Minister of Mineral Resources and Others v Mawetse (SA) Mining Corporation (Pty) Ltd

JurisdictionSouth Africa
JudgeNavsa ADP, Leach JA, Majiedt JA, Zondi JA and Meyer AJA
Judgment Date28 May 2015
Citation2016 (1) SA 306 (SCA)
Docket Number20069/14 [2015] ZASCA 82
Hearing Date07 May 2015
CourtSupreme Court of Appeal
CounselCDA Loxton SC (with MBL Makola) for the appellants. G Marcus SC (with N Ferreira) for the respondent.

Majiedt JA (Navsa ADP, Leach JA, Zondi JA and Meyer AJA concurring): A

Introduction

[1] The issues in this matter are whether a prospecting right had been lawfully granted to the fifth appellant, Dilokong Chrome Mine (Pty) Ltd B (Dilokong), and, if so, whether Dilokong may lawfully exercise that right. Allied to that is the question whether that right had lapsed due to its expiry or abandonment. These questions were decided against Dilokong and in favour of the respondent (qua applicant), Mawetse (SA) Mining Corporation (Pty) Ltd (Mawetse), in the Gauteng Division of C the High Court, Pretoria, by Masipa J. Dilokong appeals with the leave of the court a quo. The first to fourth appellants, the Minister of Mineral Resources and senior officials in that Department, to whom I shall collectively refer as 'the DMR', did not participate in this appeal, although they made common cause with Dilokong in the court below and to that end filed a comprehensive answering affidavit. D

The order in the Gauteng Division

[2] The case was brought by Mawetse in the Gauteng Division as a review application. Masipa J held that —

(a)

Dilokong had failed to comply with a suspensive condition attached E to the grant of the prospecting right and had accordingly 'disabled' itself from implementing that right; and

(b)

even if there had been a lawful award of a prospecting right to Dilokong, that right had been 'lost' due to the unreasonable delay in exercising it and, as a result, the right had lapsed, as it has expired. F

Masipa J consequently issued a declaratory order that Dilokong did not hold a valid prospecting right, as it had lapsed, and, following on that conclusion, that it no longer constituted a bar to the consideration of Mawetse's application for a prospecting right. She set aside the decision of the fourth appellant, the Regional Manager, Limpopo Region, G Department of Mineral Resources (the Regional Manager), rejecting Mawetse's application for a prospecting right, and remitted that application to the third appellant, the Deputy Director-General: Mineral Development, Department of Mineral Resources (the DDG), for reconsideration within 30 days. Lastly, Masipa J dismissed Dilokong's counter-application in which it sought to compel the DMR to notarially execute the prospecting right that had been awarded to it. H

Background

[3] On 24 November 2006 Dilokong applied, in terms of s 16 of the Mineral and Petroleum Resources Development Act 28 of 2002 I (the MPRDA), for a prospecting right for chrome ore (base metals) in respect of the farm Driekop 253 KT (Driekop). The application was lodged at the office of the Regional Manager who, in his letter of acceptance dated 6 December 2006, requested Dilokong to give effect to the objects of s 2(d) of the MPRDA by submitting, amongst others, a signed shareholder agreement to the Regional Manager's office by 4 February 2007. J

Majiedt JA (Navsa ADP, Leach JA, Zondi JA and Meyer AJA concurring)

A That request was made purportedly under the provisions of s 17(4) of the MPRDA, an aspect which will be discussed in due course.

[4] On 21 June 2007 the DDG granted a power of attorney, ostensibly under s 103 of the MPRDA, to the Regional Manager to sign the prospecting right contemplated in s 17(1) in favour of Dilokong in B respect of Driekop. On that same day the DDG signed an approval of a recommendation to grant a prospecting right to Dilokong for four years subject to Dilokong, where applicable, submitting, before notarial execution of the right, all other outstanding information or documentation, including a shareholder agreement with a black economic empowerment C (BEE) entity holding not less than 26% of the equity in the operation. [1] The DDG wrote to Dilokong on 18 July 2007 to confirm that it had been granted a prospecting right in respect of Driekop. The DDG purported to exercise the Minister's delegated powers in terms of ss 103(1) and (2) of the MPRDA in respect of the grant and refusal of D prospecting rights.

[5] On 14 November 2007, the date on which the prospecting right was to be notarially executed (as it is a limited real right in terms of s 5(1) of the MPRDA), Dilokong's representatives were informed that this could not take place, due to Dilokong's failure to give effect to s 2(d) of the MPRDA in relation to the required BEE shareholding. Section 2(d) reads as E follows:

'2 Objects of Act

The objects of this Act are to —

. . .

