Agri South Africa v Minister for Minerals and Energy (CCT 51/12) [2013] ZACC 9; 2013 (4) SA 1 (CC); 2013 (7) BCLR 727 (CC) (18 April 2013)

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[2013] ZACC 9
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Agri South Africa v Minister for Minerals and Energy (CCT 51/12) [2013] ZACC 9; 2013 (4) SA 1 (CC); 2013 (7) BCLR 727 (CC) (18 April 2013)

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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 51/12
[2013] ZACC 9
In the matter between:
AGRI SOUTH AFRICA
.................................................................................
Applicant
and
MINISTER FOR MINERALS AND ENERGY
..........................................
Respondent
and
AFRIFORUM
.................................................................................
First
Amicus Curiae
AFRISAKE
................................................................................
Second
Amicus Curiae
CENTRE FOR APPLIED LEGAL STUDIES
.............................
Third
Amicus Curiae
FLORIS JOHANNES POOL
......................................................
Fourth
Amicus Curiae
Heard on : 8 November 2012
Decided on : 18 April 2013
JUDGMENT
MOGOENG CJ (Moseneke DCJ, Cameron J
(except
[58], [59], [67] and [68])
, Jafta J, Nkabinde J,
Skweyiya J, Yacoob J and Zondo J concurring):
Introduction
[1] South Africa is not only a
beauty to behold but also a geographically sizeable country and very
rich in minerals. Regrettably,
the architecture of the apartheid
system placed about 87 percent of the land and the mineral resources
that lie in its belly in
the hands of 13 percent of the population.
Consequently, white South Africans wield real economic power while
the overwhelming
majority of black South Africans are still
identified with unemployment and abject poverty. For they were unable
to benefit directly
from the exploitation of our mineral resources by
reason of their landlessness, exclusion and poverty. To address this
gross economic
inequality, legislative measures were taken to
facilitate equitable access to opportunities in the mining industry.
[2] That
legislative intervention was in the form of the Mineral and Petroleum
Resources Development Act
1
(MPRDA). Its commencement had
the effect of freezing the ability to sell, lease or cede unused old
order rights until they were
converted into prospecting or mining
rights with the written consent of the Minister for Minerals and
Energy
2
(Minister). It also had the
deliberate and immediate effect of abolishing the entitlement to
sterilise mineral rights, otherwise
known as the entitlement not to
sell or exploit minerals. This ought to come as no surprise in a
country with a progressive Constitution,
a high unemployment rate and
a yawning gap between the rich and the poor which could be addressed
partly through the optimal exploitation
of its rich mineral and
petroleum resources, to boost economic growth.
[3]
The inability of mineral rights holders to sterilise those rights,
sell, lease or cede them whenever they wanted to, as before,
and the
extinction, after the prescribed periods, of the hitherto permanent
and exclusive rights to determine who would exploit
the minerals,
3
caused grave dissatisfaction,
particularly among major landowners like the applicant’s
members. They believed that the commencement
of the MPRDA had the
immediate effect of expropriating mineral rights. Hence this
application.
Parties
[4] The applicant
is Agri South Africa
4
(Agri SA), whose objects include
the making of representations to Parliament on legislation that might
affect commercial farming,
the institution of legal proceedings to
challenge legislation in the interest of farming and generally the
protection of the rights
and interests of the commercial farming
community.
[5] The respondent
is the Minister, the Cabinet member responsible for the
administration of the MPRDA, including the granting of
various
rights.
5
[6] Four amici
curiae were admitted. The first and second amici are Afrikaanse Forum
vir Burgerregte
6
and Afrisake.
7
The third amicus is the Centre
for Applied Legal Studies (CALS), based at the University of the
Witwatersrand. The fourth amicus
is Mr Floris Johannes Pool, a farmer
who has approached this Court in his individual capacity.
Background
[7] Under common
law a landowner owns everything above and below the land, including
minerals.
8
One of the incidents of
landownership was the entitlement to search for, mine and dispose of
minerals, for own account.
9
As with most rights in property,
it was exclusive and could not be appropriated by third parties for
their use, benefit or enjoyment
without the owner’s consent.
[8] Due in part to
commercial expediency, the law developed to allow for severance or
separation of landownership from any rights
to minerals found in the
land.
10
Severance could be effected in a
number of ways including a notarial deed of cession in terms of which
the owner transferred mineral
rights to a third party.
11
The conclusion of a cession
bestowed on the holder an exclusive right to enter the property to
which the rights relate, to search
for minerals, and if found, sever
and carry them away.
12
Although the landowner would
still be the owner of the minerals whilst they remained in the ground
unceded,
13
once separated from the land,
the minerals became distinct movables with ownership vesting in the
holder of mineral rights.
14
[9] The conclusion
of a cession created a personal right in favour of the cessionary,
enforceable only against the cedent but not
against the “whole
world”.
15
A massive capital injection was
required for the infrastructural development necessary to exploit
minerals, but the inadequacy of
the protection afforded by the
personal right was a source of great concern. This necessitated
further development of the law to
enable holders of mineral rights to
register their deeds of cession with the Deeds Registry.
16
The mineral right was then
recognised as a limited real right in land, enforceable against the
world at large.
17
[10]
A holder of mineral rights could alienate the rights by cession, a
grant of a prospecting or mining lease or encumber them
by granting a
further limited real right, such as a mortgage bond or a
usufruct
.
These rights were in practice and in law treated as assets that could
be sold, leased or used as security. They formed part of
the holder’s
estate and could be bequeathed to an heir.
18
[11]
A substantially similar position was adopted in the Mining Rights
Act
19
of 1967 and the Minerals Act.
This appears from section 1 of the Minerals Act which defines a
“holder” of mineral rights,
in relevant part, as—
“
the owner of such land:
[p]rovided 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”.
20
[12] It follows
from this definition that mineral rights could still be held by a
landowner under the Minerals Act. Since this right
was capable of
being severed from landownership, mineral rights or an undivided
share therein would, in circumstances where severance
had taken
place, be registered in the Deeds Office, in the name of the holder.
The significance and benefits of being a holder
of mineral rights
under the Minerals Act
were—
“
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.”
21
The
exercise of the right to prospect for or mine minerals was
conditional upon the grant of the authorisation or permit.
22
[13]
Sebenza (Pty) Ltd (Sebenza) bought coal rights from the liquidators
of
Kwa-Zulu Collieries (Pty) Ltd for R1 048 800 on
2 October 2001 and registered them in its name. Sebenza was
not the owner of the land on which the coal was located.
[14]
On 1 May 2004 the MPRDA came into effect.
Sebenza
became the holder of an unused old order right on that date. This
happened in terms of item 8 of Schedule
II
to the MPRDA. Unused old order rights were in force for a period of
one year after commencement.
23
As the holder
of an unused old order right, Sebenza had the exclusive right to
apply for a prospecting or mining right under the
MPRDA within a
year.
[15] Because of an
internal dispute which resulted in the dissolution of the
shareholding, Sebenza was not in a position to pay
the fees required
to apply for and secure the authorisation to prospect for,
24
or a permit to mine
25
the coal in terms of the
Minerals Act. The same situation persisted even under the MPRDA.
Liquidation proved to be the only viable
option Sebenza had. And that
is the route it took. Its liquidators attempted to sell its coal
rights to Metsu Trading (Pty) Ltd
(Metsu) for R750 000, but the
sale was cancelled after the parties were advised that the rights had
ceased to exist under
the MPRDA.
26
[16] Sebenza eventually lodged a
claim for compensation in terms of Schedule II to the MPRDA, on
the grounds that the MPRDA
had expropriated its mineral rights. This
lodgment coincided with Agri SA’s decision to seek clarity from
a court of law
on its view that the commencement of the MPRDA had the
effect of expropriating mineral rights conferred on holders by the
Minerals
Act. In pursuit of this objective, it identified Sebenza’s
claim as the ideal test case for the vindication of the rights
of its
members which it believed the MPRDA had extinguished. Agri SA
procured Sebenza’s claim for compensation against the
payment
of R250 000. That claim was later rejected by the state.
[17] The rejection presented
Agri SA with the opportunity to get certainty on the status of
potential claims for compensation by
its members. As a result,
litigation commenced in the North Gauteng High Court, Pretoria (High
Court).
[18] The High Court
held that Sebenza’s mineral rights had been “legislated
out of existence”
27
and that this constituted a
deprivation in terms of section 25(1) of the Constitution.
28
It also held that this
deprivation amounted to expropriation because the substance of
Sebenza’s rights had been acquired by
the state which, through
the Minister, now grants mining rights to third parties with
substantially the same content as the right
that vested in the holder
of mineral rights before the commencement of the MPRDA. Aggrieved by
this decision, the Minister appealed
to the Supreme Court of Appeal.
[19] After
embarking on an extensive analysis of South African legal history in
relation to mining, the Supreme Court of Appeal
held that the
development of the law on mineral rights over the years was premised
on the basic philosophy that the right to mine
is under the
suzerainty of the state and its exercise is allocated from time to
time by the state as it deems appropriate.
29
The MPRDA was thus said to be
the latest iteration of legislation that confirms this principle. As
regards the value of mineral
rights, the Court said:
“
By
1991 the presence of minerals on or under land conferred no value on
the owner, unless the right to mine in respect of those
minerals was
also vested in the owner of the property. Even then the value lay not
in the person’s ownership of the land
but in their being the
holder of the mineral rights. As Heher JA put it in
Holcim
:
‘
Under
the Minerals Act 1991, (and previous to that Act) it was the mining
authorisation which conferred practical value on the mineral
rights
by authorising the exercise of those rights.’”
30
(Footnote omitted.)
[20] The Court held
that at the heart of the mineral right is the right to mine
31
which is a gift from the state.
32
Mineral rights are, it held,
devoid of any practical value in the absence of the right to mine.
33
And a mineral right in relation
to which the right to mine has not been secured does not constitute
property of which its holder
could be deprived or expropriated.
34
It held further that the
transitional arrangements ensured that the rights conferred on
holders of mineral rights after the conversion
of their old order
rights, overlapped to a large extent with those they previously
enjoyed.
35
For these reasons the Court
concluded that neither deprivation nor expropriation took place, and
set aside the decision of the High
Court.
36
Dissatisfied with the reversal
of its gains, Agri SA seeks leave to appeal to this Court.
Leave to appeal
[21]
This application raises a number of important constitutional matters.
These include deprivation of property and expropriation,
what the
concept of acquisition within the context of expropriation entails
and legislation that is aimed at broadening access
to opportunities
to exploit our mineral and petroleum resources.
[22]
The decision of this Court will be of importance not only to parties
to the dispute, the mining industry at large, landowners
and previous
holders of mineral rights but also to the vast majority of people who
were previously excluded and who, but for this
legislative
intervention, would have no properly structured access to the
lucrative mineral and petroleum resources of this country.
Agri SA
has reasonable prospects of success. It is in the interests of
justice for leave to appeal to be granted.
Leave
to cross appeal
[23]
The Minister sought leave for a conditional cross appeal. The cross
appeal relates to her contention that the Supreme Court
of Appeal did
not (i) set aside the order of Du Plessis J refusing her leave to
amend her plea in order to introduce further facts
relevant to the
determination of just and equitable compensation; and (ii) award her
the qualifying fees and costs of the expert
witness.
In
the view I take of the matter, leave to cross appeal should be
dismissed. This is so
because
the issue of compensation does not arise and
Biowatch
Trust v Registrar, Genetic Resources, and Others
37
stands in the way of the award
of qualifying fees and costs of the expert witness being made in
favour of the state against Agri
SA.
Issue
[24] At the epicentre of this
application is the question whether Sebenza’s mineral rights,
enjoyed during the subsistence
of the Minerals Act, were expropriated
when the MPRDA took effect.
Relevant provisions of the
MPRDA
[25] On
behalf of all the people of South Africa, the state is now the
custodian of the mineral and petroleum resources of this
country
which is their common heritage.
38
One of the objects of the MPRDA is to give effect to this principle
39
by granting various kinds of rights to successful applicants.
40
Prospecting, mining, exploration or production rights granted in this
manner are regarded as limited real rights.
41
Detailed provision is made for the grant, content and duration of the
rights.
42
If these rights are not appropriately exercised, they may be
suspended or cancelled.
43
Whenever the common law is inconsistent with the MPRDA, the latter
prevails.
44
[26] According to its long title, the MPRDA was enacted to facilitate
equitable access to and sustainable development of the nation’s

