INSIGHTS

The Department of Mineral Resources and Energy (“DMRE”) and Department of Environment, Forestry and Fisheries (“DFFE”) must work collaboratively within legislative prescripts to bring balance between the two competing objectives as espoused in section 2(h) of the MPRDA, which provides that the MPRDA must:

give effect to section 24 of the Constitution by ensuring that the nation’s mineral and petroleum resources are developed in an orderly and ecologically sustainable manner while promoting justifiable social and economic development”.

When an application for a mining right is received in the ordinary course, the application and execution of sections 9,10 and 22 of the MPRDA are both peremptory as well as substantial, and in fact regulate the entirety of orderly issuance of mining rights from a procedural, material and social perspective.

For purpose of the limited context of this article, section 102 provides as follows:

 “A … mining right, … may not be amended or varied (including by … the additional (sic) of minerals …, mineralised bodies or strata, which are not at the time the subject thereof) without the written consent of the Minister.”

This wording has led to an established practice by the DMRE to allow mine extensive and indefinite mine expansions to be approved in terms of section 102, and section 102 alone.

However, allowing section 102 to serve as a vessel for de facto new mining right applications, opens the door for circumvention of the peremptory application of all these provisions. This in turn leaves vast tracts of legislative provisions which are ordinarily invoked in mining right applications in a legal laguna and entirely unenforceable.

A typical example is where section 102 is utilized to allow mining to commence on a portion of land which is non-contiguous to the property over which the original mining right is held. Such an application is premised on the fact that the wording of section 102 does not limit the extent or location of such an “expansion”.

The patently absurd outcome of such an interpretation of section 102 is that a person who is the holder of any mining right at any location, for any mineral, can obtain the right to mine for any other mineral on any further and additional portions of land, irrespective of the location of that property, based purely on the premise that it has an extant mining right elsewhere in South Africa.

Section 102 does not in itself invoke provisions associated with new mining rights

Thus, additional mining rights may ostensibly be obtained via section 102, without any statutory obligation on the DMRE to take heed of any of the peremptory provisions of sections 9, 10 or 27 of the MPRDA. This is so because these provisions are invoked solely on the premise that an actual application for a mining right was submitted. This premise is conveniently circumvented by section 102 consents which are, in solidum, used by holders and the DMRE to allow the expansion areas covered by a mining right.

Section 102 not only refers to the expansion of the area covered by a mining right, but also includes a reference to minerals. If the abovementioned interpretation is therefore followed to its logical conclusion, it would mean that the holder of a mining right for a specific mineral at a specific location or property is not only allowed to obtain the right to mine that same mineral on a different property, but could also incorporate additional or different minerals into its exiting right over the extended area by a simple section 102 consent. This creates the implied position that once a person has obtained a mining right of any nature at any location in South Africa, the Minister is immediately empowered to single-handedly grant consent to that entity to mine for any mineral at any other location in South Africa, without the holder ever having to make any further application for a mining right under section 27 of the MPRDA.

Peremptory provisions are rendered nugatory or discretionary

When de facto new mining rights can be obtained by means of a section 102 consent in solidum, various provisions of the MPRDA that would apply by default in the ordinary course, become unenforceable.

Section 22 of the MPRDA

There is no cross reference between sections 22 and 102 of the MPRDA.  Section 22(1) expressly provides that:

Any person who wishes to apply to the Minister for a mining right must simultaneously apply for an environmental authorisation

Even if a holder who seeks a section 102 consent in isolation submits an application for an EA, the two applications do not have to run concurrently as would ordinarily be required under section 22(1). A mine would thus not be required to coordinate the section 102 application with an application for environmental authorisations under section 22(1) of the MPRDA, leaving the carefully crafted coordination provisions nugatory.

Moreover, section 22(2) sets out the peremptory checks and balances for acceptance of an application for mining rights, even before it is processed. Since these provisions do not apply when section 102 consents are sought, there is nothing preventing the Regional Manager (RM) from accepting substantial mine “expansion” applications that do not comply with these fundamental requirements. This in turn leads to inherent regulatory uncertainty also associated with section 9, as set out below.

