The Minister appealed to the Supreme Court of Appeal (“the SCA”) against the judgment of the North Gauteng High Court. In this article we will focus on the Court’s reasons for its judgments, rather that the Minister’s grounds for appeal.
THE JUDGMENT
The SCA’s reasoning revolved around the question: What did the holder of mineral rights have before the enactment of the MPRDA? Once this question was answered it would be possible to assess whether an expropriation of mineral rights occured.
In order to answer this question Wallis JA embarks on an investigation on the history of mineral rights in South Africa. The investigation starts at the common law and goes right through the pre-Union, 1910 to 1967 and 1991 dispensations. The SCA points out that, in all these eras the right to mine (as opposed to the mineral rights) was always awarded by the State to whomever it chose from time to time and without a right to mine, the mineral right did not have much value.
In terms of the 1991-Act the holders of mineral righs were allocated an exclusive right to apply for a mining right, or to authorise a third party to apply for same. However, the State still had to grant a mining right to that applicant.
In terms of the transitional provisions of the MPRDA the holder of an unused mineral right immediately before the anactment of the MPRDA was given a similar exclusive right to apply for a mining or prospecting right, but this right would only apply for a period of one year.
The only change that came about with the enactment of the MPRDA in 2004 was that the holders of mineral rights were not the only persons who could apply for mining right – once the exclusive right lapsed the rights would be awarded on a first-come-first-served-basis.
Therefore, the SCA found, it was the failure of a holder of mineral rights to apply for a prospecting or mining right within the one year period that caused his mineral rights to be lost. The imposition of a time limit in which rights had to be exercised could not be an expropriation.
Nugent JA gave separate reasons for a similar conclusion – he argued that by allowing anybody to apply for mining rights did nor expropriate mineral rights, it simply reduced the value of the property held by the ertswhile mineral rights holders. As a value cannot in itself be a property there could not be an expropriation.
APPEAL TO THE CONSTITUTIONAL COURT
AgriSA filed an application in the Constitutional Court for leave to appeal against the judgement of the SCA. The application is based on various grounds but the fundamental basis for the appeal is the fact that the SCA judgement denies the owners of mineral right the protection they enjoy in terms of section 25 of the Constitution. The State has to pay compensation when property, such as mineral rights, is expropriated. A thorough report on the appeal will be given once the matter is finalised.
