De Beers Consolidated Mines Ltd v Ataqua Mining (Pty) Ltd and Others (3215/06) [2007] ZAFSHC 74 (13 December 2007)

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[2007] ZAFSHC 74
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De Beers Consolidated Mines Ltd v Ataqua Mining (Pty) Ltd and Others (3215/06) [2007] ZAFSHC 74 (13 December 2007)

IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Case
No. : 3215/06
In
the matter between:
DE
BEERS CONSOLIDATED MINES LTD
Applicant
and
ATAQUA
MINING (PTY) LTD
First
Respondent
THE
REGIONAL MANAGER,
Second
Respondent
FREE
STATE REGION, DEPARTMENT OF
MINERALS AND ENERGY
DEPUTY
DIRECTOR-GENERAL,
Third
Respondent
DEPARTMENT OF
MINERALS AND ENERGY
MINISTER
OF MINERALS AND ENERGY
Fourth
Respondent
_____________________________________________________
CORAM:
BECKLEY,
J
et
KRUGER,
J
_____________________________________________________
JUDGMENT
BY:
BECKLEY,
J
et
KRUGER,
J
_____________________________________________________
HEARD
ON:
3
& 4 DECEMBER 2007
_____________________________________________________
DELIVERED
ON:
13
DECEMBER 2007
_____________________________________________________
I
INTRODUCTION:
[1] The
present application (“the review application”) is but one of
several applications that were filed between the applicant
and the
respondents. In March 2006 the applicant applied for an order
(1) prohibiting the first
respondent from conducting any prospecting operations on the tailings
dumps situated on Subdivision 16 of
the farm Jagersfontein 14,
Magisterial District Fauresmith;
(2) prohibiting
the first respondent from removing any material from the tailings
dumps situated on Subdivision 16 pending the final
determination of
an application to be instituted for a declaratory order
(a) that the applicant is
the owner of the tailings dumps on Subdivision 16,
(b) that
the first respondent’s prospecting rights 7/2006 do not entitle the
first respondent to conduct prospecting operations
on the tailings
dumps on Subdivision 16;
(3) reviewing and setting
aside the first respondent’s prospecting right aforesaid as well as
further ancillary relief.
[2] During
the same month a second application was launched by the applicant
against the same respondents (application number 924/2006)
in which
the applicant applied for a rule
nisi
to be issued calling upon the first respondent to show cause why the
first respondent should not be prohibited forthwith, pending
the
final determination of the application instituted by the applicants
under application number 865/2006, which was enrolled for
the 23
rd
March 2006, from conducting any prospecting operations on the
tailings dumps situated on Subdivision 16 of the abovementioned farm.
The two aforementioned applications were referred to in the course
of the hearing of the review application as the “semi-urgent
application” (case number 865/2006) and the “urgent application”
(application number 924/2006). On the 27
th
July 2006 and in the present application (the review application) the
applicant applied for an order:
(i) declaring
that the applicant is the owner of the tailings dumps situated on
Subdivision 16 of the farm Jagersfontein 14;
(ii) declaring
furthermore that the prospecting right executed at Welkom on the 31
st
January 2006 issued under number 7/2006 to the first respondent in
respect of Subdivision 16 does not entitle the first respondent
to
conduct prospecting operations on the tailings dumps situated on
Subdivision 16; as well as a further order reviewing and setting
aside the decision of the third and/or the fourth respondents to
grant a prospecting right to the first respondent in respect of
the
said Subdivision as well as reviewing and setting aside Prospecting
Right 7/2006, executed pursuant to such decision.
[3] Various
defences were raised by the respondents in the papers. They will be
dealt with separately later in this judgment.
II
THE
HISTORY OF THE APPLICANT’S INVOLVEMENT IN JAGERSFONTEIN :
[4] In
May 1887, the mining operations at Jagersfontein were conducted by
the New Jagersfontein Mining and Exploration Company Ltd.
(“the New
Company”). During 1932, the New Company became part of the
applicant’s group and the applicant became its secretary.
Also in
1932, owing to the prolonged depression and flooding, mining
operations were closed down. Treatment of accumulated pulsated
tailings in the recovery plant continued up until the end of May
1932. As from January 1940, the applicant leased the New Company’s
assets and operated the mine for its own account. No mining was done
owing to the Second World War, but the re-treatment of old
pulsated
gravels was continued up to October 1940. Shortly thereafter the
mine was closed down and refitted and re-equipped with
a new
reduction plant. The reconditioned Jagersfontein Mine, which had
been shut down for 17 years, recommenced production in July
1949, and
continued until 1971, when the applicant ceased the mining operations
of the New Company. At the time, the applicant had
full knowledge of
the fact that the tailings dumps contained diamondiferous material
which could, when economic circumstances were
conducive to further
exploitation, again be the subject of further mining operations.
[5] It
is not disputed by the first respondent or the other respondents that
the applicant and the New Company entered into a notarial
deed of
agreement on the 28
th
November 1940 in terms of which all the assets of the New Company
were leased by the applicant including certain land, blue ground,
mines and mining claims. The agreement took effect retrospectively
on 1 January 1940. In terms of this notarial deed of agreement
the
applicant became entitled to work and exploit the mine and to carry
on the business of the New Company for its own account.
For that
purpose the applicant was entitled to, and did, take possession of
all the assets of the New Company which, however, remained
the
property of the New Company. In consideration for its undertakings,
the applicant became entitled to and could retain all the
profits of
the mine and business. The applicant had to give up possession of
the mine and other assets to the New Company at the
termination of
the agreement.
[6] It
is also not disputed that the applicant is the holder of the rights
to minerals in respect of Subdivision 16 by virtue of a
notarial deed
of cession of mineral rights, which notarial deed was registered on
the 20
th
September 1973 in terms whereof the cedent, the New Jagersfontein
Mining and Exploration Company Limited, ceded, assigned and
transferred
and made over to the applicant, amongst others, all
rights to all precious stones and all precious metals, base minerals,
oils etc.
in and under Subdivision 16 of the farm Jagersfontein 14.
The Jagersfontein mine ceased mining operations on the 28
th
May 1971 as the ore had been depleted and it was deproclaimed as a
mine on the 23
rd
June 1972. Thereafter the mine was stripped of all treatment plant
and equipment and the infrastructure for resuming underground
operations was removed and sold off. In terms of another notarial
agreement of cession executed on the 8
th
October 1973, the New Company ceded, assigned, transferred and made
over to and in favour of the applicant all its assets, whether
immovable, movable, incorporeal or otherwise. Accordingly it became
the owner of the tailings dumps situated on what is now known
as
Subdivision 16.
III
THE
AFFIDAVIT OF DR. LOCK:
[7] Before
we deal with the arguments relating to the review application, it is
necessary to deal with the application which was filed
on behalf of
the second, third and fourth respondents for leave to file an
affidavit of Dr. Lock, a chartered geologist. In his
affidavit, Dr.
Lock discusses a number of issues, including whether or not the
diamonds that may occur in the Jagersfontein tailing
dumps “are
natural diamonds all subjected to a geological process”, and
furthermore, whether or not they are “minerals in the
geological/scientific” meaning of the word. Having heard arguments
for and against the admissibility of the affidavit, we ruled
that the
affidavit should be allowed, and the reasons therefor would be
furnished at a later stage.
[8] The
contents of the affidavit did not appear
prima
facia
to
be relevant, as the question to be decided in the present case was
not whether the diamonds found in the tailings dumps are diamonds
(or
minerals) or not but whether they are diamonds or minerals
for
purposes of the interpretation of the Mineral and Petroleum Resourses
Development Act, Act No. 28 of 2002
(“the MPRDA”). It was, however submitted that, as the outcome of
these proceedings is likely to have far reaching consequences,
and
for that reason, as well as the importance of the application
generally, the affidavit should be admitted. It was, at the time
when the admissibility had to be decided, not possible to anticipate
whether certain paragraphs of the affidavit may be relevant
and
accordingly, mainly because of the importance of the matter and the
fact that the possibility could not be excluded that certain
paragraphs may be relevant, it was ruled to be admissible.
