Concourt mining ruling welcomed

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Kumbaironore

Independent Newspapers

Two workers at a Kumba Iron Ore mine. Photo: Simphiwe Mbokazi.

Cape Town - A Constitutional Court ruling making it the exclusive holder of a disputed mining right in Kuruman in the Northern Cape was welcomed by the mineral resources department on Friday.

“The judgment has confirmed the constitutionality of the Mineral and Petroleum Resources Development Act, as well as well as the role of the state as custodian of minerals,” said department spokeswoman Ayanda Shezi.

“It has also further confirmed the role of the state in imposing conditions linked to the awarding of rights.”

On Thursday, the court ruled that the department became the exclusive holder of a disputed mining right when Arcelor Mittal SA's (Amsa) old order mining rights expired in 2009.

The court set aside orders by the High Court in Pretoria and the Supreme Court of Appeal (SCA) that the rights resided with the Sishen Iron Ore Company.

It replaced the lower courts' orders with an order declaring that the conversion of Sishen's old order mining right did not include Amsa's old order mining right.

It declared that Amsa's old order mining right ceased to exist in terms of the Mineral and Petroleum Resources Development Act (MPRDA) on April 30, 2009.

“The old order mining right reverted to the state, as custodian of the right, in terms of the act,” the court found.

However, it set aside the department's director general's refusal to grant Sishen a mining right in respect of minerals which were the subject matter of Amsa's old order mining right.

The court found Sishen was “the only party competent to apply for and be granted the mining right” under section 23 of the act.

“The director general of the department of mineral resources is directed to allow Sishen Iron Ore Company (Pty) Limited to apply again within three months from the date of this order for the remaining 21.4 percent undivided share in the right to iron ore and quartzite on the Sishen Mine properties,” the court ordered.

Sishen and Amsa held undivided shares of a mining right in the properties on which Sishen's mine was located, and which were issued in terms of the Minerals Act before the MPRDA came into effect.

Sishen held 78.6 percent of the shares and Amsa 21.4 percent.

The MPRDA entitled holders of mineral rights under the previous legislation to convert their old order mining rights within five years of the new act coming into operation. If they failed to do so, the rights expired. Sishen converted its shares, but Amsa did not.

Imperial Crown Trading (ICT) applied for a prospecting right in respect of Amsa's share. Sishen applied for a mining right in respect of Amsa's expired share.

The mineral resources minister granted a prospecting right to ICT and declined Sishen's application for mining rights.

Sishen then approached the High Court in Pretoria to have the decision reviewed, and for the setting aside of the granting of the prospecting rights to ICT.

Amsa, which joined as a party, sought a declarator to the effect that Sishen had been granted 100 percent mining rights when it was converting its shares.

The Constitutional Court action was brought by Mineral Resources Minister Susan Shabangu, her director general and deputy director general, the department's regional manager, and ICT.

The court ordered on Thursday that Amsa pay 50 percent of the costs of the state applicants and 50 percent of Sishen's legal costs, and that ICT pay 50 percent of Sishen's legal costs.

Shezi said the cost order made it clear that the department had been fully justified in appealing the decisions of the High Court in Pretoria and the SCA. - Sapa


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