The RM is also not empowered to issue any instructions whatsoever under subsections 22(4)(a) and (b). This in turn means that the holder of an existing right would be able to submit an application for an EA on its own terms (if at all).  

For the same reasons as set out above, the submission of a de facto new mining right application, disguised as an application for consent for the extension of an area under section 102, means that the Minister is also not required to make an assessment under section 23(1) as to the viability of the application. Given that section 23 sets out the very minimum requirements for issuance of mining rights, so as at least to ensure that exploitation of mineral resources are dealt with in accordance with the very objects of the MPRDA, it is no stretch to deduce that the legislature did not envisage the abuse of section 102 to the extent that it supplants the regulatory content of section 22 of the MPRDA.

In summary therefore, if section 102 is given such a wide interpretation, an existing holder can indefinitely expand its mining operations, even on non-contiguous portions and with the additional of further or alternative minerals without any requirement to upfront:

• demonstrate its ability to optimise mining in accordance with the Mine Work Programme (s 23(1)(a));
• show technical ability of financial resources to conduct the operations (ss 23(1)(b) and (c))
• demonstrate environmental feasibility (s 23(1)(d))
• submit a viable social and labour plan (s 23(1)(e))
• doa pre-emptive check on its ability to abide by the Mine health and Safety Act (s 23(1)(f))
• show compliance with the MPRDA with regards to (at least) its existing operations (s 23(1)(g))
• demonstrate that the operations will further the objects of both the MPRDA and  the mining charter (s 23(1)(h))

The application (or not) of all the above requisites is left at the discretion of the Minister and the implicit peremptory requirement to reject any mining right application that does not comply with the above requirements, falls by the wayside.

Section 10 of the MPRDA

“10.   Consultation with interested and affected parties.—(1)  Within 14 days after accepting an application lodged in terms of section 16, 22 or 27, the Regional Manager must in the prescribed manner—

(a) make known that an application for a prospecting right, mining right or mining permit has been accepted in respect of the land in question; and

 (b) call upon interested and affected persons to submit their comments regarding the application within 30 days from the date of the notice.

(2)     If a person objects to the granting of a prospecting right, mining right or mining permit, the Regional Manager must refer the objection to the Regional Mining Development and Environmental Committee to consider the objections and to advise the Minister thereon.”

As set out above, the untenable position created by section 102 is that of a vessel by means of which an indefinite amount of additional mining areas, for any mineral, may be obtained based purely on the fact that the applicant is the holder of an existing mining right.

There is no reference to an “applicant” in the MPRDA, other than an applicant in terms of sections 13 (reconnaissance permission), 16 (prospecting rights), 22 (mining rights), 27 (mining permits), 32 (retention permits), as well as the various authorisations applicable to petroleum resources by virtue of section 69(2). More specifically, the word “applicant” is not used in section 102, and section 10 further specifically only refers to an applicant under sections 16, 22 and 27 (which is expanded to petroleum related applications as per section 69(2)).

It is also important to note that section 10(1)(b) refers to “the land in question”. The provision therefore envisages a statutory process and recourse aimed at the protection of interested and affected parties, specifically under circumstances where new “land” becomes the potential subject of mining rights.

Section 10 is also not beholden to any EIA process. It is a broader, peremptory and standalone requirement that has to be executed within the context of the MPRDA itself and invokes the mandate of a statutory body, the Regional Mining Development and Environmental Committee (“RMDEC”) which is not encumbered with the processing of the mining rights application or the EIA applications (if any) as such.

This would also mean that  the DMRE would incur no statutory obligations to implement the provisions of section 10 in relation to a section 102 “application”.

As such, any person potentially affected by extensions of mining rights under section 102 would similarly have no recourse in terms of this provision. The very purpose of the RMDEC and the process of advising the Minister through the s 10 procedures are accordingly entirely circumvented by a section 102 process of obtaining mining rights over additional properties and with it, the very objective of the MPRDA as set out in section 2 of the MPRDA.