IV
WHETHER
THE DECISION OF THE THIRD AND FOURTH RESPONDENTS SHOULD BE SET ASIDE:
[9] At
the commencement of the proceedings before us, certain questions were
raised with Mr. Nthai regarding submissions in his heads
of argument.
Most of the questions related to the compliance or the
non-compliance of the second respondent with the statutory
requirements
in the MPRDA. After an adjournment, Mr. Nthai conceded
that the requirements had not been complied with and conceded that
the applicant
was entitled to an order in terms of prayer 3 of the
notice of motion, setting aside the decision of the third and fourth
respondents
to grant the prospecting right to the first respondent in
respect of Subdivision 16, and also setting aside the prospecting
right
7/2006 executed pursuant to such decision.
[10] The concession made
by Mr. Nthai is certainly justified, having regard to the following:
Regulation
3(3) of the Regulations published in Gazette dated the 23
rd
April 2006 requires that the application must be made known by,
inter
alia
,
“Notice in the Magistrate’s Court in a Magisterial District
applicable to the land in question”. The only allegations in
the
opposing affidavit of the second respondent in this regard are as
follows:
“
The
practice of the Regional Manager: Mineral Regulations and
Administration, Free State Region for all such applications,
including
the application by the first respondent, is to make known
by a notice (same as 01) in the Magistrate’s Court in the
Magisterial
District applicable to the land in question.
The
applicable Magistrate’s Court in the present instance was the
Magistrate’s Court, Jagersfontein. In the present case he did
not
opt for any other method of notification or publication in the
Government Gazette, in the Provincial Gazette or advertisement
or
national newspaper.”
[11] In
the replying affidavit, the deponent reacted as follows:
“
Third
respondent does not in fact state that in the present instance second
respondent did place a notice in the Magistrate’s Court.
The fact
that it was his practice to do so does not mean that he did in fact
do so in the present instance. Nor is such non-existen
t
statement confirmed by second respondent in his confirming affidavit.
To the extent that it is alleged that the second respondent
placed a
notice of the first applicant’s application ‘same as 01’ in the
Magistrate’s Court, Jagersfontein, it is denied.
The third
respondent certainly does not provide any proof of this allegation.”
[12] No
copy of the alleged notice is annexed to the papers. There is no
indication or confirmation by the relevant magistrate that
this
procedure had been followed. There is no indication as to how long
or as from which date such notice had been affixed in the
Magistrate’s Court. More importantly, no copy of such notice forms
part of the review record. It can therefore safely be assumed
that
the third respondent could not be satisfied that the requirements of
Regulation 3(3)(b) had been complied with. A further aspect
which
was raised with Mr. Nthai, was the question whether the provisions of
section 16 of the Act had been complied with. Section
16(4) requires
the regional manager, on acceptance of an application, within 14 days
of such acceptance, to notify the applicant
for a prospecting permit
in writing
(b) “To notify in
writing and consult with the landowner or lawful occupier and any
other affected party and submit the result of
the consultation within
30 days from the date of this notice.”
[13] The
letter that was addressed by the second respondent to the first
respondent on the 17
th
May 2005 does not comply with the requirements set out in subsection
16(4)(b) referred to above, and, moreover, allegations that
the first
respondent complied with the request, are also lacking. Furthermore,
Mr. Nthai conceded that, at the stage when the first
respondent’s
prospecting permit was issued on the 31
st
January 2006, the second respondent was fully aware of the
applicant’s contentions and its attitude regarding its rights in
respect
of the tailings dumps and the minerals therein. He conceded
that the applicant was in no uncertain terms an “affected party”.
Under the circumstances the second respondent had a duty to direct
the first respondent to notify in writing and consult with the
applicant as an affected party and this he did not do. It is clear
that the provisions of the Promotion of Administrative Justice
Act,
Act No. 3 of 2000, had not been complied with at all.
[14] After it was
conceded that the review application should succeed, Mr. Budlender,
who appeared on behalf of the first respondent,
was excused from
further attendance.
V
WHETHER
THE TAILINGS DUMPS ARE MOVABLES:
[15] The
first aspect that calls for consideration, is, having regard to the
cession of movable assets to the applicant, whether the
tailings
dumps were included in the cession. The applicant contends that the
tailings dumps are movables, and have not acceded to
the surface of
Subdivision 16. In this regard, the argument of Mr. Grobler, on
behalf of the applicant, was as follows:
[16] It
is common cause that the dumps originate from the ore mined by the
New Company and, since 1941, by the applicant. When the
New Company
severed the kimberlite ore from the earth, it became the owner of the
ore with the diamonds contained therein, such ore
then being movable
objects created through severance. After extracting certain
diamonds, the ore was deposited in what is now referred
to as the
tailings dumps on Subdivision 16.
[17] Whether
the ore, after processing, remains movable, is in dispute. The
argument advanced by Mr. Nthai, on behalf of the second,
third and
fourth respondents, was that the applicant had not proven that the
dumps are movables and did therefore not acquire ownership
in the
tailings dumps.
[18] To
decide whether it has been shown that the tailings dumps are movables
or not, it is necessary, firstly, to consider the allegations
made by
the deponents on behalf of the applicant in that regard, not only in
the review application, but also in the semi-urgent
application,
taking into account the fact that the contents of the allegations in
the semi-urgent application have been incorporated
by reference in
the papers relating to the review application. The applicant’s
contentions are summarised in paragraph 4.8 of
the founding affidavit
in the semi-urgent application as follows:
[19] The
tailings dumps contain kimberlite ore mined from the pipe which had
been treated for the recovery of diamonds by more or
less effective
recovery methods. It was always realised, through the history of the
mine, that recovery processes left diamonds
in the tailings and that
the tailings dumps still contained unrecovered diamonds. Therefore,
the tailings were not simply discarded
but kept for re-treatment as
and when technology became available whereby the diamonds could be
recovered economically and, sometimes,
under circumstances where
mining of the ore or blue ground could not take place in times of war
or economic depression. There was
therefore never an intention on
the part of the New Company or the applicant when it conducted the
business of the New Company for
its own account, to discard the
tailings and to attach them permanently to the land. The first
re-treatment occurred in 1903, and
thereafter at regular intervals in
1907, 1910, 1911, 1913, and annually from 1919 – 1932. Indeed, the
intention was clearly to
own and retain ownership of the mined
material which had been treated or which could at the time not be
treated for want of applicable
technology or for the adverse economic
circumstances at the time. The dump material can be easily
distinguished from the surface
of the ground on which it is situated
and can be removed without damaging the land. The intention was
always that the tailings dumps
are movables and could be treated as
and when necessary.
[20] These
contentions are not disputed at all in the opposing affidavit.
Certainly, the allegations in the opposing affidavit are
also
relevant, namely,
“
These
tailing dumps can by nature accede to the land... Their mere weight
could form an
effective attachment to the land... These dumps might have become
acceded to the land.”
[21] Nowhere
is it categorically denied that they have in fact remained movables,
as suggested by the applicant, and Mr. Nthai was
constrained to
concede that the opposing affidavits did not contain any allegations
to the contrary. He submitted that, despite
the fact that a denial
is lacking in the opposing affidavits, the factors to be taken into
account, in deciding whether the tailings
dumps were movables or not,
are:
the nature of the dumps,
the manner of the
annexation; and
the intention of the
owner of the movables at the time of annexation.
[22] In the opposing
affidavit filed on behalf of the first respondent, it is merely
stated that the first respondent does not admit
that the tailings
dumps remained movable assets. As in the case of the second to
fourth respondents, it is not denied that the tailings
dumps were
kept for re-treatment.
