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Applicable Case Law

Minister of Mineral Resources v Mawetse (SA) Mining Corporation (Pty) Ltd 2016 (1) SA 306 (SCA)

Background

On the 24th of November 2006, Dilokong Chrome Mining Corporation (Pty) Ltd (“Dilokong”) applied in terms of section 16 for a prospecting right for chrome in respect of the Farm Driekop. On the 21st of June 2007, the Deputy Director General (DDG) signed an approval of a recommendation to grant a prospecting to Dilokong for a period of 4 years subject Dilokong submitting outstanding information including, shareholders agreement with Black Economic Empowerment Entity holding not less than 26 percent shareholding of the equity in the operation. On the 18th of July 2007, a letter was written to Dilokong confirming that it had been granted a prospecting right in respect of the farm Driekop.

In September 2009, unaware that the right had been granted, Mawetse (SA) Mining Corporation (Pty) Ltd (“Mawetse”) applied for a prospecting right which was rejected for the reason that another application has already been granted. In an internal appeal against the grant of a prospecting right to Dilokong, the Minister upheld Dilokong’s prospecting right and dismissed Mawetse’s appeal. Mawetse applied for a review of the Minister’s decision in the Gauteng Division of the High Court. Dilokong filed a counter-application to compel the Department of Mineral Resources to execute the prospecting right. The Judge decided that Dilokong did not hold a valid prospecting right which could lawfully be exercised and it no longer constituted a bar to the consideration of Mawetse’s application for a prospecting right.

Issues

The issue on appeal was whether a prospecting right had lawfully been granted to Dilokong and, if so, whether Dilokong could lawfully exercise that right. Allied to this issue, was whether that right had lapsed due to its expiry or abandonment.

Decision

The Supreme Court of Appeal indicated that in order to determine whether a prospecting right has lapsed, the determination requires a consideration of when exactly the right was granted. The Court further emphasised the importance of distinguishing between three legal processes, namely; – the granting of a right, the notarial execution of a right and the coming into effect of a right:
- The right is granted on the date which the DDG approves recommendation;
- notarial execution of the right does not constitute granting since the granting is not contractual in nature but a unilateral administrative act by the Minister;
- The right becomes effective date on the EMP is approved, that is the date from which a successful applicant can actively start prospecting.

The Court held the period of the duration of the right must be computed from the date on which Dilokong had received confirmation of the grant. “It matters not, for the purposes of computing the period of the right, that the right still had to be executed and that the right had not become effective”. The period for which the prospecting right endured had to be computed from 18 July 2007 when Dilokong was informed of the grant and had expired due to the effluxion of time on 17 July 2011.

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