mineral and petroleum resources. This objective finds support from
the Preamble
45
which sets out a list of commitments which lie at the heart of the
MPRDA. They are, among others, the eradication of all forms
of
discriminatory practices in the mining sector. Also included is the
undertaking to take measures to address the effects of the
skewed
distribution of economic benefits which took place during the
apartheid era and the creation of a mining regime that is

internationally competitive and efficient.
46
[27] This synopsis of the objects of the MPRDA would be incomplete
without an outline of portions of the transitional arrangements,

relevant to mineral rights, which are provided for in Schedule II to
the MPRDA. The Schedule sets out additional objects of the
MPRDA, as
being to protect the security of tenure in respect of ongoing
prospecting, exploration, mining and production operations,
and to
give the holder of an old order right the opportunity to meet the
requirements of the MPRDA to sustain the continued enjoyment
of
pre-existing rights.
47
[28] Schedule II defines a “holder” of an old order right
as a person to whom that right was or is deemed to have been
granted
or by whom it is held or deemed to be held or that person’s
successor in title before the commencement of the MPRDA.
An “old
order right” is, in turn, said to be an old order mining
right,
48
old order prospecting right
49
or unused old order right.
50
The transitional provisions protect the entitlement of the person who
held the mineral rights in terms of the Minerals Act, to
benefit from
the exploitation of mineral and petroleum resources.
[29] The lifespan of an old order prospecting right was two years,
calculated from the coming into operation of the MPRDA.
51
A holder was expected to lodge the right for conversion within the
two-year period.
52
If the requirements were met, the Minister would have no choice but
to convert the old order prospecting right into a prospecting
right
in terms of the MPRDA.
53
[30] Any old order mining right that was in force when the MPRDA took
effect continued to be enjoyed by the holder for a period
of five
years from the date of commencement of the MPRDA.
54
It was convertible into a new order mining right during the
transitional period, subject to compliance with certain
requirements.
55
Items 6 and 7 of Schedule II to the MPRDA therefore conditionally
guaranteed holders of old order prospecting and mining rights
the
continued enjoyment of the equivalent of their mineral rights.
[31] Item 12 of the Schedule provides that any person who can prove
that his or her property has been expropriated in terms of
the MPRDA
may be entitled to compensation from the state. I find it convenient
to discuss the nature of the rights allegedly expropriated
and the
approach of the Supreme Court of Appeal to this matter, at this
stage.
The nature of the affected
rights
[32] Agri SA brought this application on the basis that Sebenza’s
mineral rights were extinguished by the commencement of
the MPRDA.
This begs the question, what rights did Sebenza have under the
Minerals Act which were taken away by the MPRDA? The
Minister agrees
that holders were deprived of their mineral rights but denies that
the state acquired those rights.
[33] In the main judgment, the Supreme Court of Appeal effectively
held that Sebenza’s mineral rights did not constitute
property,
while the concurring judgment found that what Sebenza had might have
had value, but that value was not in itself property.
56
I disagree with these judgments. Our fundamental difference lies in
the characterisation of property that Sebenza claims was expropriated

by the MPRDA.
[34] Central to the main judgment is the notion that, the “right
to mine . . . in the sense of the right to prospect and
mine for
minerals and extract and dispose of them, is vested in the state”
57
and that this has always been the case.
58
This “right to mine”, as opposed to its allocation, is
according to this reasoning not a regulatory matter, “but
a
matter of the substantive powers of the state in contrast to private
law rights to property”.
59
Because the “concept of mineral rights is founded on the right
to mine”,
60
which vests in the state by virtue of its “substantive powers”,
it follows from the main judgment that the existence
of separate and
independent mineral rights in private hands was illusory:
“
Underpinning
the development of varying forms of mineral rights over the years has
been the basic philosophy that the right to mine
is under the
suzerainty of the state and its exercise is allocated from time to
time, as the state deems appropriate.”
61
[35] It is, however, not clear what is meant by the proposition that
the “right to mine” is a matter of the “substantive

powers” of the state, or something under its “suzerainty”.
During the era of parliamentary supremacy, the state
could by
legislation allocate to itself substantive rights of ownership and
regulate the exploitation of minerals by those who
owned them. This
is not disputed. Beyond that it had no residual competence to exploit
or own minerals.
[36] Prior to the commencement of the MPRDA the state could, in
respect of private land, allocate these rights to exploit only
to
those who owned minerals. In some colonies, before the Union in 1910,
mineral ownership was reserved for the state.
62
But this was not so in the major mining areas of Griqualand West,
63
the Orange Free State
64
and the old South African Republic.
65
This position endured in the provinces of the unified South Africa
and did not change under the major mining consolidating legislation

of 1967 and 1991. Neither of these Acts granted the state any rights
to the mineral rights on private land beyond those it enjoyed

previously.
[37] The state also owned minerals on state land.
66
There was thus an inextricable link between ownership of mineral
rights and the right to exploit the minerals concerned.
67
[38] The
use of the concepts “right to mine” and “mineral
rights”, and the distinction made between them,
is potentially
misleading. The confusion arises from the fact that, before statutory
regulation of the exploitation of minerals,
the owner of minerals
68
could exploit the minerals without state authorisation, a situation
that existed in relation to base metals until the MPRDA came
into
operation.
69
“Mineral rights” in that original sense included both
ownership of minerals and the right to exploit them. The “right

to mine” the minerals formed part of the “mineral
rights”. Once the state assumed the regulatory authority for

the exploitation of minerals it became necessary to differentiate the
two aspects more clearly.
[39] That clarity could have been achieved by discarding the concepts
of the “right to mine” and “mineral rights”

in favour of “exploitation rights” and “ownership
of the minerals” respectively. It would thus be understood
that
prior to the commencement of the MPRDA the state had the power to
regulate the exploitation of minerals owned by either the
landowner
or, in the case of minerals notionally “separated” from
landownership, by the owner
70
of minerals.
71
[40] When
the state assumed regulatory authority, it could permit only mineral
owners to extract. Where ownership of minerals, separated
or not,
once gave unregulated entitlement to exploit, now the state has the
authority to decide when and how minerals may be exploited.
[41] Whenever the state sought to compel the exploitation of minerals
by third parties, it recognised the proprietary aspect or
value of
mineral ownership. Initial recognition took the form of paying
royalties to the owner of the minerals where prospecting
leases were
granted to third parties.
72
Under the Minerals Act expropriation was permissible only against
payment of compensation.
73
Prior to these legislative interventions, the state held no power of
compulsion to enforce the exploitation of privately owned
minerals.
[42] It remains to deal with the relationship between the value of a
right and its content. In
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
,
74
Ackermann J rejected the argument that a right’s lack of value
also meant its lack of proper content. That proposition was,
in his
view, an illegitimate conflation of two distinctly different legal
concepts.
75
I agree. The argument that a lack of value, or indeterminate value,
destroyed the existence of the right to ownership of minerals
before
the advent of the MPRDA is also unfounded.
[43] What is missing from both judgments of the Supreme Court of
Appeal is adequate acknowledgement of the entitlement not to mine,
or
the ability not to exploit minerals, as one of the essential
components of mineral ownership. As we have seen,
76
the legal position under the Minerals Act was that the holder’s
ability to sterilise or not to exploit the minerals could
only be
extinguished by expropriation and payment of compensation. That, on
its own, appears to be a complete answer to the notion
that mineral
ownership either had no independent existence or independent value.
[44]
Sterilisation of minerals was not dependent on the state’s
conferment of the right to mine, however understood. It stemmed
from
mineral ownership. And it was undoubtedly property with economic
value.
[45] Many people have an attachment to land for its own sake and
would prefer not to see the surface of their land disturbed through

the exploitation of minerals. Under the Minerals Act, farmers who
were not interested in mining could not, if they owned the minerals

on the land, be compelled to extract or consent to the extraction of
their minerals.
77
The economic value of minerals on agricultural land was enhanced by
the right not to exploit those minerals or the state’s

