Aquila Steel (South Africa) (Pty) Ltd v Minister of Mineral Resources and Others

• Jurisdiction: South Africa
• Judge: Basson AJ, Cameron J, Dlodlo AJ, Froneman J, Goliath AJ, Khampepe J, Mhlantla J, Petse AJ and Theron J
• Judgment Date: 15 February 2019
• Citation: 2019 (3) SA 621 (CC)
• Docket Number: CCT 08/18 [2018] ZACC 5
• Hearing Date: 15 February 2019
• Counsel: A Cockrell SC (with D Smit) for the applicants. V Maleka SC (with L Gumbi) for the first to fourth respondents. C Loxton SC (with I Goodman) for the fifth and sixth respondents.
• Court: Constitutional Court

Cameron J A (Basson AJ, Dlodlo AJ, Froneman J, Goliath AJ, Khampepe J, Mhlantla J and Petse AJ concurring):

[1] This is an application for leave to appeal against a judgment of the Supreme Court of Appeal, [1] overturning a majority judgment of the High Court of South Africa, Gauteng Division, Pretoria (High Court). [2] The B applicant, Aquila Steel (SA) (Pty) Ltd (Aquila), is a locally incorporated subsidiary of an Australian resources company. Aquila was the applicant before the High Court and the first respondent in the Supreme Court of Appeal. The first to fourth respondents in this court are the Minister of Mineral Resources and three officials of the Department of Mineral Resources (Department) responsible for implementing the Mineral and C Petroleum Resources Development Act [3] (MPRDA). It is their decisions under the statute that Aquila targets in this litigation.

[2] Aquila's corporate antagonists, who resist its relief against the departmental decisions, are the Pan African Mineral Development Company Ltd D (PAMDC — fifth respondent), a private company owned by the governments of Zambia, Zimbabwe and South Africa; and ZiZa Ltd (ZiZa — sixth respondent), a company incorporated in the United Kingdom. ZiZa was originally incorporated in 1893, as the Bechuanaland Railway Company Ltd. Cecil John Rhodes was the prime minister of the Cape Colony. As part of his colonial design, he made land grants to the E company. More than a century later, ZiZa is now owned — as its name suggests — by the governments of Zimbabwe and Zambia. PAMDC was incorporated in South Africa on 26 November 2007 to take over the prospecting activities of ZiZa. (Since their interests match, I refer, except where necessary, to PAMDC and ZiZa together as ZiZa.)

Factual and statutory background F

[3] The dispute arises from what counsel for ZiZa rightly called 'delinquent' and 'unlawful' conduct on the part of the Department. The Department not only botched, but egregiously botched, coincident G prospecting and mining rights applications ZiZa and Aquila made to its Northern Cape office between April 2005 and December 2011. This led to overlapping and double grants in which this litigation has its genesis.

[4] It happened this way. The MPRDA came into force on 1 May 2004. Breaking from the past, the statute established state sovereignty [4] and H state custodianship [5] over all the Republic's mineral and petroleum

Cameron J (Basson AJ, Dlodlo AJ, Froneman J, Goliath AJ, Khampepe J, Mhlantla J and Petse AJ concurring)

resources' for the benefit of all South Africans' [6] and 'to promote A equitable access' for historically disadvantaged persons. [7] But the new statute protected those who held rights under the common law or under the now repealed Minerals Act. [8] They could retain their rights, however, only if they were actively being used. So holders of unused old-order rights were put in a squeeze. They were given a tight deadline. They had B just one year — until 30 April 2005 — in which to apply under the MPRDA for new-order prospecting or mining rights. No longer could a mineral rights-holder sterilise rights by sitting on them. The principle was: use it or lose it.

[5] The crucial transitional provisions are packaged up at the back of the C statute, in sch II. Their import is our concern here. Item 8 is headed 'Processing of unused old-order rights'. At the time that matters for us, [9] it provided:

'(1) Any unused old order right in force immediately before this Act took effect, continues in force subject to the terms and conditions under D which it was granted, acquired or issued or was deemed to have been granted or issued for a period not exceeding one year from the date on which this Act took effect.

(2) The holder of an unused old order right has the exclusive right to apply for a prospecting right or a mining right, as the case may be, in terms of this Act within the period referred to in subitem (1). E

(3) An unused old order right in respect of which an application has been lodged within the period referred to in subitem (1) remains valid until such time as the application for a prospecting right or mining right, as the case may be, is granted and dealt with in terms of this Act or is refused.

