PAYING THE PIPER (IN ABSENTIA) SFF Association v Xstrata 2011 JDR 0407 (GSJ)

This decision focused on the impact of the Mineral and Petroleum Resources Development Act (28 of 2002, hereinafter “MPRDA”) on an old-order mining right (based upon a mineral lease) which had been converted into a mining right in terms of the transitional arrangements of Schedule II of the MPRDA. In particular, the court held that consideration in the form of a (contractual) royalty, as provided for in the mineral lease, remains payable upon conversion of an old-order mining right by its former holder (miner) to the grantor of the common-law mining right. The outcome of the decision, namely, continued liability for contractual royalties, has far-reaching consequences for such former holders of old-order mining rights. Continued liability would result in double payment of royalties by miners. This is because under the new dispensation, statutory royalties can be imposed by the state (s 3(1)(b) of the MPRDA) and were imposed and became payable upon commencement of the Mineral and Petroleum Resources Royalty Act (28 of 2008) on 1 March 2010. From the said date, in terms of this decision, double royalties would be payable by miners. If correct, it can be taken one step further. Owing to continued receipt of contractual royalties, former holders of common-law mineral rights would not have suffered an expropriation of property by virtue of the provisions of the MPRDA for purposes of item 12(1) of Schedule II of theMPRDA. Such expropriation would have taken place if the contractual duties to pay royalties had indeed been terminated upon cessation of old-order mining rights (as to such a possible claim, see further, Badenhorst and Mostert Mineral and Petroleum Law of South Africa 2004 (Revision service 7) 25–53). These consequences will be explained in more detail in this discussion as well as the correctness or not of the decision. I have written about the acquisition, nature, content, transfer and loss of old order rights before (see Badenhorst “The Make-up of Transitional Rights to Minerals: Something Old, Something New, Something Borrowed, SomethingBlue …? 2011 4 SALJ 763–784) to which the reader is referred. This decision sheds new light on this topic.

PAYING THE PIPER (IN PRAESENTIA) Xstrata South Africa (Pty) v SFF Association 2012 (5) SA 60 (SCA)

This decision is an appeal from the decision of the South Gauteng High Court in SFF Association v Xstrata (2011 JDR 0407 (GSJ)). The court a quo decided incorrectly that the holder of an old-order mining right, which was converted into a (new) mining right in terms of the Mineral and Petroleum Resources Development Act 28 of 2002 (the “Act”), remains liable upon conversion for the payment of (contractual) royalties in terms of a mineral lease, which was concluded prior to enactment of the Act. The appeal was upheld by the Supreme Court of Appeal (“SCA”) (2012 (5) SA 60 (SCA) par 27). The decision was rendered by Wallis JA with the other judges concurring with his judgment. Prior to the Act mineral-right holders could grant a mining right to a miner against payment of royalties or other forms of consideration. At issue on appeal was whether the obligation to pay royalties in terms of a mineral lease “survives the introduction of the new regime in respect of mining rights brought about by the Act”. As indicated by the SCA, the Act fundamentally changed the legal basis upon which rights to minerals are acquired and exercised. Previously mineral rights were vested in the owner of land or the holder of mineral rights, which rights could be exercised upon acquisition of a statutory authorization to exploit the minerals. In terms of the new regime, common-law mineral rights were destroyed and “all mineral resources vested in the state as the custodian of such resources on behalf of all South Africans”, whereupon the state could confer the right to exploit such resources to applicants. Upon granting a mining right in terms of the Act (statutory) royalties have become payable to the state since 1 March 2010 of the Act and the Mineral and Petroleum Resources Royalty Act 28 of 2008. In order to prevent disruption of the mining industry, provision was made in the Act for the continuation of old-order rights for different transitional periods ranging from one to five years and conversion of such rights during the periods of transition. The transitional arrangements in Schedule II of the Act (“transitional arrangements”) inter alia ensured security of tenure of prospecting rights and mining rights and enabled holders thereof to comply with the Act. In particular, an old-order mining right remained valid for five years “subject to the terms and conditions under which it was granted” (item 7(1) of the transitional arrangements) and could be converted into a new mining right (item 7(2) of the transitional arrangements) if certain requirements were met. The applicant had to have: (a) met the requirements for lodgement of application for conversion; (b) conducted mining operations in respect of the mining right; (c) indicated that he would continue to conduct such mining operations upon conversion of the mining right; (d) had an approved environmental management programme; and (e) paid the prescribed conversion fee (item 7(3) of the transitional arrangements). To recap, the Xstrata decision dealt with an old-order mining right that had been converted into a (new) mining right and the effect of these statutory changes on rights to royalties which accrued to a former holder of mineral rights by virtue of a mineral lease.