inability to compel the exploitation of privately-owned minerals.
[46] It
bears repeating that, although the exploitation of minerals was
subject to the regulatory power of the state, the state
could only
compel exploitation by expropriation against payment of compensation.
Agri SA alleges that deprivation of property,
envisaged by section
25, took place and rose to the level of expropriation.
The approach to interpreting
section 25
[47] I
find it useful to quote section 25 of the Constitution at this stage
which in relevant part provides:
“
(1) No one may be
deprived of property except in terms of law of general application,
and no law may permit arbitrary deprivation
of property.
(2) Property may be expropriated
only in terms of law of general application—
(a) for a public purpose or in
the public interest; and
(b) subject to compensation, the
amount of which and the time and manner of payment of which have
either been agreed to by those
affected or decided or approved by a
court.
. . .
(4) For the purposes of this
section—
(a) the public interest includes
the nation’s commitment to land reform, and to reforms to bring
about equitable access to
all South Africa’s natural resources;
and
(b) property is not limited to
land.”
[48] Deprivation within the context of section 25 includes
extinguishing a right previously enjoyed, and expropriation is a
subset
thereof.
78
Whereas deprivation always takes place when property or rights
therein are either taken away or significantly interfered with,
79
the same is not necessarily true of expropriation. Deprivation
relates to sacrifices that holders of private property rights may

have to make without compensation, whereas expropriation entails
state acquisition of that property in the public interest and
must
always be accompanied by compensation.
80
There is therefore more required to establish expropriation although
there is an overlap and no bold line of demarcation between
sections
25(1) and 25(2). Section 25(1) deals with all property and all
deprivations, including expropriation, although additional

requirements must be met for deprivation to rise to the level of
expropriation.
81
[49] When
a determination has to be made whether there was deprivation of
property, an affirmative answer would necessitate a further
enquiry
into the extent, if any, to which that deprivation limits the section
25(1) right. And if it does limit the right, whether
the limitation
is reasonable and justifiable in terms of section 36 of the
Constitution. A constitutionally invalid deprivation,
either because
it was not brought about through a law of general application or by
reason of its arbitrariness, would put an end
to the enquiry.
82
Deprivation
[50] Part of the inescapable reality in relation to the finding of
the Supreme Court of Appeal that Sebenza was not deprived of

anything, is that mineral rights holders used to enjoy rights which
they could dispose of as alluded to above. Under the old mineral

rights regime, holders had the latitude to sterilise mineral rights
for as long as they wanted to and benefit from their value-enhancing

effect on the land, if the right were not yet severed from
landownership. But even as a self-standing real right severed from
landownership, as in the case of Sebenza, it had value that
appreciated with time.
83
It could therefore be kept as a valuable investment or asset, be
bequeathed or mortgaged and constituted property as envisaged
by
section 25 of the Constitution.
[51] The
holders of mineral rights had the ability to prospect or mine.
84
After the commencement of the MPRDA, they had the exclusive
entitlement to apply for the right to prospect or mine but only for

one year. The free or unregulated right to sterilise mineral rights
was terminated with effect from 1 May 2004. Similarly, the
rights to
sell or lease mineral rights prior to securing the authorisation to
prospect or mine,
85
were extinguished at the same time, although they could be revived
later.
86
Under the MPRDA, prospecting and mining rights only existed, and
could only be sold or transferred, in terms of item 8 of the
transitional provisions.
87
That transfer was nevertheless subject to conditions which not every
landowner or holder of mineral rights was necessarily in a
position
to meet. Sebenza could for example not meet those requirements.
[52]
Holders of unused old order rights who could not apply for the right
to prospect or mine within the window period created by
the MPRDA
transitional provisions, or whose applications were unsuccessful,
lost all their mineral rights permanently. In that
event their loss
was not merely confined to the extinction of the right to sterilise,
the monopoly and the suspension of the right
to sell or lease the
mineral rights, but was also a total and permanent loss. Even if the
mineral rights had been bought, as in
the case of Sebenza, the
possibility to recoup the purchase price or a portion of it was
totally lost.
[53]
It follows that the MPRDA, which is a law of general application, had
the effect of depriving Sebenza, and a similarly-positioned
holder of
a pre-existing mineral right, of elements of that right, as correctly
conceded by the Minister. It is common cause between
the parties that
the deprivation was not arbitrary, and this is correct considering
both the objects of the MPRDA and the transitional
arrangements. Did
this deprivation rise to the level of expropriation?
Expropriation
[54]
Agri SA contends that the MPRDA—
(a) destroyed Sebenza’s
coal rights which encompassed the entitlements to enter the land with
employees, prospect for or mine
minerals and dispose of them as well
as the competencies to keep, transfer, bequeath, encumber or lease
the rights;
(b) vested in the Minister a
public law power or competency to confer upon third parties, by means
of a prospecting or mining right
created by the MPRDA, the
entitlements tabulated in (a) above, subject to ministerial consent
in terms of section 11 of the MPRDA;
and
(c) imposed the obligation to
compensate on the state, which is the expropriator.
[55]
Agri SA also says that Sebenza could not apply for a prospecting or
mining right because it was not in a financial position
to do so.
After liquidation, section 56(d) of the MPRDA
88
precluded it from being granted
the right to prospect or mine. The possibility to cede or transfer
any prospecting or mining right
to Metsu in terms of section 11 of
the MPRDA was thus not open to Sebenza owing to the operation of
section 56(d). Sebenza was
deprived of the right—
(a) not to prospect or mine and
to prevent anybody else from doing so;
(b) to preserve the option to
prospect or mine later; and
(c) to sell or lease the right
to prospect or mine to any person of its choice.
[56]
Agri SA argues further that when the MPRDA took effect, it deprived
Sebenza of its mineral rights. While it accepts that the
state did
not itself acquire the right to prospect or mine, it however contends
that the state destroyed Sebenza’s mineral
rights so as to
release them for allocation to third parties. It basically takes the
position that the coming into operation of
the MPRDA expropriated
Sebenza’s mineral rights held under the Minerals Act. To Agri
SA expropriation is essentially about
ending the rights of an
expropriatee and the consequential acquisition of new rights
equivalent but not necessarily identical to
those lost by the
expropriatee. It argues that the issue is not whether the state
acquired rights identical to those held by the
likes of Sebenza under
the Minerals Act. The issue is whether the regulatory framework
introduced by the MPRDA conferred rights
on the state which are
substantially similar to the lost mineral rights, to facilitate the
grant of those rights to third parties.
In sum, Agri SA contends that
mineral rights were extinguished and vested in the Minister, on
behalf of the state, to have them
enjoyed by any third party to whom
she may decide to grant them.
[57]
Both the Minister and CALS reject Agri SA’s contention that the
commencement of the MPRDA brought about an expropriation
of Sebenza’s
pre-existing mineral rights and the nuanced meaning sought to be
given to the notion of acquisition within the
context of
expropriation. The Minister argues that the state did not acquire
mineral rights as a result of the deprivation that
admittedly took
place.
[58]
To prove expropriation, a claimant must establish that the state has
acquired the substance or core content of what it was
deprived of. In
other words, the rights acquired by the state do not have to be
exactly the same as the rights that were lost.
There would, however,
have to be sufficient congruence or substantial similarity between
what was lost and what was acquired. Exact
correlation is not
required. In
Harksen
, Goldstone J had this to say about
expropriation:
“
The
word ‘expropriate’ is generally used in our law to
describe the process whereby a public authority takes property

(usually immovable) for a public purpose and usually against payment
of compensation. Whilst expropriation constitutes a form of

deprivation of property, section 28 makes a distinction between
deprivation of rights in property, on the one hand
.
. .
and
expropriation of rights in property, on the other
.
Section
28(2) states that no deprivation of rights in property is permitted
otherwise than in accordance with a law. Section 28(3)
sets out
further requirements which need to be met for expropriation, namely
that the expropriation must be for a public purpose
and against
payment of compensation.
The distinction
between expropriation (or compulsory acquisition as it is called in
some other foreign jurisdictions) which involves
acquisition of
rights in property by a public authority for a public purpose and the
deprivation of rights in property which fall
short of compulsory
acquisition has long been recognised in our law.”
89
(Footnotes omitted.)
[59]
In addition, in
Reflect-All
, Nkabinde J had this to say about
when expropriation takes place:
“
The
applicants argued that section 10(3) is inconsistent with the
constitutional guarantee against uncompensated expropriation of

property. I do not agree. Although it is trite that the Constitution
and its attendant reform legislation must be interpreted purposively,

courts should be cautious not to extend the meaning of expropriation
to situations where the deprivation does not have the effect
of the
property being acquired by the state. It must be emphasised that
section 10(3) does not transfer rights to the state. .
. . As I have
said, the state has not acquired the applicants’ land as
envisaged in sections 25(2) and 25(3) of the Constitution.
For that
reason, no compensation need be paid.”
90
There
can be no expropriation in circumstances where deprivation does not
result in property being acquired by the state.
[60]
The approach to be adopted in interpreting section 25, with
particular reference to expropriation, is to have regard to the

special role that this section has to play in facilitating the
fulfillment of our country’s nation-building and reconciliation

responsibilities, by recognising the need to open up economic
opportunities to all South Africans. This section thus sits at the

heart of an inevitable tension between the interests of the wealthy
and the previously disadvantaged. And that tension is likely
to
occupy South Africans for many years to come, in the process of
undertaking the difficult task of seeking to achieve the equitable

distribution of land and wealth to all.
91
[61] Section 25(4)(a) enjoins
the courts to bear in mind, as they interpret section 25, that the
public interest referred to in
section 25(2) includes the nation’s
commitment to land reform and reforms to bring about equitable access
to all of our natural
resources. We must therefore interpret section
25 with due regard to the gross inequality in relation to wealth and
land distribution
in this country. And by design, the MPRDA is meant
to broaden access to business opportunities in the mining industry
for all,
especially previously disadvantaged people. It is not only
about the promotion of equitable access, but also about job creation,

the advancement of the social and economic welfare of all our people,
the promotion of economic growth and the development of our
mineral
and petroleum resources for the common good of all South Africans.
[62]
This brings to the fore the obligation imposed by section 25 not to
over-emphasise private property rights at the expense of the
state’s social responsibilities. It must always be remembered

that our history does not permit a near-absolute status to be given
to individual property rights to the detriment of the equally

