In a judgment handed down by the SCA on 18 November 2022, several key South African mining and mineral law principles were enforced. The SCA also emphasised points that a mining rights applicant should keep in mind.
Unfortunately, the Supreme Court of Appeal (SCA) did not pronounce on the issue of competing rights applications, which frequently gives rise to disputes in the South African mining industry.
Rustenburg Platinum Mines Limited (RPM) and the ARM Consortium Limited (ARM), as joint venture partners, applied to the Pretoria High Court to review and set aside seven decisions by the Department of Mineral Resources and Energy (DMRE). The review application was dismissed by the Pretoria High Court. RPM and ARM appealed to the SCA, which also dismissed the appeal.
The important principles arising from this matter are:
- An applicant in a review application ought to ensure not only that it institutes that application timeously, but also diligently prosecutes and pursues it. Applicants should be proactive and 'keep the matter running' to avoid any unnecessary delays. In this matter, when the review application came before the Pretoria High Court, the impugned prospecting rights had already expired, so the SCA determined that it was not necessary to determine the lawfulness of granting these rights. Often these applications are lengthy and protracted, and applicants should ensure that they do not delay in pursuing these applications.
- The requirements for granting a mining right are set out in section 23 of the Mineral and Petroleum Resources Development Act (MPRDA). They do not require an applicant to have previously held a prospecting right. The right granted to a prospecting right holder in section 19(1)(b) of the MPRD is an important separate, distinct, and exclusive right, which allows the holder to elect whether or not to exercise it to apply for a mining right.
- Before 7 June 2013, section 22(2)(c) of the MPRD did not exist. Section 22(2)(b) of the MPRDA stated that no application for a mining right could be accepted if some other person 'held' a prospecting right, mining right, mining permit or retention permit for the same mineral and land. At the time that the competing rights in this matter were granted, RPM had only applied for a prospecting right and there was no evidence of a holder of any such right or permit. The introduction of section 22(2)(c) of the MPRD provided that no application for a mining right can be accepted if some other person has made an application for a prospecting right, mining right, mining permit or retention permit where an application has been accepted for the same mineral and land but has not yet been granted or refused. It is thus unlikely that this issue will arise in the future, as sections 16(2)(c) and 22(2)(c) of the MPRDA remedy this procedural matter when there is a 'pending conflicting application'.
- The SCA dealt at length with the interpretation of legislation and these principles. The important takeaway is that the objects of a statute are of paramount importance and must be taken into account when, for example, determining applications submitted under the relevant legislation. In this matter, the SCA emphasised the transformation objects of the MPRDA, and essentially agreed that the DMRE was entitled to refuse RPM's application for the prospecting right to avoid (i) a concentration of minerals and (ii) giving effect to an exclusionary act. The SCA's approach appears to have protected the transformation objects of the MPRDA, and also made it clear that the DMRE possesses discretion when determining applications submitted in terms of the MPRDA. Although RPM might have held an 'exclusive' or 'preferential' right to apply for a prospecting right, this right to apply did not guarantee it would be granted when, for example, the transformation objectives of the MPRDA were not achieved or met.
It is important that any applicant under the MPRDA ensures that it is able to give effect to comply with, and largely meet the transformation objectives of the MPRDA.
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Read the original publication at Webber Wentzel.