(d)

substantially and meaningfully expand opportunities for historically F disadvantaged persons, including women, to enter the mineral and petroleum industries and to benefit from the exploitation of the nation's mineral and petroleum resources; . . . .'

Dilokong's attempts to comply with this requirement proved futile. Dilokong is a wholly owned subsidiary of ASA Metals (Pty) Ltd (ASA Metals) G which is in turn owned by East Asia Metal Investment Company Ltd and the Limpopo Development Corporation (Limdev), a Limpopo provincial government enterprise. A national government moratorium on the disposal of all mining related state assets by all organs of state prohibited Limdev from disposing of its shares in ASA Metals to a BEE entity to meet the requirements imposed upon Dilokong. The environmental-management H plan submitted by Dilokong on 2 February 2007 in compliance with s 16(4)(a) was never approved due to Dilokong's failure to comply with the s 2(d) BEE-compliance requirement.

[6] In the meantime Mawetse, completely oblivious to the facts set out above, applied in September 2009 for a prospecting right for various I minerals (including chrome) in respect of various farms, including

Majiedt JA (Navsa ADP, Leach JA, Zondi JA and Meyer AJA concurring)

Driekop. Its application in respect of Driekop was rejected in terms of A s 16(2)(b) of the MPRDA because that prospecting right had already been granted to Dilokong. [2] Upon investigation Mawetse discovered the facts set out above, in particular that Dilokong's prospecting right had not been executed, that its duration was for three years (ie contrary to the DDG's approval which was for a period of four years, an aspect to which B I shall revert shortly), and that according to Mawetse's calculation it would have lapsed on 13 November 2010. Mawetse challenged the award of the prospecting right to Dilokong in the North Gauteng High Court, Pretoria, on 20 January 2012. That challenge was met with a preliminary point being taken by Dilokong, namely that the application was premature since Mawetse had not exhausted its internal remedy, ie C an internal appeal to the Minister in terms of s 96 of the MPRDA. Mawetse's internal appeal was lodged on 28 October 2010 while its challenge in the North Gauteng High Court was held in abeyance by agreement. The Minister refused to consider Mawetse's internal appeal because the matter was considered to be 'sub judice' due to Mawetse's D pending application in the High Court. In July 2011 Mawetse, faced with this impasse, approached the North Gauteng High Court again for an order to compel the Minister to decide the internal appeal, and obtained such an order. On 16 August 2011 the Minister upheld the award of the prospecting right to Dilokong and dismissed Mawetse's E appeal. On 20 January 2012 Mawetse launched the review application, culminating in the present appeal. Counsel for Mawetse conceded in this court that at the time of Mawetse's application to the DMR, the time period in respect of the prospecting right (calculated as a four-year period) had not yet lapsed, but had lapsed at the time when Mawetse had launched its application in the court below. As stated earlier, Dilokong filed a counter-application which sought to compel the DMR to cause the F execution of the prospecting right.

[7] It is against this factual backdrop that we must determine whether Masipa J was correct in her findings. A useful starting point is to examine the provisions of the MPRDA in respect of prospecting rights.

The statutory framework G

[8] The MPRDA has been substantially amended by the Mineral and Petroleum Resources Development Amendment Act 49 of 2008. Those amendments do not apply in this case, since they were promulgated subsequent to the events material to the central issues in this case. H References to the MPRDA are therefore to the Act in its pre-amendment form. The statutory procedure in respect of an application for a prospecting right is set out comprehensively in Bengwenyama Minerals

Majiedt JA (Navsa ADP, Leach JA, Zondi JA and Meyer AJA concurring)

(Pty) Ltd and Others v Genorah Resources (Pty) Ltd and Others A . [3] Sections 16 and 17 of the MPRDA regulate the application for and the granting and duration of prospecting rights. Section 16 sets out the mechanical bureaucratic procedure for the application. The Regional Manager's office plays a central role in this process but it fulfils a very limited, clearly circumscribed role. For present purposes, the following provisions are of B importance:

Section 16(4) provides:

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

(a)

C to submit an environmental management plan; . . . .'

And s 16(5) reads:

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

D [9] Section 17 is of cardinal importance. It concerns the granting and duration of prospecting rights. Section 17(1) reads as follows:

'17 Granting and duration of prospecting right

(1) Subject to subsection (4), the Minister must grant a prospecting right if —

(a)

the applicant has access to financial resources and has the technical E ability to conduct the proposed...

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