important duty of the state to ensure that all South Africans partake
of the benefits flowing from our mineral and petroleum resources.
92
[63]
There is much to be said for the view that too narrow a meaning of
acquisition, stemming from a deprivation, could militate
against the
constitutional protection sought to be given to property rights in
terms of section 25(2) of the Constitution. Equally
apposite is the
proposition that an overly liberal interpretation of the concept of
acquisition could blur the line drawn by our
Constitution between
deprivation in section 25(1) and expropriation in section 25(2). More
tellingly, it could undermine the constitutional
imperative to
transform our economy with a view to opening up access to land and
natural resources to previously disadvantaged
people, as envisaged by
section 25(4) of the Constitution. This would also affect the need to
create jobs, grow our economy by
developing these resources in a
sustainable way and guarantee security of tenure to those prospecting
for or exploiting mineral
and petroleum resources.
93
Additionally, a proper meaning
to give to the notion of acquisition should pose no threat to the
possibility of maintaining a sensitive
balance between existing
private property rights and the pursuit of transformation that
section 25 was designed to facilitate.
94
[64] A
one-size-fits-all determination of what acquisition entails is not
only elusive but also inappropriate particularly when
an alleged
expropriation of incorporeal rights, like mineral rights, is
considered. A case by case determination of whether acquisition
has
in fact taken place presents itself as the more appropriate way of
dealing with these matters. This is so because acquisition
is likely
to assume many variations in its manifestation,
95
especially as a result of the
nature of the right involved. In this case for example, the source,
nature and content of the affected
incorporeal rights as well as
measures taken to interfere with them or to preserve their essence
would be of special significance
in giving a contextual meaning to
acquisition. Equally important is a recognition of the need to
protect individual property rights
as well as the facilitation of
sustainable development, eradication of all forms of discriminatory
practices in the mining industry
and equitable access to the mineral
and petroleum resources of this country, to all its people.
[65]
Incidental to the problems sought to be addressed through the MPRDA
is the inequitable distribution of land stemming from our
unpleasant
past. The historical inextricable link between landownership and
mineral rights ownership equally explains why the vast
majority of
black people do not have access to the mineral and natural resources
of our land. The determination of expropriation,
in a matter like
this, cannot therefore be merely surgical or mechanical. A fine
balance must be struck between the interest of
those deprived by the
MPRDA, and the need to create jobs, grow the economy through the
expanded development of the mining industry
and open up opportunities
for those sought to be made fellow partakers in the equitable access
to mineral resources, brought into
being by the MPRDA.
[66]
What the MPRDA in effect did was to put an end to the: (i) ability to
sterilise or not to exploit minerals; (ii) previously
unfettered
entitlement to sell, lease or cede the mineral right at any time; and
(iii) mineral right or unused old order right
for which a prospecting
or mining right could not be acquired in terms of the transitional
provisions. All this was however done
within the context of
Parliament, through the MPRDA, having painstakingly done everything
reasonably possible to help the holders
comply with the requirements
so as to preserve their rights. And once the requirements were met,
the rights could be disposed of
or enjoyed under a much more secure
tenure than ever before.
[67] Sebenza was
deprived of components of its mineral rights in that the MPRDA
brought about a substantial interference and limitation
that went
beyond the normal restrictions on the use or enjoyment of its
property found in an open and democratic society.
96
Although expropriation is a
species of deprivation, there are additional requirements that set
expropriation apart from mere deprivation.
They are (i) compulsory
acquisition of rights in property by the state, (ii) for a public
purpose or in the public interest, and
(iii) subject to compensation.
[68] The MPRDA is
the legal instrument through which Sebenza was deprived of its coal
rights. This therefore is a compulsory deprivation.
The custodianship
of this and other mineral and petroleum resources is, in terms of the
MPRDA, vested in the state on behalf of
the people of South Africa.
The critical question is, however, whether this deprivation, the
assumption of custodianship and the
power to grant others what could
previously have been granted only by holders, means that the state
acquired ownership of rights
to these mineral and petroleum
resources. The answer is no. Unlike in the case of the state (i)
acquiring land for governmental
projects such as road infrastructure,
industrial development or other purposes, and (ii) acquiring mineral
rights so that it could
exploit them, in this case the state did not
acquire any mineral rights, including those of Sebenza, at the
commencement of the
MPRDA. The state, as the custodian of these
resources, is not seeking or supposed to be a
co-contender with
people or business entities for the right to prospect for or mine
these minerals.
97
It is a facilitator or a conduit
through which broader and equitable access to mineral and petroleum
resources can be realised.
[69]
A contention that, although the state has admittedly not acquired
Sebenza’s rights to own and to exploit minerals, it
has
nevertheless expropriated these rights is without merit. The
deprivation in this matter evidently has no known comparable
expropriation-equivalent that could be cited by Agri SA. An assertion
by Agri SA that the state has in terms of the correct interpretation

of section 25 expropriated the mineral rights, is an overly liberal
one. It disregards the public interest and constitutional imperative

to transform and facilitate equitable access to our mineral and
natural resources, to which courts are enjoined to have regard
when
construing section 25.
[70]
Agri SA’s contention that because the Minerals Act treated or
classified the forced exploitation of privately owned mineral
rights
as compensable expropriation, so should the MPRDA, misses the point.
The previous legislation regulated access to minerals
and their
exploitation within the context of the apartheid regime which was all
about the exclusion of black people from access
to private
landownership and the exploitation of mineral and natural resources,
and the protection of the privileges of their white
compatriots. An
important difference-maker in this case is section 25 which could
never before have been a factor in interpreting
the minerals
legislation in relation to expropriation. Now, unlike before, private
mineral ownership rights are not to be over-emphasised
at the expense
of the urgent and critical need to open up equitable access to, and
promote economic development through the exploitation
of our mineral
and petroleum resources.
[71]
While it is correct that the state is the custodian of all our
mineral and petroleum resources on behalf of the people of South

Africa, this did not however take away the substance of unused old
order rights from their holders. But for sterilisation, the
core
right was left intact and capable of full enjoyment by those who
wished to and were able to exploit it. Neither the state
nor other
entities or people acquired the rights to sterilise, monopolise the
exploitation of minerals or sell, lease or cede Sebenza’s
old
order rights on 1 May 2004. The MPRDA, subject to the transitional
arrangements, put an end to the rights without necessarily

transferring them to the state. For purposes of this case, it is not
necessary to define the word “custodian”. What
is however
clear is that, whatever “custodian” means, it does not
mean that the state has acquired and thus has become
owner of the
mineral rights concerned.
[72] Sebenza could not convert
and exploit its coal rights because of its precarious financial
position. The possibility to preserve
and continue to enjoy the
unused old order right was available to Sebenza and
similarly-situated holders. But Sebenza failed to
take advantage of
it. The MPRDA cannot therefore be held to be an instrument by which
Sebenza’s rights were expropriated
at commencement. The appeal
must fail.
Conclusion
[73] The MPRDA constitutes a
break through the barriers of exclusivity to equal opportunity and to
the commanding heights of wealth-generation,
economic development and
power. It seeks to address the injustices of the past in the economic
sector of our country in a more
balanced way, by treating individual
property rights with the care, fairness and sensitivity they deserve.
[74]
It is for this reason that the transitional arrangements exist and
were so carefully designed to alleviate potential hardship
and
prevent expropriation. That the MPRDA does make provision for
expropriation was, in my view, more of a cautious approach to
provide
for unforeseeable eventualities, than an acknowledgment or
reinforcement of an accepted reality that the MPRDA necessarily
has
signposts of expropriation.
[75]
It would, however, be inappropriate to decide definitively, that
expropriation is in terms of the MPRDA incapable of ever
being
established. Like the Supreme Court of Appeal, I accept that a case
could be properly pleaded and argued, to demonstrate
that
expropriation did take place. That is the avenue that must be left
open, particularly when regard is had to the express
provision made
for expropriation in item 12 of Schedule II to the MPRDA.
Order
[76] In the result the
following order is made:
1. Leave to appeal is granted.
2. The appeal is dismissed.
3. There will be no order for costs.
CAMERON J:
[77] I
concur in the order and, subject to one reservation, support the
reasoning the judgment of Mogoeng CJ lucidly sets out.
The
reservation is this. I share the caution Froneman J expresses
regarding the main judgment’s finding that acquisition
by the
state is a necessary feature of expropriation under section 25 of
the Constitution.
[78]
Acquisition by the state is, in my view, a general hallmark of
expropriation. But not necessarily and inevitably so. Whether
an
expropriation contemplated by section 25 has occurred is – as
the main judgment finds– a context-based enquiry,
demanding a
case by case approach. I therefore agree with Froneman J that it is
inadvisable to extrapolate an inflexible general
rule of state
acquisition as a requirement for all cases.
FRONEMAN J (Van der Westhuizen J concurring)
:
[79] I
agree that the appeal should be dismissed, but solely on the basis
that the unused old order rights
98
conferred on the applicant under the Mineral and Petroleum Resources
Development Act
99
(MPRDA) constituted just and equitable compensation for what it
previously had and has now lost. I believe that this is also
the
substantive reason that underlies the judgment of the Chief Justice
(main judgment), but the judgment ultimately grounds
its conclusion
in the propositions that (1) state acquisition is an essential
requirement for expropriation,
100
and (2) in this case there was no state acquisition.
101
I am unable to agree with either assertion.
[80] The MPRDA abolished private ownership of minerals, based either
on land ownership or the holding of severed real rights
to the
minerals, which existed under the mining law dispensation enacted
prior to the Constitution.
102
In its stead the MPRDA introduced a mineral law dispensation in
terms of which the state became the custodian of mineral resources

with the power to allow exploitative access to those resources to
all the people of South Africa.
103
In view of our history it can hardly be argued that the
institutional change of legal regime is not just and equitable.
104
But I find it unconvincing, both in plain language and legal
conceptualisation, to say that the power of disposition that private

mineral ownership entailed was not acquired or does not now vest in
the state.
[81]
Previously, private owners of minerals had the power or competence
to decide whether to exploit minerals they owned and to
whom they
could give their exploitation rights. It was an incidence of
ownership.
105
Now the state has that power or competence by virtue of its
custodianship of mineral resources under the MPRDA.
106
It may not have acquired the right to exploit the minerals, but it
has acquired the power to allocate and dispose of the exploitation

rights. What private owners of minerals previously had in this
regard, the state now has. It really seems as plain and simple
as
that to me. In my view plain speaking is what the Constitution
requires of us when the contested subject of property rights
arises,
as is the case here.
[82]
Access to the generous mineral resources of South Africa has to a
large extent, determined the course of this country’s
history.
It is a history with many dimensions, but inescapably part of it is
one of racial dispossession and capitalist development.
Within that
context there remain contested aspects, different histories.
107
Fortunately the Constitution and the MPRDA allow us to transcend
that contested past. The former providing us with the means
to deal
with property contestation, and the latter giving concrete
expression, in a particular way, to the use of that constitutional

