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

• Jurisdiction: South Africa
• Citation: 2019 (3) SA 621 (CC)

Aquila Steel (South Africa) (Pty) Ltd v Minister of Mineral Resources and Others
2019 (3) SA 621 (CC)

2019 (3) SA p621

Citation	2019 (3) SA 621 (CC)
Case No	CCT 08/18; [2018] ZACC 5
Court	Constitutional Court
Judge	Basson AJ, Cameron J, Dlodlo AJ, Froneman J, Goliath AJ, Khampepe J, Mhlantla J, Petse AJ and Theron J
Heard	February 15, 2019
Judgment	February 15, 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.

Flynote : Sleutelwoorde

Minerals and petroleum — Mining and prospecting rights — Applications — Acceptance — Applications not complying with requirements must be returned — Award of prospecting rights based on defective application C unlawful — Mineral and Petroleum Resources Development Act 28 of 2002, s 16(3).

Minerals and petroleum — Mining and prospecting rights — Transition to new order under MPRDA — Duration of old-order rights-holder's preferent right to apply for prospecting and mining rights — Such right lasting only for D limited period it was granted for — Other applicants may apply after such period but their applications may not be processed before old-order rights-holders' — Mineral and Petroleum Resources Development Act 28 of 2002, sch II, item 8.

Headnote : Kopnota

Applicable statutory provisions E

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Item 8(2) to sch II of the Mineral and Petroleum Resources Development Act 28 of 2002 (the MPRDA) confers an exclusive right, on holders of any unused old-order rights, to apply for a prospecting right or a mining right within the one-year period that such old-order mineral rights remained in force after the MPRDA took effect, ie until 30 April 2005;

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item 8(3) specifies that the unused old-order right 'remains valid' until F the conversion application is disposed of;

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s 9 determines the order in which applications for prospecting rights are to be processed;

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s 16(3) provides that if an application for a prospecting right does not comply with the requirements of s 16, the regional manager of the Department of Mineral Resources (the DMR) 'must return the application to the applicant'; and G

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s 22(2)(b) provides that the regional manager 'must' accept an application for a mining right if 'no other person holds a prospecting right, mining right, mining permit or retention permit for the same mineral and land'.

Facts H

In order to preserve its old-order mineral rights, the sixth respondent, ZiZa Ltd (ZiZa), lodged a number of applications under item 8(2) on 19 April 2005. On 26 February 2008 it was granted prospecting rights over land which, it later transpired, included land in respect of which the DMR had also granted a prospecting right to Aquila Steel (SA) (Pty) Ltd (Aquila), the appellant. Aquila's application for prospecting rights was submitted on 18 April 2006 I — ie outside the one-year period of exclusivity afforded to ZiZa under item 8(2) — and it was granted in October 2006, before ZiZa's application had been processed.

Aquila subsequently discovered substantial manganese deposits, and its application for mining rights was accepted by the DMR on 22 December 2010. In January 2011 the DMR advised Aquila of the double grant, and that J

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ZiZa's A prospecting right had since been transferred to the Pan African Mineral Development Company (Pty) (PAMDC), a joint venture company established with the purpose of eventually holding ZiZa's mineral rights. Further information from the DMR about the double grant was not forthcoming but Aquila eventually obtained information by way of requests in terms of the Promotion of Access to Information Act 2 of 2000. Based B on this information, Aquila launched an internal appeal (on 29 October 2013) to the Minister of Mineral Resources (the Minister) against the grant of the prospecting right to PAMDC. Its complaint was that the decision by the relevant regional manager of the DMR to accept ZiZa application was irregular because ZiZa's application did not comply with the MPRDA and its regulations, inter alia, in that it did not sufficiently describe the area over C which it sought prospecting rights. Aquila also challenged the Minister's decision to grant ZiZa's application as flawed and irregular, inter alia, because of the vague description of the area that the right covered. (See [22] – [23].)