Baleni v Minister of Mineral Resources 2019 2 SA 453 (GP): Paving the Way for Formal Protection of Informal Land Rights

In Baleni v Minister of Mineral Resources 2019 2 SA 453 (GP) the court, duly following the judicial guidance provided in Maledu v Itereleng Bakgatla Mineral Resources 2019 2 SA 1 (CC), made an important pronouncement on the rights of people who hold informal land tenure. The question in the Baleni judgment concerned the level of consent required to obtain a mining right over property held by a community with informal or customary land tenure. The court specifically considered provisions of the Interim Protection of Informal Land Rights Act 31 of 1996 (IPILRA) and the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA), and concluded that the provisions of these Acts should be read together when determining the level of consent required. The court found that a community's consent, as required by IPILRA, and not merely consultation with a community, as required by the MPRDA, is necessary before a mining right can be obtained over a community's property. The Baleni and the Maledu judgments set an important judicial precedent protecting informal land owners against the potentially harmful effects of mining activities, and establish a higher standard for obtaining a mining right over such property. However, despite the success of the judgment, many questions remain regarding the longevity of IPILRA, in particular, and a long-term solution to informal land tenure and land security in general. This case note argues that final legislation should be enacted to provide protection for people who hold informal land rights, and consequently to formalise indigenous communities' land rights to ensure that these judgments act as the precursor for fundamental change in the current debate regarding informal land rights.

The Right to be Granted Access over the Property of Others in Order to Enter Prospecting or Mining Areas: Revisiting Joubert v Maranda Mining Company (PTY) LTD [2009] 4 ALL SA 127 (SCA)

A new mineral law regime was introduced when the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) commenced. Common law mineral rights were abolished and replaced by statutorily created rights to minerals. Prospecting rights and mining rights granted in terms of the MPRDA entitle their holders, amongst other things, to enter the designated prospecting or mining area in order to commence with and conduct prospecting or mining activities. This contribution focusses on the question whether the entitlement to "enter" the land to which a specific prospecting or mining right relates automatically includes the ancillary right to be granted access over the property of others in order to enter the designated prospecting or mining area. It is important to determine the source or origin of the right to access in the new regime and to differentiate between "access" and "entry". It would not be just or justifiable summarily to accept that legal principles that developed under a completely different regime apply unchanged in a new regime.

The Liability of Historical Mine Authorisation Holders for Rehabilitation of ‘Old Order Mine Dumps’

Mine dumps or tailings (i.e. ‘mine waste’) created by mining activities are some of the main environmental impacts of mining. Historically little or no regard was given to the environment while planning mine dumps, since planning was based on minimum cost, the availability of land and the safety of underground workings.Mine dumps continue to cause water and air pollution when abandoned without being rehabilitated. Abandoned mines and their dumps are common features of the South African landscape. Section 46 of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) provides that the state is responsible to rehabilitate abandoned mines if the owner is deceased, cannot be traced, ceased to exist or has been liquidated. Rehabilitation of these mines has extensive financial consequences for the state and indirectly to the taxpayer.The aim of this article is to determine the responsibility of historical mining right holders for such rehabilitation. ‘Historic polluters’ refer to mining companies who caused pollution and environmental degradation due to mining activities before the Minerals Act came into force in 1991. Also to be addressed in this article is the question whether owners of tailings created through an authorisation issued in terms of the now repealed Minerals Act or prior legislation (old order dumps) would be able to escape their rehabilitation obligations or not. Reference will be made to the new proposed amendments to the MPRDA as well in addressing the question.

Competing Preferent Community Prospecting Rights: A Nonchalant Custodian?

Traditional communities that were precluded from the benefits and financial rewards of exploitation of the mineral resources of South Africa are afforded the opportunity to lodge an application with the Department of Mineral Resources (hereafter the department) to obtain a so-called preferent prospecting right (or mining right) in respect of land which is registered - or to be registered - in their name. An applicant on behalf of the community has to meet the requirements of section 104(2) of the Mineral and Petroleum Resources Development Act 28 of 2002 (hereafter the MPRDA). This in line with one of the objectives of the MPRDA of expanding the opportunities for historically disadvantaged persons, such as traditional communities, to enter into, and actively participate in, the mineral industry and to benefit from the exploitation of the nation's mineral resources (s 2(d)). The Minister of Mineral Resources ((hereafter the minister), in his/her capacity as the custodian of the mineral resources of South Africa on behalf of the people of South Africa (s 3(1)), is, amongst others, by implication tasked with achieving, these objectives. The same applies to the department and its officials. However, this was unfortunately not the experience of a traditional community, the Bengwenyama-Ya-Maswazi community (hereafter the BYM community), who had to battle through two rounds of litigation with the minister, the department and persons and entities which promoted their own interests whilst attempting to convey the (false) impression that they were representing the community.The subject of this discussion is the second round of litigation between the Bengwenyama-Ya-Maswazi Tribal Council and Genorah. The second round of litigation involved competing applications for preferent community prospecting rights in two related appeals heard together by the Supreme Court of Appeal (hereafter the SCA). The first appeal concerned preferent community prospecting rights on the farm Nooitverwacht (hereafter the Nooitverwacht appeal) and the second appeal involved preferent community prospecting rights on the farm Eerstegeluk (hereafter the Eerstegeluk appeal). The focus of the discussion is on the Nooitverwacht appeal, and references (where appropriate) will be made to the Eerstegeluk appeal. A number of related issues are also discussed – these include the distinction between prospecting rights and preferent community prospecting rights; the meaning of "... land which is registered or to be registered in the name of the community concerned" (with reference to restitution land, redistribution land, and community land acquired from own resources); and the changing legal landscape relating to community decision-making and consultation.