approach.
[83] In
the
First Certification case
it was stated that our past was—
“
aptly
described as that of ‘a deeply divided society characterised
by strife, conflict, untold suffering and injustice’
which
‘generated gross violations of human rights, the transgression
of humanitarian principles in violent conflicts and
a legacy of
hatred, fear, guilt and revenge’”.
108
The
choice made to deal with this past was that of the “historic
compromise”
109
that eventually resulted in the adoption of the Constitution by the
Constitutional Assembly and its certification by this Court.
110
[84]An important part of the content of that
compromise is to be found in section 25 of the Constitution.
111
In
FNB
112
this Court found, in the words of Ackermann J, that—
“
the
purpose of s 25 has to be seen both as protecting existing private
property rights as well as serving the public interest,
mainly in
the sphere of land reform but not limited thereto, and also as
striking a proportionate balance between those two functions.”
113
[85] The
MPRDA is not legislation that explicitly seeks to give effect to and
circumscribe a fundamental right in the manner of,
for example, the
Promotion of Administrative Justice Act,
114
Promotion of Access to Information Act
115
or the Labour Relations Act,
116
but in my view its provisions need to be interpreted in a manner
that is best consistent with section 25. An interpretation that
best
accords with the “spirit, purport and objects”
117
of section 25 is what is called for.
118
[86] One
way of approaching the issue here is to lay down general and
definitive requirements of what constitutes expropriation
and then
to determine whether these requirements were met in the present
case, as was done in the main judgment. I do not think
that is an
appropriate approach to the provisions of the MPRDA.
[87] The
MPRDA seeks to introduce a completely new legal regime in respect of
our mineral and petroleum resources. Its transitional
provisions are
clearly aimed at making the transition fair and equitable to
pre-existing rights holders, as well as to those
who were previously
deprived from the benefits of exploiting the country’s mineral
and petroleum resources. But the provision
for compensation
119
upon proof of expropriation appears to acknowledge the existence of
the possibility that the legislative balancing of competing

interests might, in individual cases, not have met the required
standard of justice and equity. Is there an acceptable alternative

interpretive approach that would justify not using the conventional
one used in adjudging normal expropriation cases? I believe
there
is.
[88]
Section 25 provides the constitutional norm when pre-existing
property is taken away and distributed or allocated under a
new
legal dispensation. As explained in
FNB
, section 25 seeks to
balance existing rights with the public interest. That is also what
the MPRDA seeks to do, albeit not in
the form of monetary
compensation. The balance consists in ensuring the continuation of a
substituted form of the pre-existing
right for a limited period of
time within which the pre-existing rights holder has the exclusive
right to convert this into MPRDA
rights. For convenience this can be
called ‘compensation in kind’. It seems to me that
interpreting the MPRDA on
the basis that its ‘compensation in
kind’ should be read as giving alternative legislative content
to the just and
equitable compensation provision for expropriation
in section 25(3) of the Constitution
120
is justified. In my view it is the interpretation that will give
best effect to the dictates of section 25. It will be an
acknowledgement
that pre-existing rights have been taken away to be
allocated by the state under a new legal dispensation, but that the
Legislature
has attempted to compensate for the loss in a just and
equitable manner. And it will have the practical advantage that
courts
may cut to the chase to determine whether the ‘compensation
in kind’ provided by the provisions of the MPRDA is
substantively
equivalent to the just and equitable compensation
required by section 25 without having to wrestle their way through
formalistic
requirements for expropriation. This approach to
interpretation does not mean that the mere inclusion of
‘compensation
in kind’ provisions immunises legislation
from a finding that expropriation occurred and that compensation may
yet be payable.
[89]
There is another advantage to locating the equivalence issue within
the just and equitable compensation provision of section
25, one
that has a deep resonance with the “historic compromise”
that section 25 exemplifies. All that section 25
asks for is an
acknowledgement when pre-existing property is taken away by the
state and allocated differently. When that acknowledgement
is made,
the previously advantaged may only expect fair and equitable
compensation in the context of the need to redress past
wrongs for
what they have lost, not the equivalent of that loss.
[90] The
constitutionally best interpretation of the MPRDA is thus, in my
view, that the transitional measures should be interpreted
as
‘compensation in kind’ measures that seek to give effect
to the just and equitable compensation for property in
terms of the
provisions of section 25 of the Constitution. In a compensation case
brought in terms of item 12 of Schedule
II to the MPRDA the
crucial issue to be determined will be whether, on the facts of the
particular case, the ‘compensation
in kind’ provided for
by the MPRDA is substantively equivalent to “just and
equitable compensation” in terms
of section 25.
[91] I acknowledge that there is no precedent for this approach.
That is because this Court is faced for the first time with

legislation that seeks to effect an institutional change to the
legal regime that applies to the exploitation of this country’s

mineral and petroleum resources.
121
Large-scale transformational legislation of this nature presents
challenges of a special kind. There is no binding precedent
of this
Court that precludes a new and fresh approach to the issue.
[92]
Approaching the provisions of the MPRDA from this perspective also
dispenses with the need to enter into a formal analysis
of when a
deprivation becomes expropriation. I consider that to be an
advantage here. Before this Court it was common cause that
a
non-arbitrary deprivation occurred. The first step of the
FNB
analysis thus needs no further attention.
[93] Section 25 does not tell us what the difference between
deprivation and expropriation of property is, only that compensation

is payable when there is expropriation. That begs the question when
compensation is payable.
FNB
122
established that expropriation is a subset of deprivation and that
sometimes one need go no further than a purely deprivation
analysis
to decide expropriation disputes, namely, when the deprivation is
arbitrary.
123
In
Harksen
124
on the other hand, the deprivation analysis was skipped and this
Court went directly to a discussion of expropriation. What this

conveys is the need for flexibility in approaching expropriation
issues in different contexts.
[94]
There is no harm in admitting that the deprivation/expropriation
distinction is merely a conceptualisation in legal terms,
made in
order to arrive at a conclusion of when compensation ought to be
payable under section 25. And almost invariably the
formal
distinction in terms of the legal analysis is based on a substantive
notion of when it is just to pay compensation. That
means that when
it is possible directly to assess the justness and equity of whether
compensation should follow, it is not necessary
to use the
intermediate road of formal analysis. If the MPRDA’s
‘compensation in kind’ equals the just and
equitable
standard of section 25(3), viewed in our historical context, it is
enough; there is no need to go further.
[95] But
if letting go of the formal deprivation/expropriation analysis is
too difficult to stomach, the same result may be reached
in a
different manner, as experiences in other jurisdictions show.
[96] The German Constitution allows for the
deprivation of property without payment of compensation in certain
circumstances.
125
In the case of
Jahn v Germany
126
the European Court of Human Rights (ECHR) was called upon to decide
whether the failure to pay compensation to the applicants
breached
the provisions of article 1 of Protocol 1 to the European Convention
on Human Rights.
127
[97] The
applicants in
Jahn
relied on their inherited right to
property in East Germany before reunification. After the
occupation of East Germany in
1945 the right to dispose of property
in relation to agricultural land was abolished. Agricultural land
reverted back to a pool
of state land when the holder of the right
to the land lost that right. After the fall of the Berlin Wall and
before reunification,
the East German parliament passed a law that
reinstated the rights of disposal to holders of property. Within a
couple of years
of reunification the German parliament reversed
this, with the result that the applicants, who had obtained their
right to the
property through inheritance and not original
acquisition, were dispossessed of those rights. No compensation was
paid to them.
The German Federal Constitutional Court held that this
was not unconstitutional. The applicants turned, eventually, to the
ECHR.
[98] By a
majority of 11 votes to 6 the ECHR held that there had been no
breach of article 1 of Protocol 1. What is of particular
relevance
is the Court’s treatment of its requirement that “a
total lack of compensation can be considered justifiable
under
article 1 of Protocol 1 only in exceptional circumstances”.
128
The ECHR held that exceptional circumstances did exist on the basis
of the following reasoning of the German Federal Constitutional

Court:
“
Three
factors seem to it to be decisive in that connection:
(i) first, the circumstances of
the enactment of the Modrow Law, which was passed by a parliament
that had not been democratically
elected, during a transitional
period between two regimes that was inevitably marked by upheavals
and uncertainties. In those
conditions, even if the applicants had
acquired a formal property title, they could not be sure that their
legal position would
be maintained, particularly as in the absence
of any reference to heirs in the Modrow Law, the position of those
among them who
were not farming the land themselves and were not
members of an agricultural co-operative remained precarious even
after that
Law had come into force;
(ii) secondly, the fairly short
period of time that elapsed between German reunification becoming
effective and the enactment
of the second Property Rights Amendment
Act. Having regard to the huge task facing the German legislature
when dealing with,
among other things, all the complex issues
relating to property rights during the transition to a democratic,
market-economy
regime, including those relating to the liquidation
of the land reform, the German legislature can be deemed to have
intervened
within a reasonable time to correct the
-
in its
view unjust
-
effects of the Modrow Law. It cannot be
criticised for having failed to realise the full effect of this Law
on the very day on
which German reunification took effect;
(iii) thirdly, the reasons for
the second Property Rights Amendment Act. In that connection the FRG
Parliament cannot be deemed
to have been unreasonable in considering
that it had a duty to correct the effects of the Modrow Law for
reasons of social justice
so that the acquisition of full ownership
by the heirs of land acquired under the land reform did not depend
on the action or
non-action of the GDR authorities at the time.
Likewise, the balancing exercise between the relevant interests
carried out by
the Federal Constitutional Court, particularly in its
leading decision of October 6, 2000, in examining the compatibility
of
that amending Law with the Basic Law, does not appear to have
been arbitrary.  Given the ‘windfall’ from

which the applicants undeniably benefited as a result of the Modrow
Law under the rules applicable in the GDR to the heirs to
land
acquired under the land reform, the fact that this was done without
paying any compensation was not disproportionate.  It