Section 9 of the MPRDA

The MPRDA seeks to allow applicants for mining rights to do so in a “first come first serve” sequence as per section 9 of the Act. Section 9 in turn refers to an “applicant”. Again, there is no reference to an “applicant” in the MPRDA other than an applicant in terms of sections 13 (reconnaissance permission), 16 (prospecting rights), 22 (mining rights), 27 (mining permits), 32 (retention permits), as well as the various authorisations applicable to petroleum resources.

The reference to “application” in section 9 is therefore limited to defined applications under sections 13, 16, 22, 27 and 32 (and equivalent petroleum related provisions) alone. Accordingly, a section 102 consent as a “standalone” provision is not capable of slotting in with the sequential processing objectives of section 9.

The sequential processing of section 102 “applications” is thus apparently left at the discretion of the Minister. The fact that the Minister might artificially and in an entirely discretionary fashion take heed of whether prospecting rights are extant in the hands of a third party before granting the consent is neither here nor there. Since section 9 does not apply on the one hand, and no such discretionary powers are otherwise conferred by the MPRDA on the other, section 102 “applications” (as standalone applications) are by necessity processed in a complete statutory vacuum.

The wording of section 102 in context of environmental authorisations is indicative of its meaning with respect to mining rights

Similar to the amendment of a mining right, section 102 also states that an amendment of an EA may not occur without the written consent of the Minister. The procedures for substantial amendment of an EA are (at best) positively regulated in terms of regulations 31 and 32 of the EIA regulations. At worst, opening a new shaft or pit on an entirely different and even non-contiguous portion of land constitutes an activity as intended in item 17[1] of Listing notice 2, which would require an entirely new EA[2].

In this regard, heed should be taken of the principle of generalia specialibus non derogant, that is, general provisions are never presumed to override specific ones on the same subject matter. While the Minister’s “consent” is required for an amendment to an EA under section 102, such a consent would not draw a line through the legislative requirements otherwise applicable to such an amendment or EA application. The preclusion in Section 102 is thus not dispositive of other positive obligations arising from an operation which is a new mine in all but name.

Summation

The notion that mining rights on properties additional to properties subject to the existing mining right (let alone properties far removed from the existing mining area and even for other minerals, as noted above) can be obtained in a complete regulatory vacuum contradicts the very objective of the MPRDA.

This in itself reflects clearly that, the legislature never intended that section 102 be applied (read abused) in this fashion.

Procedures and prerequisites for consideration and approval of all applications for mining (and other rights) in terms of the MPRDA are highly regulated, both in the main text as well as the MPRDA regulations. The MPRDA contains no such provisions whatsoever for ostensibly isolated “applications” under section 102. Section 102 also does not reflect the word “application” at all. It simply states that any amendment approval as listed in the section, cannot pass without the consent of the Minister.

Given the extraordinary implications of in effect treating section 102 as a complete substitute for any and all additional mining rights applications by the holder of an existing mining right, the potential (already realized in many instances) is that the very fabric of the MPRDA and the NEMA (as it relates to mining) stands to be thrown in disarray. There can be no doubt that such an interpretation is so absurd that it could never have been intended by the legislature. 

This does not however render section 102 nugatory. There is no other provision in the MPRDA which allows for the amendment of mining rights and associated documentation, which option must clearly be made available to the holder of existing rights. Section 102 therefore has a clear and substantial rationale, if applied under the appropriate circumstances.

As above however, where any such amendment invokes other substantive provisions of the MPRDA, the requisites of section 102 comingle with, but do not override, those provisions.  

To the extent that a consent in terms of section 102 is implicit in other provisions of the MPRDA (e.g. the grating of additional mining rights in terms of section 23), section 102 must be regarded as a provision ex abundanti cautela (in an abundance of caution), primarily aimed at ensuring that amendments to existing rights as substantiated by various documents are at least vetted by the Minister, but has never been intended to cause the obliteration of the carefully crafted logical matrix of the MPRDA itself, and as read with the NEMA.