(4) Subject to subitems (2) and (3) an unused old order right ceases to exist upon the expiry of the period contemplated in subitem (1).' [10] F

[6] The effect was this. During the one-year grace period, holders of unused old-order rights enjoyed the same rights as before the MPRDA came into force. [11] In addition, they enjoyed exclusivity to apply for new-order title. They had the sole right to apply for prospecting or G

Cameron J (Basson AJ, Dlodlo AJ, Froneman J, Goliath AJ, Khampepe J, Mhlantla J and Petse AJ concurring)

mining A rights over the land over which they held unused old-order rights. [12] As will emerge, a lot turns on 'exclusivity' and 'sole'.

[7] Section 16 of the MPRDA regulates how applications for prospecting rights should be made. This includes holders of unused old-order rights. This is how it read when the statute was enacted, and at all times that B matter to the parties before us (it has since been amended): [13]

'(1) Any person who wishes to apply to the Minister for a prospecting right must lodge the application —

(a)

at the office of the Regional Manager in whose region the land is situated;

(b)

C in the prescribed manner; and

(c)

together with the prescribed non-refundable application fee.

(2) The Regional Manager must accept an application for a prospecting right if —

(a)

the requirements contemplated in subsection (1) are met; and

(b)

no other person holds a prospecting right, mining right, mining permit or retention D permit for the same mineral and land.

(3) If the application does not comply with the requirements of this section, the Regional Manager must notify the applicant in writing of that fact within 14 days of receipt of the application and return the application to the applicant.

(4) If the Regional Manager accepts the application, the Regional Manager must, within 14 days from the date of acceptance, notify the E applicant in writing —

(a)

to submit an environmental management plan; and

(b)

to notify in writing and consult with the land owner or lawful occupier and any other affected party and submit the result of the consultation within 30 days from the date of the notice.

(5) Upon receipt of the information referred to in subsection (4)(a) F and (b), the Regional Manager must forward the application to the Minister for consideration.

(6) The Minister may by notice in the Gazette invite applications for prospecting rights in respect of any land, and may specify in such notice the period within which any application may be lodged and the terms and conditions subject to which such rights may be granted.' [14]

[8] G Before the MPRDA came into force, ZiZa held large tracts of land in the Northern Cape. Its title included, at common law, old-order mineral rights over those lands. These stemmed from the railway grants Cecil John Rhodes made to ZiZa in the 19th century. In terms of item 8(1) of sch II, ZiZa had one year — until 30 April 2005 — to exercise its exclusive

Cameron J (Basson AJ, Dlodlo AJ, Froneman J, Goliath AJ, Khampepe J, Mhlantla J and Petse AJ concurring)

right to apply for a new-order prospecting right, thus converting its A unused old-order right into an MPRDA right.

[9] Shortly before this cutoff, on 24 March 2005, the Zimbabwean, Zambian and South African governments decided to establish PAMDC as a vehicle for all of ZiZa's mineral rights. The next day, ZiZa resolved to apply for its unused pre-MPRDA mineral rights to be converted under the B statute. Eleven days before the 30 April 2005 deadline, on 19 April 2005, it filed its application for a prospecting right under the MPRDA.

[10] ZiZa's application did not comply with s 16 nor with the regulations issued under the MPRDA. Its shortcomings were striking. [15] Among them was that the exact parameters of the land in which ZiZa's rights were C held were anything but clear. Despite this, the Department on 17 August 2005 accepted the application. More on this later.

[11] On 18 April 2006, almost a year after the one-year transitional grace period elapsed, Aquila submitted an independent application for a prospecting right over the very same Kuruman land (properties). [16] This D application, too, the Department accepted. One of the questions on which the courts below differed is whether Aquila could apply at all while ZiZa's conversion application was pending. The Department's regional manager in Kimberley recorded its acceptance of Aquila's application in a letter dated 2 May 2006. And on 11 October 2006 the Department awarded Aquila a prospecting right. This was notarised on 28 February 2007 and registered on 17 July 2007. [17] E

[12] The award of this prospecting right led Aquila to expend almost R157 million on prospecting operations. And its search was not in vain: Aquila found substantial manganese deposits, estimated at over 140 million tonnes, worth many billions of rands. A manganese reserve of F 20,2 million tonnes was identified on a portion which it now wants to mine. But it cannot. Not so long as it is stuck in the glue of departmental delinquency.

[13] Not long after PAMDC was formally incorporated in South Africa, on G 26 November 2007, the Department's Deputy Director-General on 26 February 2008 granted ZiZa a prospecting right that included the disputed land. This was nearly two years after the Department granted Aquila a prospecting right over the same land. In 2009 ZiZa belatedly started providing parts of the crucial information missing from its 2005 application for a prospecting right. This...