should also be noted in that connection that the second Property
Rights Amendment Act did not benefit the State only, but in
some
cases also provided for the redistribution of land to farmers.
Having regard to all the
foregoing considerations and taking account, in particular, of the
uncertainty of the legal position
of heirs and the grounds of social
justice relied on by the German authorities, the Court concludes
that in the unique context
of German reunification, the lack of any
compensation does not upset the ‘fair balance’ which has
to be struck between
the protection of property and the requirements
of the general interest.”
129
(Footnotes omitted.)
[99]
The parallels with the situation in our country are striking:
property derived from a tainted past; the challenges of
transformation;
and the demands of justice. In its particular
context the ECHR’s decision may be seen as refusing
compensation even where
there has, in our language, been
expropriation. This Court recognised the possibility of
expropriation without compensation in
FNB
,
130
and the same result that I have reached by a direct ‘compensation
in kind’ approach may be reached by this more conventional

route on a case by case basis under the MPRDA.
131
[100] It
remains to deal directly with the findings in the main judgment that
acquisition by the state is a necessary requirement
for
expropriation in terms of section 25, and that the state acquired
nothing of the sort under the MPRDA.
[101] I
stated earlier
132
that there is no binding precedent of this Court in relation to the
kind of institutional change of the legal dispensation which
is at
stake under the MPRDA.
Harksen
133
dealt with a provision of the Insolvency Act
134
and
Reflect-All
135
with regulatory provisions that did not seek to change the
institutional legal system in any way.
136
Neither case dealt with the nature of change brought about by
vesting the natural resources of the country in the state as

custodian of those resources for the benefit of the people of South
Africa. Nor does the main judgment address the issue squarely.
137
[102]
FNB
laid down no requirement of state acquisition as
an inflexible requirement for expropriation.
138
It would be inadvisable to extrapolate an inflexible general rule of
state acquisition as a necessary requirement from these
cases to the
current one. I say so for the following reasons.
[103]
First, foreign jurisprudence recognises that expropriation may take
place even if the disposed rights or property have not
been acquired
by the state.
139
[104] The
second is illustrated by the discussion in the main judgment of the
need to steer between an overly generous approach
to the notion of
acquisition and a too restrictive one.
140
The resulting choice inevitably is a definitional exclusion of
possibly worthy individual cases. I do not see how, on the approach

adopted in the main judgment, there can be any sustainable argument
that the MPRDA expropriated any rights under the previous
mining
dispensation. The MPRDA is foundationally based on a system where
the state, as custodian, allocates mining entitlements.
If that
foundation does not mean that the state has acquired a competence
previously held by private owners of minerals, then
none of the
pre-existing rights have been expropriated. It is even difficult to
imagine, given that definitional foundation,
how there can be
‘administrative’ expropriation of rights under the MPRDA
itself. If, no matter what rights are taken
away and to whom they
are allocated, the necessary requirement of state acquisition is
absent, how can there ever be expropriation?
[105]
This leads to the final reason. If private ownership of minerals can
be abolished without just and equitable compensation
- by the
construction that when the state allocates the substance of old
rights to others it does not do so as the holder of
those rights -
what prevents the abolition of private ownership of any, or all,
property in the same way? This construction in
effect immunises, by
definition, any legislative transfer of property from existing
property holders to others if it is done
by the state as custodian
of the country’s resources, from being recognised as
expropriation.
141
This is done without a thorough examination of what the entirely new
legal concept of state custodianship holds for our law or
whether
the transfer will be just and equitable. In that way one of the
crucial aspects of our historical compromise, the equitable

balancing between the protection of existing property rights and the
public interest under section 25, is bypassed. I find that

unfortunate.
[106] But
even if acquisition is a necessary requirement for expropriation, as
the main judgment holds, I do not see how it can
be avoided that the
state acquired, in a material and substantive sense, at least some
of the power and competencies that previously
vested in private
ownership. As a last illustration: under the Minerals Act
142
the state could enforce exploitation of minerals against the will of
the holder of the mineral rights, but then the owner was
entitled to
compensation.
143
Under the MPRDA the right to compensation has been lost. In ordinary
language that means that the money that the owner would
have
received under the Minerals Act is now kept by the state. To me that
looks like the acquisition of the benefit by the state.
[107] To
return then, to the facts and the reasons why, under the
‘compensation in kind’ approach, I nevertheless
think
the appeal must fail. As already indicated there are in my view
substantive differences between the nature, content and
duration of
transitional and eventual substantive rights under the MPRDA and
pre-existing mineral ownership rights. Those general
differences at
first blush seem to be justified by equivalence between the
‘compensation in kind’ measures of the
MPRDA and the
“just and equitable compensation” requirements under
section 25. More particularly, the transitional
provisions of the
MPRDA seek to provide ‘compensation in kind’ to those
who were already exploiting the minerals,
or those who contemplated
doing so. This emphasis on the effective exploitation of minerals is
legitimate and rational when viewed
from a public interest or public
purpose perspective.
[108] For
those who acquired mineral ownership pre-MPRDA with a view to
exploitation of the minerals, it might prove difficult
to show that
the MPRDA’s ‘compensation in kind’ provisions do
not measure up to section 25 “just and
equitable compensation”
standards. But the MPRDA provides no ‘compensation in kind’
to those who did not want
to exploit the minerals they owned
previously. As pointed out earlier in the main judgment,
144
pre-MPRDA mineral ownership also had non-exploitation value. It may
well be that persons falling within this category have the
best
chance of proving that the lack of ‘compensation in kind’
under the MPRDA translates to compensable expropriation
under item
12 of Schedule II to the MPRDA.
[109]
Sebenza (Pty) Ltd does not fall within this category. It wanted to
exploit its mineral ownership, but could not do so because
of
intervening insolvency. It was not the inadequacy of the MPRDA’s
‘compensation in kind’ provisions that
caused it not to
utilise those provisions.
[110]
I thus agree that the appeal must fail and concur in the order made
in the main judgment.
For
the Applicant: Advocate G Grobler SC and Advocate J Gildenhuys
instructed by MacRobert Inc. Attorneys.
For
the Respondent: Advocate C Badenhorst SC and Advocate M Wesley
instructed by the State Attorney.
For
the First and Second Amici Curiae: Advocate M Brassey SC and
Advocate M Engelbrecht instructed by Hurter Spies Inc.
For
the Third Amicus Curiae: Advocate M du Plessis and Advocate J
Brickhill instructed by the Legal Resources Centre.
For
the Fourth Amicus Curiae: Mr D Ribbens instructed by Ribbens Inc.
Attorneys.
1
28
of 2002.
2
Now
the Minister for Mineral Resources.
3
This
was possible, subject to prescribed exceptions, under the Minerals
Act 50 of 1991 (Minerals Act). See section 5 read with
sections 6(1)
and 9(1).
4
An
association not for gain incorporated in terms of section 21 of the
Companies Act 61 of 1973 (Companies Act).
5
See
sections 14, 17 and 23 of the MPRDA.
6
An
association not for gain incorporated in terms of section 21 of the
Companies Act. Also known as Afriforum.
7
A
business organisation which has as its main goals the protection of
the Constitution, keeping the free market system intact
and the
holistic protection of constitutional property rights.
8
See
Anglo Operations Ltd v Sandhurst Estates (Pty) Ltd
2007 (2)
SA 363
(SCA) (
Anglo
) at para 16;
Union Government
(Minister of Railways and Harbours) v Marais and Others
1920 AD
240
at 246;
Rocher v Registrar of Deeds
1911 TPD 311
at 315
and Mostert
Mineral Law: Principles & Policies in Perspective
(Juta & Co Ltd, Cape Town 2012) at 7.
9
Badenhorst
“Ownership of minerals in situ in South Africa: Australian
darning to the rescue”
(2010) 127
SALJ
646
at 649.
10
Mostert
above n 8 at 10. A landowner may not have had the financial
capabilities or interest in developing the mineral potential
that
existed on the land, but was more than willing to allow a third
party to do so, subject to the payment of consideration
in return
for the right to do so.
11
Edwards
(Waaikraal) GM Co., Ltd. v Mamogale, N.O., and Bakwena Mines, Ltd
1927 TPD 288
at 307. As to the ways in which this could be done, see
Mostert id at 8-11.
12
Trojan
Exploration Co (Pty) Ltd and Another v Rustenberg Platinum Mines Ltd
and Others
[1996] ZASCA 74
;
1996 (4) SA 499
(AD) at 509G-H and
Van Vuren and
Others v Registrar of Deeds
1907 TS 289
(
Van Vuren
) at
295. See Dale
An Historical and Comparative Study of the Concept
and Acquisition of Mineral Rights
(doctoral thesis, University
of South Africa 1979) at 88-9 for the distinction between minerals
and mineral rights, and the confusion
that sometimes surrounded
these two distinct concepts. Whereas the former concerned the actual
mineral deposits, such as coal,
the latter concerned the rights to
do certain things in relation to that coal. It is with the latter
that this matter is concerned.
13
Nolte
v Johannesburg Consolidated Investment Co. Ltd.
1943 AD 295
at
315 and
Van Vuren
above n 12. This was because our law does
not allow for the separate ownership of horizontal layers of land
(see
Anglo
above n 8 at para 16).
14
See
Dale above n 12 at 79-83.
15
Du
Bois (ed)
Wille’s
Principles of South African Law
(Juta & Co Ltd, Cape Town 2007) at 428.
16
The
provision for such registration was encapsulated in
sections 3(1)(m)
and
70
(1) of the
Deeds Registries Act 47 of 1937
, before their
repeal by
section 110
of the MPRDA.
17
Badenhorst
and Mostert “Revisiting the Transitional Arrangements of the
Mineral and Petroleum Resources Development Act 28 of 2002
and the
Constitutional Property Clause: An Analysis in Two Parts”
(2003) 3
Stellenbosch Law Review
377
at 384-5.
18
Badenhorst
above n 9 at 651 and Badenhorst and Mostert id at 384-5.
19
20
of 1967.
20
Section
1(ix)(a)(i) of the Minerals Act. See also the Mining Rights Act
which defined “holder” similarly.
21
Section
5(1) of the Minerals Act.
22
Id
section 5(2). This is not to say, however, that the grant of
statutory authorisation by a regional director or the Minister
was
the source of the mineral rights (see
Anglo
above n 8 at para
25 and Badenhorst and Mostert above n 17 at 391-2).
23
Item
8(1) of Schedule II to the MPRDA.
24
An
application fee for a prospecting right was R50 000 at the
time, according to the undisputed evidence of Agri SA’s
expert
in proceedings before the North Gauteng High Court, Pretoria.
25
R1,5
million was payable for a mining right application, according to the
undisputed evidence of Agri SA’s expert in proceedings
before
the North Gauteng High Court, Pretoria.
26
See
section 110 read with Schedule I to the MPRDA.
27
Agri
South Africa v Minister of Minerals and Energy
2012 (1) SA 171
(GNP) at para 57.
28
Section
25(1) of the Constitution provides:
“
No one may be deprived of
property except in terms of law of general application, and no law
may permit arbitrary deprivation
of property.”
29
Minister
of Minerals and Energy v Agri South Africa
2012 (5) SA 1
(SCA)
at para 69 (Supreme Court of Appeal judgment).
30
Id
at para 70.
31
Id
at para 81.
32
Id
at para 113. Nugent JA wrote the concurring judgment and Mhlantla JA
agreed.
33
Id
at para 70.
34
Id
at para 117.
35
Id
at para 88.
36
Id
at para 101.
37
[2009]
ZACC 14; 2009 (6) SA 232 (CC); 2009 (10) BCLR 1014 (CC).
38
Section
3(1) of the MPRDA.
39
Id
section 2(b).
40
Id
section 3(2)(a).
41
Id
section 5(1).
42
Id
sections 13-36.
43
Id
section 51(4).
44
Id
section 4(2).
45
The
Preamble of the MPRDA reads:
“
Recognising that minerals and
petroleum are non-renewable natural resources;
Acknowledging that South Africa’s mineral and
petroleum resources belong to the nation and that the State is the
custodian
thereof;
Affirming the State’s obligation to protect the
environment for the benefit of present and future generations, to
ensure
ecologically sustainable development of mineral and petroleum
resources and to promote economic and social development;
Recognising the need to promote local and rural
development and the social upliftment of communities affected by
mining;
Reaffirming the State’s commitment to reform to
bring about equitable access to South Africa’s mineral and
petroleum
resources;
Being committed to eradicating all forms of
discriminatory practices in the mineral and petroleum industries;
Considering the State’s obligation under the
Constitution to take legislative and other measures to redress the
results
of past racial discrimination;
Reaffirming the State’s commitment to
guaranteeing security of tenure in respect of prospecting and mining
operations; and
Emphasising the need to create an internationally
competitive and efficient administrative and regulatory regime”.
46
Id.
47
Id
item 2 of Schedule II. Applications for a prospecting permit or
mining authorisation which had already been submitted when
the MPRDA
came into effect were to be processed in the same way as under the
Minerals Act. Where information was incomplete,
applicants were
afforded the opportunity to comply pending the determination of the
application which could be favourable or
unfavourable as was the
case during the Minerals Act regime.
48
Schedule
II to the MPRDA defines an “old order mining right” as
“any mining lease, consent to mine, permission
to mine, claim
licence, mining authorisation or right listed in Table 2 [of
Schedule II] in force immediately before the
date on which [the
MPRDA] took effect and in respect of which mining operations are
being conducted”.
49
Id.
“Old order prospecting right” means “any
prospecting lease, permission, consent, permit or licence, and
the
rights attached thereto, listed in Table 1 [of Schedule II] in
force immediately before the date on which [the MPRDA]
took effect
and in respect of which prospecting is being conducted”.
50
Id.
“Unused old order right” means “any right,
entitlement, permit or licence listed in Table 3 [of Schedule II]

