declared to be pro non-scripto.
2. With regard to the
application for review brought by the first applicant:
2.1 the decision of the First
Respondent or her delegate in terms of section 17 of the MPRDA to
grant a prospecting right to Fifth
Respondent relating to iron ore as
to a 21.4% share ("the prospecting right grant decision'') in
respect of the prospecting
area which is comprised of the properties
set out in Annexure "A" ("the ICT grant properties"),
all situate
in the Administrative District of Kuruman. Northern Cape
Province is hereby reviewed and set aside.
2.2 the whole of the
notarially executed prospecting right in favour of Fifth Respondent
and any registration thereof in the Mineral
and Petroleum
Titles
Registration Office pursuant to the prospecting right grant
decision is hereby set aside and the Second and/or Sixth Respondent
is directed to cancel any registration of such right.
2.3 the First Applicant is
hereby exempted in terms of section 7(2) (c) of the Promotion of
Administrative Justice Act. 3 of 2000
('"PAJA") from the
obligation to exhaust such internal remedies as may have be provided
to the Applicant by section 96
of the MPRDA in connection with the
abovementioned decisions.
3. As to the applications which had
been brought by the applicants for interdicts pending the
determination of the two review applications:
3.1The parties are directed
to deliver and serve brief written submissions on or before the 24
lh
January 2012 what order can appropriately be made with regard to them
in the light of the orders made in the review applications.
3.2Once the applicants in the
interdict applicants have complied with 3.1 above, the respondents
must deliver and serve their brief
written submissions on the same
issue referred to in 3.1 above on or before 1 February 2012.
3.3Should the applicants wish
to reply to the respondents brief written submissions, they must
deliver and serve their replies on
or before 7 February 2012.
4. As to applications for
condonation made by various parties tor failure to comply with the
Rules of this Court or directions issued
by this Court or by the
Deputy Judge President in connection with the deadlines for the
delivery and service of affidavits, condonation
is hereby granted to
such parties. In their written submissions on costs, the parties must
also deal with the issue of costs relating
to condonation
applications that were delivered and served in this matter.
5. As to the issue of costs in both the
review and interdict applications brought by the applicants:
5.1The First applicant must
deliver and serve its written submissions on or before 24 January
2012.
5.2The second applicant must
deliver and serve its written submissions on or before I February'
2012 and in doing so must deal with
the content of the First
applicants submissions on costs.
5.3The respondents must
deliver and serve their written submissions on costs on or before the
7
lh
February 2012.
5.4Should the first applicant
wish to reply, it must deliver and serve its written reply on or
before the 14
th
February 2012.
ZONDO. J
DATE OF HEARING
: 15-19 AUGUST
2011
DATE OF ORDER:
15 DECEMBER 2011
DATE OF FULL JUDGMENT
: 20
DECEMBER 2011
FOR THE FIRST APPLICANT
:
ADVC. LOXTON SC
ADV M. ANTROBUS SC
ADV K. HOFMEYER SC
FOR THE SECOND APPLICANT:
ADV M.D.KUPER SC
ADV A. SUBEL SC
ADV S. SYMON SC
ADV J. GILDENHUYS
FOR THE 1ST ,2ND, 3RD, 4TH, AND 6TH
RESPONDENTS:
ADV W. VERMEULEN SC
ADV T. KHATRI
FOR THE 5
th
RESPONDENT:
ADV C.E. PUCKRIN SC
ADV C.N. VAN HEERDEN
ADV E. WESSELS