The Minister decided the appeal 20 months later, after Aquila obtained a mandamus directing him to do so, and then rejected it on the basis that D Aquila's own prospecting right application had been unlawfully accepted, processed and granted. This, the Minister said, was because Aquila's application was lodged and processed during the period that afforded exclusivity to ZiZa. The Minister also allowed PAMDC's cross-appeal against the DMR's acceptance of Aquila's application for prospecting rights and the granting thereof, and dismissed Aquila's mining rights application. Aquila E next brought a High Court application for the review of the Minister's decision, requesting related declaratory relief, including that the court substitute the Minister's decision with its own decision upholding the internal appeal and granting the mining right application. The High Court ruled in Aquila's favour (see [26] – [29]) but its decision was reversed on appeal by the Supreme Court of Appeal (see [30] – [34]).

Issues F

In this case, Aquila's further appeal, the Constitutional Court stated the issues as — (a) whether the grant of a prospecting right to ZiZa on 26 February 2008 was valid; (b) whether Aquila was entitled to apply for a prospecting right when it did so on 18 April 2006; (c) whether the Minister should have upheld Aquila's appeal against the refusal to grant it a right to mine; and G (d) whether the doctrine in Kirland/Oudekraal impeded relief for Aquila, and if not, to what remedy Aquila would be entitled.

Issue (a) was based on the court's approach that, if the grant of the prospecting right to ZiZa was invalid and set aside, s 22(2)(b) would no longer present a bar to Aquila being awarded a mining right. This regardless of whether Aquila's prospecting right was valid, because the MPRDA did not require an H aspirant mining right-holder to hold a valid prospecting right (see [40]).

Issue (b) related to the duration of the exclusivity to queue for rights under the MPRDA that item 8(1) conferred. The High Court considered that it expired after one year; the SCA that it lasted until a prospecting right application by an unused old-order rights-holder had been granted or refused (in terms of item 8(3)) — regardless of how long that might take — and that, until then, I no other application for a prospecting right may be lodged, considered, accepted or granted (see [63] – [66]).

Issue (d) addressed whether the decision awarding the prospecting right to ZiZa could be ignored as invalid, or whether it remained valid and binding until set aside on review. ZiZa relied on the Kirland/Oudekraal doctrine (see [94]) to argue that it was the latter, with the effect that, so long as ZiZa's J prospecting right was in existence, s 22(2)(b) precluded the granting of a

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mining right to Aquila (see [92] – [93]). The second leg of this issue — A Aquila's remedy if the Kirland/Oudekraal doctrine did not apply — involved the question whether there were grounds for the SCA to have interfered with the High Court's discretion (under s 8(c)(ii) of the Promotion of Administrative Justice Act 3 of 2000 (PAJA)) to substitute the Minister's decision with its own (see [108]).

Held as to (a): The foundation of the Minister's reasoning — that if Aquila's B prospecting right was unlawfully accepted and granted then ZiZa's prospecting right was lawfully granted — was flawed. Just because Aquila's own prospecting right application had been unlawfully accepted, processed and granted, did not mean that the Minister lawfully granted ZiZa a prospecting right (see [39] – [40]). Whether ZiZa's prospecting right was lawfully granted depended on whether the Minister and ZiZa complied with the C requirements of the MPRDA. ZiZa's application was grossly defective when it was accepted, and should instead have been returned in terms of s 16(3) of the MPRDA (see [41] – [49] and [50] – [51]). This meant that it was also defective when the Minister considered it in terms of s 17(1) of the MPRDA. Therefore, the Minister's grant to ZiZa of a prospecting right was unlawful and should be set aside; and this meant that there were no other prospecting D rights-holder blocking Aquila's mining right. (See [53]).

Held as to (b): The exclusivity in item 8(1) was expressly stated to last for one year, and one year only. At the end of the grace year, the continued validity of the old-order right, pending conversion, did not bar others from standing in line to apply for MPRDA rights over the same land. The ordering that E s 9 ordained took effect after the one-year grace period; it barred other applications from being processed only until those of the old-order rights- holder had been processed. Once the grace period ended, the MPRDA's requirements applied equally to all applications, no matter where they were in the queue. Item 8 did not purport to deal with the right to apply for a prospecting right at all. The application item 8 envisaged was for a F new-order MPRDA right.

So, when ZiZa lodged its application for a prospecting right on 19 April 2005, it was exercising its right to apply, within the grace year, for a prospecting right in terms of s 16. That excluded other applicants until the grace year expired. Others could join the queue after 30 April 2005. Their applications G were valid. But they did so behind ZiZa. ZiZa's...