[23] Regarding
the nature of the tailings dumps and the manner of annexation, the
second to fourth respondents point out that the
tailings dumps are
enormous in size, similar in size to some of the surrounding natural
koppies in fact. That is also evident from
photographs annexed to
the papers. Despite their size, it does not seem to be in dispute
that the tailings dumps are distinguishable
from the surface of the
farm. It is also admitted that the tailings dumps are capable of
being removed without injuring the land.
[24] Mr. Nthai argued
that, taking the abovementioned factors into account, the tailings
dumps have indeed acceded to the land, having
been left there for
more than a century. His submission was furthermore that the nature
of the dumps and the manner of annexation
are pointers to the
intention of the owner of a movable, and that, only when the
attachment is inconclusive, the subjective intention
becomes of
overriding importance.
[25] This
approach is referred in
LAWSA
,
Vol. 18 (1
st
re-issue) par. 23, p. 27 as the “traditional approach”. The
“modern approach” is that suggested by Nienaber JA in
KONSTANZ
PROPERTIES (PTY) LTD v Wm SPILHAUS EN KIE (WP) BPK
[1996] ZASCA 28
;
1996 (3) SA 273
(SCA), namely, that the subjective intention or
ipse
dixit
is determinant, and that the nature of the material (
in
casu
tailings dumps) and the way in which the dumps were affixed, are, as
a question of degree, only indicative of the intention.
If
we accept, as Mr. Grobler submitted we should, that the intention was
that the tailings dumps should be regarded as movables, and
that the
ipse
dixit
is therefore determinant, the following question to be considered
then is whether the other factors (the nature of the tailings dumps
and the manner in which the dumps are affixed) are indicative of the
intention of the applicant at the time of the annexation, namely,
that they should be considered as movables. We are of the opinion
that the second and the third requirements are both compatible
with
and indicative of that intention.
Having
regard to the modern approach, and also having regard to the
undisputed allegations made in the founding affidavits, we are
satisfied that it has been shown that the tailings dumps are to be
considered as movables. Mr. Nthai conceded that, should we find
that
the tailings dumps are movables, the ownership in the tailings dumps
vests in the applicant. It therefore follows that prayer
1 in the
notice of motion should be granted.
VI
APPLICABILITY
OF THE MPRDA TO TAILINGS DUMPS: PARTIES’ SUBMISSIONS
1)
Origin
and genesis of the MPRDA
a)
Respondents’
submissions
[26] The thrust of Mr
Nthai’s argument is that this is remedial legislation. One must
look at its origin and genesis in order to
understand it properly.
Respondents contend that the traditional private ownership regarding
mineral law and mineral rights has
been replaced by the MPRDA,
recognising the internationally accepted right of the state to
exercise sovereignty over all minerals,
to acknowledge that the state
is the custodian of South Africa’s mineral resources (preamble to
MPRDA second paragraph). Unsevered
minerals, in whatever form they
are found, are mineral resources, and their exploration, prospecting,
mining and removal are regulated
by the MPRDA.
[27] In Roman-Dutch law
the ownership of the minerals lies in the
dominus
of the soil (
NEEBE
v REGISTRAR OF MINING RIGHTS
1902 TS 65
at 85). The principles relating to mineral rights can be
stated as follows:
The owner of the land is
the owner of the minerals in the land, until the minerals are
extracted from the land (
VAN
VUREN AND OTHERS v REGISTRAR OF DEEDS
1907 TS 289).
It is not possible to
transfer ownership of minerals not yet served from the land (
LE
ROUX AND OTHERS v LOEWENTHAL
1905 TS 742
at 745).
Once minerals have been
separated, they become movable, and form the subject of separate
ownership (
TROJAN
EXPLORATION CO (PTY) LTD AND ANOTHER v RUSTENBURG PLATINUM MINES LTD
AND OTHERS
[1996] ZASCA 74
;
1996 (4) SA 499
(A) at 509J – 510A).
[28] Constitution 24(b)
embodies the right “to have the environment protected, for the
benefit of present and future generations,
through reasonable
legislative and other measures that –
.....
(iii) secure ecologically
sustainable development and use of natural resources while promoting
justifiable economic and social development.”
[29] Against this
backdrop, respondents submit that the MPRDA was enacted, as is
evident from the preamble, to realise these constitutional
objectives. Any claim to mineral rights must be considered with due
regard to constitutional provisions. Limitations of rights
under the
common law should be developed to promote the spirit, purport and
objects of the Bill of Rights (Constitution 39(2)).
The argument is
that the property clause in the Constitution recognises reform of the
property regime as a legitimate reason for
regulatory limitation of
existing property rights. Reform-orientated deprivation of property
is just as much part of the purpose
of the property clause as the
protection of existing property interests and rights. The courts are
obliged to strike an equitable
balance between the protection of
existing rights and the public interest. Constitution 25 should be
interpreted and applied purposively,
with due regard to its purpose
to reform (see Van der Walt,
The
Constitutional Property Clause
(1997) 15).
Henderson,
Environmental
Laws of South Africa
,
Vol II, p. 2 – 450 states:
“
The Act achieves sovereignty over
mineral and petroleum resources, over a period of time, by
extinguishing mineral rights as a class
of property, and by
exercising control over minerals by the administrative grant of
rights to prospect and mine.”
[30] Deprivation of
property as contemplated in Constitution 25(1) will only be arbitrary
if it is done without sufficient reason
–
FIRST
NATIONAL BANK OF SA LTD t/a WESBANK v COMMISSIONER, SOUTH AFRICAN
REVENUE SERVICE AND ANOTHER; FIRST NATIONAL BANK OF SA LTD
t/a
WESBANK v MINISTER OF FINANCE
[2002] ZACC 5
;
2002 (4) SA 768
(CC) par. [99]). In order to determine whether there
is sufficient reason for a particular deprivation, certain factors
are mentioned
by Ackermann J in the
FIRST
NATIONAL BANK
-case
(
supra
)
at par. [100]. (He points out that that judgment is not concerned
with incorporeal property (par 100(e))). The greater the extent
of
the deprivation, the more compelling the purpose of the deprivation,
and the relationship between means and ends must be (
MKONTWANA
v NELSON MANDELA METROPOLITAN MUNICIPALITY AND ANOTHER; BISSETT AND
OTHERS v BUFFALO CITY MUNICIPALITY AND OTHERS; TRANSFER
RIGHTS ACTION
CAMPAIGN AND OTHERS v MEC, LOCAL GOVERNMENT AND HOUSING, GAUTENG, AND
OTHERS (KWAZULU-NATAL LAW SOCIETY AND MSUNDUZI
MUNICIPALITY AS AMICI
CURIAE)
2005 (1) SA 530
(CC) par. [35]). The view expressed in
LEBOWA
MINERAL TRUST BENEFICIARIES FORUM v PRESIDENT OF THE REPUBLIC OF
SOUTH AFRICA AND OTHERS
2002 (1) BCLR 23
(T) at 28 E – H that the Constitution does not
protect mineral rights is, according to Dale,
South
African Mineral and Petroleum Law
at MPRDA–131 “so clearly wrong that it does not need further
discussion”. One cannot look at property, including mineral
rights,
in a simplistic manner. In view of the history of this
country, it is not simplistic.
[31] The MPRDA has its
origin in Constitution 25 dealing with prospecting rights. We must
look at prospecting law through the lens
of public law, not private
law. The MPRDA has done away with private acquisition of mineral
rights (sections 3, 5, 13, 16, 18, 22,
23 and 27 of MPRDA). The
MPRDA has placed limitations or restrictions on mineral rights
(
SECHABA
v KOTZE AND OTHERS
[2007] 4 ALL SA 811
(NC) par. [8]). Under Constitution 25(4)(b)
property is not limited to land (see also Van Der Walt,
The
Constitutional Property Clause
,
64). Respondents submit as follows in their heads of argument:
“
The
outdated perception of property as an exclusive and unlimited private
right which should not be interfered with cannot pass constitutional
muster and it is better to base the property clause on the modern
perception of property rights, which leaves room for a wide range
of
different and contextualised property rights that derive from the
context, including social and public aspects of the context.