in respect of which no prospecting or mining was being conducted
immediately before [the MPRDA] took effect”.
51
Id
item 6(1).
52
Id
item 6(2).
53
Item
6(5) of Schedule II to the MPRDA provides that “[t]he holder
must lodge the right converted under subitem (3) within
90 days from
the date on which he or she received notice of conversion at the
Mining Titles Office for registration and simultaneously
at the
Deeds Office or at the Mining Titles Office for deregistration of
the old order prospecting right, as the case may be.”
54
Item
7(1) of Schedule II to the MPRDA provides that “[s]ubject to
subitems (2) and (8), any old order mining right in force

immediately before [the MPRDA] took effect continues in force for a
period 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 or was deemed to have been granted
or issued.”
55
Id
item 7(3).
56
Supreme
Court of Appeal judgment above n 29 at para 117.
57
Id
at para 99.
58
Id
at para 84.
59
Id
at para 99.
60
Id
at para 28.
61
Id
at para 69.
62
Van
Niekerk & Union Government (Minister of Lands) v Carter
1917
AD 359
(
Van Niekerk
) at 392.
63
Id.
64
Webb
v Giddy
(1878) 3 App. Cas. 908 at 930-1.
65
This
was the position, except for a brief period from 1883 to 1885 when
the ownership of precious stones and precious metals was,
by
legislation, awarded in favour of the state. See Dale above n 12 at
175, 181-2 and 185.
66
Section
2(1) of the Mining Rights Act and see also the definition of “state
land”.
67
All
this accorded with the understanding of landownership in our law and
of land allocation to persons under quitrent tenure.
The
understanding was that the allocation of quitrent tenure conferred
full ownership of the land, whereas the reservation of
rights in
favour of the state only created real rights and not landownership.
See
The Colonial Government v Fryer and Huysamen
(1886) 4 SC
313
and
Van Niekerk
above n 62. I am not aware of any
residual substantive power of the state, apart from its legislative
authority under the system
of parliamentary supremacy, from which it
acquired proprietary rights in land or minerals. Actual exploitation
by the state has
been rare. See eg Dale above n 12, which refers to
one ill-fated attempt in 1907. As far as petroleum and gas are
concerned the
state has been more proactive.
68
See
Error: Reference source not found- above.
69
Section
5(1) of the Minerals Act.
70
Some
would prefer “holder” rather than “owner”
because of doctrinal difficulty in the ownership of rights,
but I
prefer “owner” here because it conveys that after
extraction of the minerals the holder of the “separated”

right actually becomes the owner of the extracted minerals. For a
full exposition of the development of the separation of ownership
of
minerals from ownership of the land, see Error: Reference source not
found- above.
71
“
Notionally”,
because the actual separation of the minerals would only take place
once the minerals had been removed from
below the earth.
72
Section
31(1) of the Mining Rights Act.
73
Section
24 of the Minerals Act.
74
[2002]
ZACC 5
;
2002 (4) SA 768
(CC);
2002 (7) BCLR 702
(CC) (
FNB
).
75
Id
at para 56.
76
See
above.
77
Except
by expropriation and payment of compensation. See above.
78
FNB
above n 74 at para 57.
79
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)
[2004] ZACC 9
;
2005 (1) SA 530
(CC);
2005 (2) BCLR 150
(CC) at para 32.
80
Reflect-All
1025 CC and Others v MEC for Public Transport, Roads and Works,
Gauteng Provincial Government and Another
[2009] ZACC 24
;
2009
(6) SA 391
(CC);
2010 (1) BCLR 61
(CC) (
Reflect-All
) at para
64 and
Harksen v Lane NO and Others
[1997] ZACC 12
;
1998 (1)
SA 300
(CC);
1997 (11) BCLR 1489
(CC) at paras 32-3.
81
See
FNB
above n 74 at paras 58-9.
82
Id.
83
Although
Sebenza’s coal rights were bought for just over R1 million,
they were estimated at about R2 million at the time
of litigation.
This points to appreciation of value.
84
Which
Mostert above n 8 at 136 describes as
ius utendi
.
85
Id.
The ability to dispose of the right is similarly described as
ius
disponendi
.
86
See
section 11 of the MPRDA.
87
These
are contained in Schedule II to the MPRDA.
88
Section
56(d) of the MPRDA provides:
“
Any right, permit, permission
or licence granted or issued in terms of this Act shall lapse,
whenever—
(d) save for cases referred to in section 11(3), the
holder is liquidated or sequestrated”.
89
Harksen
above n 80 at paras 32-3. In
Harksen
this Court interpreted
section 28 of the interim Constitution which is the equivalent of
section 25 of the Constitution.
90
Reflect-All
above n 80 at para 64.
91
FNB
above n 74 at paras 49-50. These remarks by Ackermann J are
therefore instructive:
“
The subsections which have
specifically to be interpreted in the present case must not be
construed in isolation, but in the context
of the other provisions
of section 25 and their historical context, and indeed in the
context of the Constitution as a whole.
Subsections (4) to (9) all,
in one way or another, underline the need for and aim at redressing
one of the most enduring legacies
of racial discrimination in the
past, namely the grossly unequal distribution of land in South
Africa. The details of these provisions
are not directly relevant to
the present case, but ought to be borne in mind whenever section 25
is being construed, because
they emphasise that under the 1996
Constitution the protection of property as an individual right is
not absolute but subject
to societal considerations.
The preamble to the Constitution indicates that one of
the purposes of its adoption was to establish a society based, not
only
on ‘democratic values’ and ‘fundamental human
rights’, but also on ‘social justice’. Moreover