This
means that the social, environmental, physical and other
characteristics of property determine the nature, scope, limits, and
protection of each right so that both the scope of the property
holders’ entitlements towards and the scope of State powers to
interfere with it are inherently determined by the context.
Land deserves special treatment
because it is a special, vital, and limited resource, the use and
exploitation of which have serious
social implications. In the
constitutional dispensation, the scope of land users’ rights to use
and exploit land and the scope
of the State’s power to interfere
with and control land use can never be determined abstractly. This
also means that the adherence
to ownership as the fundamental and
most important land guide should be abandoned so that the development
of a wide range of divergent
land rights for different kinds of land
and for different uses of land, can be promoted.
In private law, property (especially
ownership) is traditionally described as an absolute right to
indicate that it is unrestricted
in principle; restrictions have to
be imposed specifically and clearly by legitimate legislative or
regulatory action. In accordance
with the constitutional purport, it
is necessary to distinguish the constitutional property concept from
the aspect of the private
law concept, since the view of absolute or
unrestricted and exclusive rights are in conflict with the
constitutional provisions regarding
the limitation of fundamental
rights. In constitutional law, property is mostly regarded as an
inherently limited right, even when
it is regarded as a fundamentally
absolute right in private law.”
[32] In the new order,
replacing the common law with the MPRDA, the principles are clear.
The principle of permanent sovereignty
over natural resources
developed over two main periods:
(i) From its inception in
1952 up to the adoption of resolution GAR 1803 (XVII) of The General
Assembly on 14 December 1962 (Brownlie,
Basic
Documents in International Law
,
4
th
Ed 235);
(ii) From 1962 to the
adoption of The Charter of Economic Rights and Duties of States
(CERDS) in 1974.
(Visser, “The principle
of permanent sovereignty over natural resources and the
nationalisation of foreign interests” XXI
Cilsa
1988 76 – 91).
[33] During the period
1952 – 1962 the concept of permanent sovereignty over natural
resources was seen as a right vested in the
people rather than the
states (Visser 77). Resolution 1803 (XVII) was, according to Visser,
generally accepted as being conservative,
and acceptable to most
developed countries (Visser 78). During the second period, by 1974,
the concept of permanent sovereignty
over natural resources had been
“transformed into a political demand for a New International
Economic Order”. There was now
absolute economic sovereignty in
the sphere of foreign investment (Visser 79). As to the payment of
compensation the following circumstances
are considered relevant when
dealing with nationalisation and payment of compensation: “(1) the
host state’s financial capacity
to pay; (2) the period of
exploitation; (3) whether or not the initial investment had been
recovered; (4) the excessiveness of
profits; (5) undue enrichment
as a result of the colonial situation; (6) the contribution of the
nationalised company made to the
economic and social development of
the host country; (7) the reinvestment of the nationalised
undertaking; and (8) the loss of future
earnings of the nationalised
undertaking:” (Visser 82).
[34] The right to
permanent sovereignty over natural resources has been recognised as a
basic element of the right to self determination
(first introductory
paragraph to General Assembly Resolution 1803 (XVII) of 14 December
1962, as quoted in Brownlie,
Basic
Documents in International Law
,
4
th
Ed 236).
[35] The MPRDA seeks to
deal with injustices of the past. It is the first of its kind. One
has to look at its origin. To that end
the White paper: “A
Minerals and Mining Policy for South Africa October 1998, Pretoria”
should be considered. The intent of
Government is set out in
paragraph 1.3.2:
“
1.3.2
Intent
Government will:
i) promote exploration and investment
leading to increased mining output and employment;
ii) ensure
security of tenure in respect of prospecting and mining operations;
iii) prevent
hoarding of mineral rights and sterilisation of mineral resources;
iv) address
past racial inequities by ensuring that those previously excluded
from participating in the mining industry gain access
to mineral
resources or benefit from the exploitation thereof;
v) recognise
the State as custodian of the nation’s mineral resources for the
benefit of all;
vi) take
reasonable legislative and other measures, to foster conditions
conducive to mining which will enable entrepreneurs to gain
access to
mineral resources on an equitable basis; and
vii) bring
about changes in the current system of mineral rights ownership with
as little disruption to the mining industry as possible.
1.3.3 The
Present System: Views For and Against
Many differing views have been
expressed in support of or against the current arrangements in
respect of mineral rights and prospecting
information.”
In the White paper it is
stated as to ownership of mineral rights:
“
1.3.6 Government
Policy
1.3.6.1 Ownership of mineral rights
i) Government recognises the inherent
constitutional constraints of changing the current mineral rights
system. However, in terms
of the Constitution the State is bound to
take legislative and other measures to enable citizens to gain access
to rights in land
on an equitable basis. In addition, it empowers
the State to bring about land rights (including mineral rights) and
other related
reforms to redress the results of past racial
discrimination. Furthermore, article 2(1) of the UN Charter of
Economic Rights and
Duties of the State grants the States full
permanent sovereignty, including possession and disposal, over all
its natural resources.
Government therefore does not accept South
Africa’s current system of dual state and private ownership of
mineral rights.
ii) Government’s
long-term objective is for all mineral rights to vest in the State
for the benefit of and on behalf of all the
people of South Africa.
iii) State-owned mineral rights will
not be alienated.
iv) Government will promote minerals
development by applying the “use-it or lose-it”/”use-it and
keep-it” principle.”
b)
Applicant’s
submissions
[36] It should of course
be borne in mind, as Mr Grobler said, that the White paper expressed
government policy in 1998. Government
is the executive part of the
state. Parliament is the legislative arm. The legislature may have
its own policy which differs from
the policy of the executive as set
out in the White paper. A further important point is that the White
paper was drawn up in 1998,
then drafting of the MPRDA started.
There could have been important changes in drafts. The MPRDA should
be interpreted according
to its own wording.
[37] On behalf of the
Applicant, as to the state’s sovereignty over all mineral resources
(section 2 of MPRDA), Mr Grobler pointed
out that sovereignty is a
concept of international law. In the 1950s developing countries
believed that their wealth was being taken
out of the soil by
foreigners (or colonialists). There was not general consensus in the
1974 resolution. The developed countries
were not willing to accept
the resolution.
[38] Section 2(a) of the
MPRDA recognises that the state may regulate mineral resources. The
objects of the Act, set out in section
2, do not vest ownership in
the state. One has to look inside the Act, at the provisions of the
Act, to determine what the Act says.
Section 2(b) refers to the
“State’s Custodianship”. That is similar to preamble (2).
These provisions do not mean that minerals
are
res
publicae
.
Nowhere in the Act does it say that minerals vest in the state.
Section 3 of the MPDRA deals with custodianship of the nation’s
mineral resources. The state is also the custodian of the nation’s
fishing resources. However, that does not mean that the state
owns
the fishing resources. The fishing resources comprise, simply, the
wealth of fish which South Africa can call upon if need
be. The
MPRDA controls the use of the “resource”. Property rights are
determined by local law (
JOSIAS
VAN ZYL AND OTHERS v THE GOVERNMENT OF RSA AND OTHERS
SCA Case 170/06, unreported Judgment 20 September 2007 par [64]).
[39] The
MPRDA contains provisions amounting to institutionalised
expropriation. The institution of mineral rights is abolished by
the
MPRDA. The whole concept of mineral rights is expunged, not
ownership of what has already been mined. It is important to note
that the MPRDA does not expropriate tailings.
2)
Remedial
legislation: Purposive interpretation
a)
Respondents’
submissions
[40] In constitutional
interpretation the purpose is to test legislation against the values
and principles imposed by the Constitution
(
MATISO
AND OTHERS v THE COMMANDING OFFICER, PORT ELIZABETH PRISON AND OTHERS
1994 (3) BCLR 80
(SE) 87 E – G;
LAWSA
Vol 25(1) par. 315). Courts rely on preambles not only in
constitutional interpretation, but also in statutory interpretation
(
LAWSA
Vol 25(1) (1
st
Reissue) par. 349). The preamble has been held to be an expression
of the intention of legislature (
KONYN
AND OTHERS v SPECIAL INVESTIGATING UNIT
1999 (1) SA 1001
(Tk) at 1007H-I). History and sources of an Act may
be used as an aid to interpretation (Kellaway,
Principles
of Legal Interpretation
(1995) 299).
[41] The rule that
legislative history is not admissible in the interpretation of
statutes is no longer as firmly entrenched as it
once was (
CASE
AND ANOTHER v MINISTER OF SAFETY AND SECURITY AND OTHERS; CURTIS v
MINISTER OF SAFETY AND SECURITY AND OTHERS
[1996] ZACC 7
;
1996 (5) BCLR 609
(CC) par [12] footnote 18). There seems to be a
trend to permit limited use of the history as an aid to
interpretation (Cockram,
INTERPRETATION
OF STATUTES
3
rd
(1987) 55).
[42] The proper approach
in interpreting the MPRDA is to look at the Act as a whole. The
traditional approach to the interpreting
of statutes must give way to
purposive interpretation of remedial legislation. The following
exposition is given by Moseneke DCJ
in
DEPARTMENT
OF LAND AFFAIRS AND OTHERS v GOEDGELEGEN TROPICAL FRUITS (PTY) LTD
[2007] ZACC 12
;
2007 (6) SA 199
(CC) par. [53]:
“
[53] It is by now trite that not
only the empowering provision of the Constitution but also of the
Restitution Act must be understood
purposively because it is remedial
legislation umbilically linked to the Constitution. Therefore, in
construing ‘as a result of
past racially discriminatory laws or
practices’ in its setting of s2(1) of the Restitution Act, we are
obliged to scrutinise its
purpose. As we do so, we must seek to
promote the spirit, purport and objects of the Bill of Rights. We
must prefer a generous
construction over a merely textual or
legalistic one in order to afford claimants the fullest possible
protection of their constitutional
guarantees. In searching for the
purpose, it is legitimate to seek to identify the mischief sought to
be remedied. In part, that
is why it is helpful, where appropriate,
to pay due attention to the social and historical background of the
legislation. We must
understand the provision within the context of
the grid, if any, of related provisions and of the statute as a
whole, including its
underlying values. Although the text is often
the starting point of any statutory construction, the meaning it
bears must pay due
regard to context. This is so even when the
ordinary meaning of the provision to be construed is clear and
unambiguous.”
[43] In this case the
applicant relied on the views of Dale to the exclusion of other
views. Dale’s view, as set out by Badenhorst,
Mostert and Dendy in
LAWSA
Vol 18
2
nd
Edition par. 101 is that “ownership of unsevered minerals still
vests in the owner of the land, but he may not exploit such
minerals”.
The alternative view is that ownership of minerals not
yet severed, is vested in the state (Dale, 2002
Annual
Survey
574), who points out that such vesting is not clear because the MPRDA
does not expressly refer to ownership of minerals (
LAWSA
Vol 18 par. 101). The respondents say one must look at –
(i) the preamble,
(ii) the
White paper, and
(iv) the objectives.
Then, as to tailings
dumps, one cannot simply say “These are my dumps and I am not going
to do with them as I please.”
b)
Applicant’s
submissions
[44] The Applicant does
not dispute that this is remedial legislation. The MPRDA expressly
puts mineral rights under custodianship
of the state (section 3(1)).
The question is whether it also puts rights in respect of minerals in
old tailings dumps under state
custodianship. The Act does not
expressly say so. One would have to read words into the Act that are
not there in order to find
that minerals in pre-2004 tailings dumps
are included as part of the minerals in respect whereof state
custodianship exists. The
definition of “mineral” refers to
minerals in residue stockpiles and residue deposits. These terms
were not used in previous
legislation; they have particular and
defined meanings flowing from their nature created by the terms of
the MPRDA.
3)
Is
there compensation if applicant’s rights were expropriated
?
[45] Respondent contends
that any legislation which made the acquisition of mineral rights
possible, has been repealed, and rights
derived from such legislation
no longer exist, subject to the transitional provisions of the MPRDA.
Prospecting permit 13/2000,
in respect of the dumps in question, was
renewed by the applicant and the renewal period expired on 4 May
2004. Applicant was invited
by the Department of Minerals and Energy
to apply for the conversion of that prospecting right to a new
prospecting right regarding
the dumps. Applicant declined that
invitation.
[46] Section 55 of the
MPRDA gives the minister the power to expropriate property. Schedule
II of the MPRDA contains transitional
arrangements. One of the
objects of Schedule II is to ensure that security of tenure is
protected (Schedule II item 2). Item 12
of Schedule II deals with
the payment of compensation. If the old order right has not been
converted, Applicant might feel it has
been expropriated as
contemplated in item 12, and can claim compensation. Applicant is
not without a remedy. In fact, it has two
remedies:
(i) It can lodge an
application with the DME; and
(ii) It can claim
compensation as contemplated by item 12 of Schedule II.
There will be
expropriation if the holder of “old order prospecting right”
fails to apply for conversion to prospecting rights
within the
stipulated period (
LAWSA
Vol 18 par. 68, par. (a) at p. 91). Expropriations can also take
place “if holders of mineral rights or other rights were excluded
on 1 May 2004 from the transitional provisions in the sense that they
did not become holders of old-order rights” (loc cit, par.
(i) at
p. 92).
[47] Whereas Applicant
says that it could not convert its old-order prospecting right, the
respondents contend that the MPRDA provided
for such a case, and the
remedy is a claim for compensation as set out in Schedule II item 12.
Applicant is not without a remedy.
4)
Casus
Omissus and absurdity
[48] As to the
casus
omissus
and absurdity arguments raised by the first respondent in the heads
of argument, Mr Grobler pointed out that courts may “depart
from
the ordinary effect of the words to the extent necessary to remove
the absurdity and give effect to the true intention of the
legislature” (
SUMMIT
INDUSTRIAL CORPORATION v CLAIMANTS AGAINST THE FUND COMPRISING THE
PROCEEDS OF THE SALE OF THE M V JADE TRANSPORTER
1987 (2) SA 583
(A) 596G – H). The court must be sure that the
contrary legislative intent is clear and indubitable (
DU
PLESSIS v JOUBERT
1968
(1) SA 585
(A) at 595A). The courts cannot usurp the functions of
the legislature (
MINISTER
VAN WATERWESE v VON DURING
1971 (1) SA 858
(A) at 876F). One cannot assume that purpose is
something external to language which exists in pure and perfect form.
Purpose must
be constructed by the court. Purpose “cannot serve
as a fixed determinant of meaning, leading to a correct
interpretation. There
is simply no single, correct meaning to any
statutory provision” (De Ville, “Meaning and statutory
interpretation”
(1999) 62
THRHR
377-8).
[49] Mr Grobler sets out
his submissions as follows in his heads of argument (paragraphs 3.4 –
3.7):
“
3.4. Indeed,
it is clear that the legislature deliberately chose not to regulate
“minerals” which occur in material which was
mined before the
MPRDA came into effect. This appears from the fact that the
legislature expressly dealt with the subject matter
of “debris,
discard, tailings, slimes, screening, slurry, waste rock, foundry
sand, beneficiation plant waste, ash or any other
product derived
from or incidental to a mining operation and which is stockpiled,
stored or accumulated for potential re-use, or
which is disposed of
…” in the definitions of residue stockpile and residue deposit.
In fact, “tailings” are mentioned by
name. Even though the
subject matter is expressly dealt with, the legislature did not
include tailings produced and products derived
from mining operations
conducted under the previous mineral law dispensation. This is a
clear indication that the literal meaning
of the definitions reflects
the true intention of the legislature.