the Bill of Rights places positive obligations on the State in
regard to various social and economic rights.
Van der Walt
(1997)
aptly explains the tensions that exist within section 25:
‘
[T]he meaning of section 25
has to be determined, in each specific case, within an
interpretative framework that takes due cognisance
of the inevitable
tensions which characterise the operation of the property clause.
This tension between individual rights and
social responsibilities
has to be the guiding principle in terms of which the section is
analysed, interpreted and applied in
every individual case.’
The purpose of section 25 has to be seen both as
protecting existing private property rights as well as serving the
public interest,
mainly in the sphere of land reform but not limited
thereto, and also as striking a proportionate balance between these
two functions.”
(Footnotes omitted.)
92
Id.
93
Holders,
who had prospecting permits and mining authorisations under the
Minerals Act, did not really have security of tenure.
A prospecting
permit was valid for a renewable period of 12 months or such longer
period as the regional director may have determined
(see
section 6(4)) whereas a mining authorisation was granted for a
period which was at the discretion of the Director:
Mining
Development, (see section 9(1)). The MPRDA created security of
tenure by increasing the prospecting period to a renewable
tenure of
not more than five years (see section 17(6)). It has also brought
about certainty by setting the duration of a mining
right at a
renewable period not exceeding thirty years (see section 23(6) –
previously, the period was not stipulated).
The right to prospect or
mine is more secure under the MPRDA, than it was under the Minerals
Act.
94
See
Wallis JA’s position in the Supreme Court of Appeal judgment
above n 29 at paras 23-4.
95
Id
at para 24.
96
Mkontwana
above n 79 at para 32.
97
See
the Preamble to the MPRDA above n 45. The MPRDA makes no provision
for the state to be a beneficiary of the new mineral and
petroleum
dispensation.
98
As
explained in of the main judgment.
99
28
of 2002.
100
See
above.
101
See
above.
102
See
Error: Reference source not found- above.
103
Compare
Mostert
Mineral Law Principles and Policies in Perspective
(Juta and Co. Ltd., Cape Town 2012) at 129:
“
Under the previous generation
of mineral law, access to the mining industry was controlled by
mineral right holders, whilst activity
within the industry was
regulated by the state. The MPRDA replaces ‘mineral rights’
with a system of state-granted
rights to prospect and/or mine.”
(Footnotes omitted.)
104
Id
at 131-5. See also Van der Walt
Constitutional Property Law
3
ed (Juta and Co. Ltd., Cape Town 2011) at 410 et seq.
105
Mostert
above n 103 at 11-3.
106
Section
3 of the MPRDA provides that:
“
(1) Mineral and petroleum
resources are the common heritage of all the people of South Africa
and the State is the custodian thereof
for the benefit of all South
Africans.
(2) As the custodian of the nation’s mineral and
petroleum resources, the State, acting through the Minister, may—
(a) grant, issue, refuse, control, administer and
manage any reconnaissance permission, prospecting right, permission
to remove,
mining right, mining permit, retention permit, technical
co-operation permit, reconnaissance permit, exploration right and
production
right; and
(b) in consultation with the Minister of Finance,
determine and levy, any fee or consideration payable in terms of any
relevant
Act of Parliament.
(3) The Minister must ensure the sustainable
development of South Africa’s mineral and petroleum resources
within a framework
of national environmental policy, norms and
standards while promoting economic and social development.”
There
are also other differences between the nature, content and duration
of transitional and eventual substantive rights under
the MPRDA, and
pre-existing mineral ownership rights, but it is not necessary to
deal with these as well.
107
The
discovery of diamonds in 1867 not only resulted in the dispossession
of the Griqua people of their land, but also in the replacement
of
the initial and relatively egalitarian model of ‘digger
democracy’ with one of capital accumulation and
industrialisation
in the hands of a privileged few. That set in
train events which to some served as the leading example of
imperialism and monopoly
capitalism. See Innes
Anglo American and
the Rise of Modern South Africa
(Raven Press, Johannesburg 1984)
for a critical account of this development. For a more benign
account, see Gregory
Ernest Oppenheimer and the Economic
Development of Southern Africa
(Oxford University Press, Cape
Town 1962) and Lipton
Capitalism and Apartheid: South Africa,
1910-1986
(Wildwood House, London 1986). For a more general
discussion on the contestation about the past in historical writing,
see Lipton
Liberals, Marxists, and Nationalists: Competing
Interpretations of South African History
(Palgrave Macmillan,
New York 2007) and De Vos “South Africa’s Constitutional
Court: Starry-Eyed in the Face of History?”
(2002) 26
Vermont
Law Review
837
for a critical discussion of this Court’s
use of contested versions of history.
108
Ex
parte Chairperson of the Constitutional Assembly: In re
Certification of the Constitution of the Republic of South Africa,

1996
[1996] ZACC 26
;
1996 (4) SA 744
(CC);
1996 (10) BCLR 1253
(CC) (
First Certification case
) at para 5.
109
Id
at para 9-10. See also
African National Congress and Another v
Minister of Local Government and Housing, Kwazulu-Natal, and Others
[1998] ZACC 2
;
1998 (3) SA 1
(CC);
1998 (4) BCLR 399
(CC) at
para 18 and
S v Mhlungu and Others
[1995] ZACC 4
;
1995 (3) SA
867
(CC);
1995 (7) BCLR 793
(CC) at para 108.
110
Ex
parte Chairperson of the Constitutional Assembly: In re
Certification of the Amended Text of the Constitution of the
Republic
of South Africa, 1996
[1996] ZACC 24
;
1997 (2) SA 97
(CC);
1997 (1) BCLR 1
(CC) (
Second Certification case
).
111
Section
25 of the Constitution provides as follows:
“
(1) No one may be deprived of
property except in terms of law of general application, and no law
may permit arbitrary deprivation
of property.
(2) Property may be expropriated only in terms of law
of general application—
(a) for a public purpose or in the public interest; and
(b) subject to compensation, the amount of which and
the time and manner of payment of which have either been agreed to
by those
affected or decided or approved by a court.
(3) The amount of the compensation and the time and
manner of payment must be just and equitable, reflecting an
equitable balance
between the public interest and the interests of
those affected, having regard to all relevant circumstances,
including—
(a) the current use of the property;
(b) the history of the acquisition and use of the
property;
(c) the market value of the property;
(d) the extent of direct state investment and subsidy
in the acquisition and beneficial capital improvement of the
property; and
(e) the purpose of the expropriation.
(4) For the purposes of this section—
(a) the public interest includes the nation’s
commitment to land reform, and to reforms to bring about equitable
access
to all South Africa’s natural resources; and
(b) property is not limited to land.
(5) The state must take reasonable legislative and
other measures, within its available resources, to foster conditions
which
enable citizens to gain access to land on an equitable basis.
(6) A person or community whose tenure of land is
legally insecure as a result of past racially discriminatory laws or
practices
is entitled, to the extent provided by an Act of
Parliament, either to tenure which is legally secure or to
comparable redress.
(7) A person or community dispossessed of property
after 19 June 1913 as a result of past racially discriminatory laws
or practices
is entitled, to the extent provided by an Act of
Parliament, either to restitution of that property or to equitable
redress.
(8) No provision of this section may impede the state
from taking legislative and other measures to achieve land, water
and related
reform, in order to redress the results of past racial
discrimination, provided that any departure from the provisions of
this
section is in accordance with the provisions of section 36(1).
(9) Parliament must enact the legislation referred to
in subsection (6).”
112
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);
2002 (7) BCLR 702
(CC) (
FNB
).
113
Id
at para 50.
114
3
of 2000.
115
2
of 2000.
116
66
of 1995.
117
Section
39(2) of the Constitution reads as follows:
“
When interpreting any
legislation, and when developing the common law or customary law,
every court, tribunal or forum must promote
the spirit, purport and
objects of the Bill of Rights.”
118
Compare
Wary Holdings (Pty) Ltd v Stalwo (Pty) Ltd and Another
[2008]
ZACC 12
;
2009 (1) SA 337
(CC);
2008 (11) BCLR 1123
(CC).
119
Item
12 of Schedule II to the MPRDA.
120
Section
25(3) in relevant part reads as follows:
“
The amount of the
compensation and the time and manner of payment must be just and
equitable, reflecting an equitable balance
between the public
interest and the interests of those affected”.
121
I
borrow the “institutional change” terminology from Van
der Walt above n 104 at 410.
122
FNB
above n 112.
123
Id
at paras 57-61.
124
Harksen
v Lane NO and Others
[1997] ZACC 12; 1998 (1) SA 300 (CC); 1997
(11) BCLR 1489 (CC).
125
For
examples see Mostert above n 103 at 152-3 and Van der Walt above n
104 at 414-6.
126
(2006)
42 E.H.R.R 49.
127
Convention
for the Protection of Human Rights and Fundamental Freedoms
(European Convention on Human Rights), available at:
http://conventions.coe.int/Treaty/en/Treaties/Html/009.htm
,
accessed on 20 March 2013. Protocol 1 to the European Convention on
Human Rights was adopted on 20 March 1952. Article 1 of
Protocol 1
to the European Convention on Human Rights reads as follows:
“
Every natural or legal person
is entitled to the peaceful enjoyment of his possessions. No one
shall be deprived of his possessions
except in the public interest
and subject to the conditions provided for by law and by the general
principles of international
law.
The preceding provisions shall not, however, in any way
impair the right of a State to enforce such laws as it deems
necessary
to control the use of property in accordance with the
general interest or to secure the payment of taxes or other
contributions
or penalties.”
128
Jahn
above n 126 at para 111.
129
Id
at para 116-7.
130
Above
n 112 at para 98.
131
The
provisions of item 12 of Schedule II to the MPRDA appear to make
provision for expropriation without compensation in section 12(3)

which reads:
“
Before facilitating the
assistance contemplated in subsection (1), the Minister must take
into account all relevant factors, including—
(a) the need to promote equitable access to the
nation’s mineral resources;
(b) the financial position of the applicant;
(c) the need to transform the ownership structure of
the minerals and mining industry; and
(d) the extent to which the proposed prospecting or
mining project meets the objects referred to in section 2 (c), (d),
(e), (f)
and (i).”
132
See
above.
133
Above
n 124 at para 82.
134
24
of 1936.
135
Reflect-All
1025 CC and Others v MEC for Public Transport, Roads and Works,
Gauteng Provincial Government and Another
[2009] ZACC 24
;
2009
(6) SA 391
(CC);
2010 (1) BCLR 61
(CC) (
Reflect-All
).
136
Id
at para 76.
137
Custodianship
is a new concept in our law and has generated much discussion: see
the discussion and references to the literature
in Mostert above n
103 at 133-5.
138
FNB
above n 112.
139
See
the thorough and illuminating discussion in
Minister of Minerals
and Energy v Agri South Africa
2012 (5) SA 1
(SCA) at paras
21-3. See also International Investment Law cases involving
expropriation.
Starrett Housing Corporation, Starrett Systems,
Inc, Starrett Housing International, Inc v The Government of the
Islamic Republic
of Iran, Bank Markazi Iran, Bank Omran, Bank Mellat
(1983) 4 Iran-U.S.C.T.R. 122 at 154:
“
[I]t is recognized in
international law that measures taken by a state can interfere with
property rights to such an extent that
these rights are rendered so
useless that they must be deemed to have been expropriated, even
though the state does not purport
to have expropriated them and the
legal title to the property formally remains with the original
owner.”
See
also
Compañia del Desarrollo de Santa Elena, S.A. v
Republic of Costa Rica
(2000) (ICSID Case No. ARB/96/1) at para
77:
“
[P]roperty has been
expropriated when the effect of the measures taken by the state has
been to deprive the owner of title, possession
or access to the
benefit and economic use of his property.”
140
See
Error: Reference source not found- above.
141
It
seems to exclude even the kind of case mentioned by Mostert above n
103 at 106.
142
50
of 1991.
143
Section
42 of the Minerals Act.
144
See
above.