3.5. Furthermore, the structure of the
transitional provisions
also expresses the clear intention of
the legislature to exclude tailings predating the MPRDA: The
statutory mineral right created
in section 1 of the Minerals Act in
respect of tailings does not form the basis of any old order right
continued in terms of Schedule
II after 1 May 2004. In none of the
Tables and categories of Schedule II does one find the statutory
mineral right with a license
issued in respect thereof, to be
continued as either an unused old order right, an old order
prospecting right or an old order mining
right. This indicates that
there is no
casus omissus
in the definition of
residue
stockpile
or
residue
deposit
: the question has
indeed been contemplated by the legislature and so provided for in
Schedule II.
3.6. It is submitted that there is
thus no reason to depart from the ordinary and grammatical meaning of
the relevant definitions
in the MPRDA. Indeed, there is simply not a
‘duidelike en onbetwyfelbare bepaalde bedoeling’ for the meaning
contended for by
the first respondent, which would justify a
departure from the literal meaning of the words.
3.7. A departure from the literal
meaning of the definitions is also not justified on the basis that
the literal meaning leads to
any absurdity. Analysis shows that the
so called absurdity lies not in the application of the definitions
within their stated field
of operation, but in the fact that the
statute does not provide for the same system in respect of material
which was mined before
the Act commenced. The literal meaning
clearly brings about an exclusion of materials mined prior to the
inception of the MPRDA,
from the provisions of the MPRDA for obvious
reasons. Were these kinds of tailings and products not excluded, the
state would have
been liable to pay compensation to the owners
thereof as a result of their expropriation. And, as appears from the
Trojan
matter, materials which have been mined already are infinitely more
valuable than the
in situ
resource. It must also be pointed out that, structurally, the MPRDA
expropriates only rights and not separate movable property.”
5
)
T
he
National Environmental Management Act 107 of 1998 (“NEMA’)
[50] Respondent contends
that The National Environmental Management Act 107 of 1998 (“NEMA”)
does not provide sufficient control
in respect of tailings dumps.
[51] Whoever wants to
remove diamonds from the dumps, will have to engage in mining
activity. There is a vast difference between
NEMA and the MPRDA e.g.
the MPRDA requires an environmental impact assessment (39(1)),
whereas NEMA has no such requirement. Section
40 of the MPRDA
imposes a duty on the Minister of Minerals and Energy to consult with
other state departments. NEMA contains no
such provision. Section
41(1) of the MPRDA imposes a duty on an applicant for a prospecting
or mining right to make financial provision
in advance for
rehabilitation and management of negative environmental impacts.
NEMA has no such provisions. Thus the taking of
minerals from dumps
cannot be regulated only by NEMA.
6)
The
meaning of “mineral” in the MPRDA
a)
Respondents’
submissions
[52] The respondents
contend that diamonds in the tailings dumps are “unsevered”
minerals. Respondents say that unsevered minerals,
in whatever form
they are to be found, are “mineral resources”. The respondents
contend that, because some diamonds are still
in the kimberlite lying
on the tailings dumps, they are still “occurring naturally on the
earth”, and therefore fall under the
definition of mineral and form
part of the mineral resources which under section 2(1) of the MPRDA
fall under the custodianship of
the state.
b)
Applicant’s
submissions
[53] Applicant, on the
other hand, argues that if the diamonds are still in the ore,
ownership does not vest in the miner. Transfer
of ownership of
minerals is impeded by the fact that they form part of the land. As
soon as the ore containing the minerals is severed
from the land, a
new object (movables
res
)
is created which is the object of separate ownership (
TROJAN
EXPLORATION CO (PTY) LTD AND ANOTHER v RUSTENBURG PLATINUM MINES LTD
AND OTHERS
[1996] ZASCA 74
;
1996 (4) SA 499
(A) at 534 F – H). Applicant contends that
ownership of the ore containing the diamonds passes as soon as the
ore is separated
from the earth. When you take out the kimberlite
ore you become owner of the ore and the diamonds inside the ore. A
diamond is
a simple mineral, not like gold which appears in many
forms.
[54] The MPRDA defines
“mineral” as follows:
“‘
mineral’ means any substance,
whether in solid, liquid or gaseous form, occurring naturally in or
on the earth or in or under water
and which was formed by or
subjected to a geological process, and includes sand, stone, rock,
gravel, clay, soil and any mineral
occurring in residue stockpiles or
in residue deposits, but excludes –
(a) water, other than water taken from
land or sea for the extraction of any mineral from such water;
(b) petroleum; or
(c) peat”.
[55] There
are distinctions in the terminology used by the Minerals Act of 1991
and the MPRDA. Under the Minerals Act a substance
in tailings is
included under the definition of “mineral”. “Tailings” was
defined to mean “any waste rock, slimes or residue
derived from any
mining operation or processing of any mineral”. In the MPRDA the
definition of “mineral” does not refer to
substances in tailings,
but to any mineral occurring in “residue stockpiles” or in
“residue deposits”. The respondents do
not contest that a
residue stockpile is created under the MPRDA. The MPRDA does not
contain a definition of “tailings”.
7)
The
nature of tailings
[56] The concept of
tailings differs from mineral to mineral. Tailings comprise the
mined material. It may have been put through
a process of extraction
or refinement e.g. coal which has to be sold in small pieces.
Tailings can be a heap, it is mined material.
There are vast
differences in the processes which different minerals have to go
through. There is not a uniform process for all
minerals to arrive
at the extracted mineral or tailings.
[57] The MPRDA does not
define “tailings”. A “mineral” can also occur in “residue
stockpiles” or “residue deposits”.
A “residue stockpile”
contains
inter
alia
tailings stockpiled for potential re-use. A “residue deposit” is
a residue stockpile remaining at the end the particular period.

Applicant’s case is that their tailings dumps are not residue
stockpiles as they were produced before the MPRDA came into
operation.
The definition of “mineral” in the MPRDA says nothing
about tailings dumps. It includes “minerals” in a stockpile. If
a mineral is in a stockpile, it cannot be said to be “occurring
naturally in or on the earth” as required in the definition of
“mineral” in section 1 of the MPRDA. There are two basic
requirements for a substance to be classified under the definition
of
a mineral: (i) it must occur naturally; (ii) it must have been
formed by or subjected to a geological process. Minerals in a
stockpile have already been severed from the earth. A tailings dump,
such as those relevant here, is not a residue stockpile.
[58] The purpose of the
MPRDA is to regulate mining activity, including prospecting and
processing. It defines substances for the
purpose of regulating
them. The argument raised by the first respondent in its heads of
argument is that it is inconceivable that
the MPRDA regulates dumps
under the old Act, and not under the new Act. This would give rise
to anomalies.
[59] The
applicant’s answer to that submission is that that is the structure
of the Act. The MPRDA does not intend to regulate
tailings dumps in
the manner the Minerals Act did. There are sufficient legislative
controls to regulate the processing of tailings
dumps. There is a
plethora of statutory provisions, apart from the MPRDA, which would
regulate the processing of dumps. If you
mine tailings, you will be
subject to some controlling regime, not under the Department of
Mining.
[60] Applicant’s case
is that the legislature made a conscious choice not to include the
minerals in old tailings dumps under its
definition of minerals. The
legislature must have known that there are many dumps which were
created before the MPRDA came into
operation. There are specific
industries which concern only the re-working of these dumps.
Existing tailings dumps were contemplated
by the legislature when it
enacted the MPRDA. The legislature must have known that the dumps
contain material which has already
been mined. Prospecting rights
were issued either including or excluding tailings dumps. There are
many different types of tailings
dumps, also depending on the type of
mineral. In order to regulate them the state will have to (i)
expropriate ownership in them,
and (ii) give the right to them to a
third party. A regulatory framework is required to deal with
tailings dumps which were created
from 1860 up to 2002. One cannot
look at the purpose of the Act and then, on the basis of that
purpose, say that the wording of
the Act must be ignored.
[61] As to “residue
stockpile”: can one broaden the definition so as to capture
tailings dumps which were created during the regime
of the 1964
Precious Stones Act? All Acts had different regimes. The court
cannot make a new law. The court cannot re-word the
Act. The Act is
read by people in commerce. They buy dumps on the basis of what the
law says. It is not in accordance with the
Constitution to interpret
words into an Act which are not there, and which do not address the
spectrum of situations in practice.
[62] Mr Grobler says that
the Minerals Act of 1991 brought back the reign of the mineral right.
The underlying concept was that of
private law mineral rights. The
ore in all stages of processing was the property of the holder of the
mineral right under the Minerals
Act 1991. The MPRDA did away with
all the common law mineral rights. It started with a clean slate.
Section 5(4) states that no-one
is entitled to mine without a right
granted by the minister. Whereas the Minerals Act regulated existing
private law rights, the
MPRDA destroys the common law rights and
creates rights granted by the minister. Section 5(1) grants a
limited real right in property.
Before the MPRDA a person had a
right because of having a mineral right. After the MPRDA the
minister can give a person a right.
[63] The minister can
give a prospecting right to someone else after a person’s ownership
of the mineral right has lapsed. Before
the minister can grant a
right in respect of a tailings dump to someone else, the initial
holder’s right must first be taken away.
[64] The Minerals Act
regulated tailings incorporating tailings in the definition of mining
(section 5 Minerals Act 1991). The right
to minerals is held by the
holder of the mining right (par. (b) under the definitions of
“holder” under the Minerals Act 1991).
Had it not been for this
provision, the owner of the tailings could go on processing the
tailings. The legislature wanted to control
also the processing of
tailings under the Minerals Act. Under section 6 a prospecting
permit could be issued in respect of “land
or tailings” (section
6(1)). A mining authorisation could be issued in respect of “land
or tailings” (section 9(1)).
[65] Applicant contends
that a section 9 permit, or a section 6 prospecting permit, is not a
common law mineral right. It is a statutory
mineral right. Schedule
II to the MPRDA dealing with transitional provisions, does not
continue this statutory mineral right.
[66] Applicant’s case
is that the definition of “mineral rights” in the MPRDA was not
intended to include old order dumps.
In respect of the tailings
dumps in question, applicant had a section 6 mineral prospecting
right. It did not have a common law
mineral right in those dumps.
It did not have an old order right which could be converted.
Applicant’s activities regarding the
tailings dump do not fall
under MPRDA.
VII
CONCLUSION
[67] The central question
in this case is whether the MPRDA deprives the applicant of the
ownership of the minerals in its tailings
dumps. The MPRDA leaves no
doubt that mining rights in respect of minerals which have not been
mined, have been taken out of private
hands, and that such rights
vest in the custodianship of the state (sections 2 and 3 MPRDA). Was
the intention to include tailings
dumps?
[68] There are several
reasons why tailings dumps, and in particular applicant’s tailings
dumps which form the subject matter of
this case, are not subject to
control by the MPRDA:
(i) The tailings dumps
are movable, and the diamonds occurring in them do not occur
“naturally in or on the earth”.
(ii) Tailings dumps do
not occur naturally. They are formed by the placement of processed
and partly processed materials, to be re-worked
in future years when
technology improves.
(iii) The tailings dumps
have been owned by Applicant since 1973. Applicant’s ownership of
the tailings dumps is not in dispute.
Applicant has spent money and
labour and time on these tailings dumps.
(iv) The
Minerals Act of 1991 recognised the applicant’s ownership of the
tailings dumps. Section 9(1) of the Minerals Act provided
for the
issuing of a mining authorisation for “land or tailings”. The
MPRDA, on the other hand, has a clear definition of a
residue
stockpile. The transitional provisions of the MPRDA in schedule II
do not continue applicant’s permit under section 6.
The MPRDA did
not want to regulate tailings dumps. There is no continuation of the
regime under the Minerals Act in respect of
tailings dumps. “Mining”
of a tailings dump is in fact “processing”. It is the winning of
the mineral.
(v) As
to purposive interpretation, looking at the history and origin of the
MPRDA, the White paper and the objects of the Act, those
sources are
silent on tailings. There is no reference to tailings indicating
that mineral rights in tailings fall under the custodianship
of the
state in terms of the MPRDA. As Henderson (above) points out, the
MPRDA achieves sovereignty
over
a period of time
.
The purpose of the Act is not defeated or notably reduced by
excluding tailings dumps.
(vi) A
finding that the state is now the custodian of the minerals remaining
in tailings dumps, would amount to expropriation, which
is not
expressly provided for and cannot be inferred to have been
contemplated by the legislature. Our law requires that a strict
construction be placed upon statutory provisions which interfere with
elementary rights (
DADOO,
LTD AND OTHERS v KRUGERSDORP MUNICIPAL COUNCIL
1920 AD 530
at 552). Legislative provisions curtailing common law
rights must be restrictively interpreted (
BREBNER
v SEATON
1947 (3) SA 629
(EDLD) at 640). The court must be satisfied that the
legislature has in express terms or by clear implication altered the
common
law and taken away existing rights (
MOTOR
INSURERS’ ASSOCIATION OF SOUTHERN AFRICA v SCHUURMAN AND LANDSAAT
1961 (1) SA 486
(A) at 491A-B). If the legislature intended to take
away private rights in tailings dumps, which have existed for more
than a hundred
years, it would have stated so clearly and
unambiguously.
(vii) The
argument that, if there has been an expropriation, the applicant has
a right to compensation under Schedule II item 12,
is fallacious.
In the first place the respondents deny that there has been any
expropriation. They say that the applicant’s
old-order prospecting
right ceased to exist subject to transitional provisions. Applicant
failed to apply for the conversion of
that prospecting permit to one
under the MPRDA. The Applicant was of the view that the MPRDA does
not apply to the tailings dumps
in question because they are movable
assets which were not produced under the MPRDA. The position is thus
that the respondents contend
that there was no expropriation;
applicant’s permit expired; applicant allowed its permit to expire,
whereby applicant discarded
it. Furthermore, applicant brought its
current situation upon itself. It was invited to protect its rights,
but deliberately declined
to do so. In such circumstances anyone
considering compensation for “expropriation” will give the
applicant short shrift.
(viii) Tailings
dumps cannot be considered a
casus
omissus
– no absurdity follows if tailings are excluded. It is quite easy
to give full and proper effect to the MPRDA if tailings are
left out.
The MPRDA targets mining rights in unsevered minerals in the ground,
not in tailings which have been mined.
(ix) As
to NEMA, in enacting the MPRDA the legislature must have contemplated
that environmental legislation would adequately regulate
the
processing of minerals from dumps created before 2002. This is not
an unregulated activity. In the management of the environment,
NEMA
places people and their needs at the forefront (Nel, “Of African
Pots, plans and people’s needs”
De
Rebus
September 2007 51 at 52).
A mineral right is
rendered worthless if it does not incorporate the right to extract
(
Trojan
– case (
supra
)
at 525G-H). A tailings dump is made, kept, sold and bought because
of the knowledge that it contains valuable material. The
deponent
on behalf of first respondent says:
“
I
admit the origin of the tailings dumps on Subdivision 16 and that
these dumps have a valuable diamond content. This diamondiferous
content makes them a valuable mineral resource”.
These tailings dumps
have been the uncontested property of the applicant since 1973. The
minerals in the tailings dumps have value
to applicant.
(xi) The question in this
case is not whether the diamonds occurred in the ore. In order for
diamonds in the tailings dumps to be
considered “minerals” for
purposes of the MPDRA (and therefore vesting under custodianship of
the state) they must be found to
be occurring naturally in the earth.
The fact that they still occur naturally in the ore is irrelevant
for purposes of the definition
of “mineral” in the MPRDA. The
diamonds in the ore were severed from the mother rock. Then the ore
became a new object. That
vested ownership in the mineral title
holder, the applicant. That all happened before the MPRDA came into
operation. The MPRDA
did nothing to detract from applicant’s
rights to the tailings dumps.
(xii) Tailings
are a unique place in which minerals can be found after someone has
taken them out of the earth and processed them
to some extent.
Unmined materials are different: they are in the ground, in a sense
they were a bonus to the land owner. If they
were undiscovered when
the landowner bought, they were transferred without cost. Tailings
are different: the owner of the tailings
has, while exercising a
legal right, made later extraction by improved means possible. It is
not part of the heritage to which section
3(1) of the MPRDA refers.
[68] In
the circumstances the declaration sought by the applicant should be
granted.
VIII
THE
STRIKING OUT APPLICATION:
[69] Having
concluded his argument relating to the review application, Mr.
Grobler indicated that the applicant wished to apply for
certain
paragraphs in the affidavit of Dr. Lock to be struck out. A notice
in terms of Rule 6(15) of the Uniform Rules of Court
had indeed been
filed by the applicant in which the applicant intimated that, should
the application to file the affidavit of Dr.
Lock be granted, an
order would be sought that certain paragraphs of Dr. Lock’s
affidavit be struck out on the basis that they
are irrelevant,
alternatively constitute inadmissible evidence, alternatively are
vague and embarrassing.
[70] The
first paragraph that the applicant seeks to strike out, is paragraph
10, in which Dr. Lock deals with definitions of the
word “mineral”,
“tailings” and where diamonds may be found. They deal with
aspects that are not in dispute, therefore cannot
appreciably assist
the court and are therefore irrelevant. In paragraph 11, Dr. Lock
states the following:
“
11.6
The
inclusion of the phrase “in tailings or dumps” in the Code is in
conflict with the MPRDA definition of mineral, despite the
2000
version of the Code being in clear alignment with the then current
mineral Law.
11.7 The Code thus
allows the reporting of mineral resources for material that is not
defined as a mineral under the MPRDA.
11.8 …. thus any
report of diamond resources relating to the presence of diamonds in
the Jagersfontein tailings dumps is acceptable
under SAMREC, even
though the same substance may be a “non mineral” under the
definition of mineral in the MPRDA.”
Clearly,
in these subparagraphs the deponent is seeking to advance legal
opinion regarding the interpretation of some of the provisions
of the
Act – precisely that which the Court is called upon to decide in
the present matter.
[71] In
paragraph’s 12 and 13, the deponent merely deals with definitions,
which are not in dispute in the present matter. In
paragraph 15.22
a legal opinion is once again expressed, dealing with one of the
issues that has to be decided by this Court, namely,
whether the
diamonds on the tailing dumps are still naturally occurring. Lastly,
in paragraph 15.23, an opinion is expressed that
seems to be in
conflict with the opinion stated previously, and also one which
cannot assist the Court in any way, and is therefore,
in our view,
irrelevant.
[72] We
are therefore of the opinion that the application to strike out
should be allowed. In coming to that conclusion, we have
taken
cognisance of the
dicta
of Wessels JA in
COOPERS
(SA) LIMITED v DEUTCHE SCHáDLINGBEKáMPFUNG MBH
,
1976 (3) SA 352
(A), in particular the dicta at page 370 D – H, and
we have also applied the dicta of F S Steyn, J, in
ASSOCIATION
OF AMUSEMENT AND NOVELTY MACHINE OPERATORS v MINISTER OF JUSTICE
,
1980 (2) SA 636
(A). The main purpose of the filing of the affidavit
of Dr. Lock was, if we understand Mr. Nthai correctly and if we
understand
the affidavit correctly, to assist the Court in deciding
whether the MPRDA is applicable to diamonds in the tailings dumps.
Clearly
the affidavit is not permissible if that was the reason why
it had been filed. The other paragraphs deal with definitions that
are
not in dispute and are therefore irrelevant.
[73] Mr.
Nthai conceded, correctly in our view, that in the event of the
above-mentioned paragraphs being struck out, the corresponding
paragraphs in the applicant’s responding affidavit should also be
struck out. The relevant passages are paragraphs 2.6, 2.7.2,
2.8,
2.9 and 2.11. The relevant order will be made at a later stage, and
the costs of the application to file the affidavit of Dr.
Lock will
be dealt with later in this judgment.
IX
COSTS:
[74] The
remaining question is that of costs. Having regard to the fact that
Mr. Nthai conceded that paragraph 3 of the Notice of
Motion should be
granted, and that we have concluded that prayer 1 should also be
granted, as well as the declarator in respect of
the applicability of
the Act to the tailings dumps, we conclude that the applicant is
entitled to the costs of the review application.
It was suggested by
Mr. Budlender on behalf of the first respondent, and Mr. Nthai, for
the remaining respondents that the respondents
should be ordered to
pay the costs jointly and severally, the one paying the other to be
absolved. We agree that that order will
be fair under the
circumstances, but for the costs of the second day of the hearing of
the application, as Mr. Budlender was excused
from further attendance
after the lunch adjournment on the first day. The first respondent
can therefore not be held liable for
the costs incurred after 13:00
on the first day.
[75] At
a previous hearing, costs were reserved and such costs have to be
considered now. On the 14
th
May 2007, the review application was postponed to the 3
rd
of December 2007, and the costs of that day were reserved, as well as
the costs relating to an application for postponement (case
number
1259/07). We are not convinced that, as far as the costs are
concerned that were reserved on the 14
th
of May 2007 in respect of both applications, such costs should be
considered differently and are of the opinion that such costs should
also follow the event, and that respondents should be ordered to pay
such costs.
X
ORDER:
[76] In
the result the following orders are made:
1. It is declared that
the applicant is the owner of the tailings dumps situated on
Subdivision 16 of the farm Jagersfontein 14, Magisterial
District of
Fauresmith.
2. The
decision of the third and/or fourth respondent to grant a prospecting
right to the first respondent in respect of Subdivision
16, is
reviewed and set aside.
3. The prospecting right
7/2006 executed pursuant to the decision referred to in prayer 2
above, is set aside.
4. It
is declared that the provisions of the
Mineral and Petroleum
Resources Development Act, No. 28 of 2002
, do not apply to the
tailings dumps situated on subdivision 16 of the farm Jagersfontein
14, Magistrarial District of Fauresmith.
The application to
strike out is allowed with costs, and paragraphs 10, 11.6, 11.7, the
last sentence of paragraph 11.8, paragraph
12, paragraph 13,
paragraph 15.22 and 15.23 of the affidavit of Dr. Lock are struck
out as well as the paragraphs 2.6, 2.7.2, 2.8,
2.9 and 2.11 of the
applicant’s responding affidavit.
The
first, second, third and fourth respondents are ordered to pay the
costs of the review application (this application) jointly
and
severally, the one paying the other to be absolved, with the
exception of the costs incurred after 13:00 on the 3
rd
December 2007, as well as the costs of the 4
th
December 2007, which costs are to be paid by the second, third and
fourth respondents.
7. The
costs reserved on the 14
th
of May 2007 in the review application as well as the costs that were
reserved in application number 1259/2007, are to be paid by
the
first, second, third and fourth respondents, jointly and severally,
the one paying, the other to be absolved.
8. The costs relating to
the affidavit of Dr. Lock, are to be paid by the second, third and
fourth respondents jointly and severally,
the one paying the other to
be absolved.
_______________ ____________
A.P.
BECKLEY, J
A.
KRUGER, J
On
behalf of applicant: G L Grobler SC
J
L Gildenhuys
Instructed by:
Webbers
(Bloemfontein)
Deneys Reitz
(Johannesburg)
On behalf of first
respondent: G M Budlender
Instructed
by:
Israel
Sackstein Matsepe Inc
BLOEMFONTEIN
On
behalf of second, third
and
fourth respondents : S Nthai SC
J
Y Claasen
Z
Eloff
Instructed
by:
State
Attorney
BLOEMFONTEIN
/sp