THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Reportable

Case No: 20069/14

In the matter between

MINISTER OF MINERAL RESOURCES

FIRST APPELLANT

DIRECTOR-GENERAL, DEPARTMENT OF
MINERAL RESOURCES

SECOND APPELLANT

DEPUTY DIRECTOR-GENERAL: MINERAL
DEVELOPMENT, DEPARTMENT OF
MINERAL RESOURCES

THIRD APPELLANT

REGIONAL MANAGER: LIMPOPO REGION,
DEPARTMENT OF MINERAL RESOURCES
FOURTH APPELLANT

DILOKONG CHROME MINE (PTY) LTD

FIFTH APPELLANT

and

MAWETSE (SA) MINING CORPORATION (PTY) LTD            RESPONDENT

Neutral citation: Minister of Mineral Resources v Mawetse (SA) Mining
Corporation (Pty) Ltd (20069/14) [2015] ZASCA 82 (28 May 2015)

Coram:
Navsa ADP, Leach, Majiedt, Zondi JJA and Meyer AJA

Heard:
7 MAY 2015

Delivered:
28 MAY 2015

Summary:
Mining – prospecting right – when granted in law – whether BEE
compliance can be attached as a condition of the right – lapsing of the right
due to expiry.

______________________________________________________________

ORDER
______________________________________________________________

On appeal from: Gauteng Division of the High Court, Pretoria (Masipa J,
sitting as court of first instance):

(1)
The appeal is dismissed with costs, including those of two counsel.
______________________________________________________________

JUDGMENT
______________________________________________________________

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

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
(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 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.

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 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 has lapsed as it has expired.
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, 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.

Background

[3] On 24 November 2006 Dilokong applied, in terms of s 16 of the Mineral
and Petroleum Resources Development Act 28 of 2002 (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. 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 respect of Driekop. On
that same day the DDG signed an approval of a recommendation to grant a
prospecting right to Dilokong for 4 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 (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
s 103(1) and (2) of the MPRDA in respect of the grant and refusal of
prospecting rights.

[5] On 14 November 2007, the date on which the prospecting right was
about 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 follows:
„2 Objects of Act
The objects of this Act are to-
. . .
(d) substantially and meaningfully expand opportunities for historically 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) which is in
turn owned by East Asia Metal Investment Company Ltd and the Limpopo
Development Corporation (Limdev), a Limpopo provincial government

1 In accordance with the then applicable Broad-Based Socio-Economic Empowerment
Charter for the South African Mining and Minerals Industry, GN 838, GG 33573, 20
September 2010 (the Mining Charter), developed in terms of s 100(2)(a) of the MPRDA.

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 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 of the facts set out
above, applied in September 2009 for a prospecting right for various minerals
(including chrome) in respect of various farms, including Driekop. Its
application in respect of Driekop was rejected in terms of 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 I will 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 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 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 appeal. On 20 January 2012 Mawetse launched the review

2 Section 16(2)(b) of the MPRDA provides as follows:
„(2) The Regional Manager must accept an application for a prospecting right if –
(b) no other person holds a prospecting right, mining right, mining permit or retention
permit for the same mineral and land‟.

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 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

[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.
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 (Pty) Ltd v Genorah
Resources (Pty) Ltd.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 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) To submit an environmental management plan. . . .‟
And s 16(5) reads:

3 Bengwenyama Minerals (Pty) Ltd & others v Genorah Resources (Pty) Ltd & others 2011 (4)
SA 113; [2010] ZACC 26 (CC) paras 32 – 38.

„(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.‟

[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 ability
to conduct the proposed prospecting operation optimally in accordance with
the prospecting work programme;
(b) The estimated expenditure is compatible with the proposed prospecting
operation and duration of the prospecting work programme;
(c) The prospecting will not result in unacceptable pollution, ecological
degradation or damage to the environment;
(d) The applicant has the ability to comply with the relevant provisions of the
Mine Health and Safety Act, 1996 (Act 29 of 1996); and
(e) The applicant is not in contravention of any relevant provision of this Act.‟
The key provision is s 17(1)(e).
Section 17(4) provides:
„(4) The Minister may, having regard to the type of mineral concerned and the extent
of the proposed prospecting project, request the applicant to give effect to the object
referred to in section 2(d).‟
I have set out the provisions of s 2(d) above.
For present purposes ss 17(5) and (6) are significant:
„(5) The granting of a prospecting right in terms of subsection (1) becomes effective
on the date on which the environmental management programme is approved in
terms of section 39.
(6) A prospecting right is subject to this Act, any other relevant law and the terms and
conditions stipulated in the right and is valid for the period specified in the right, which
period may not exceed five years.‟ (emphasis added)

[10] Before turning to deal with the substantive issues outlined above, I
pause to mention that prior to the hearing the following note was sent to the
parties by the Registrar of this court:
„The parties are directed to address the following question as a matter of urgency.
Has the appeal not been rendered moot because the period for which the

prospecting right was purportedly granted to the Fifth Appellant [Dilokong] has
passed?‟
The parties filed supplementary heads of argument on this aspect with
Mawetse answering the question in the affirmative and Dilokong contending
that the appeal has not been rendered moot. Since the conclusion by Masipa
J on whether the right has expired due to the necessary procedural steps not
having been taken is contested, and since Dilokong contended that the
question of the expiry of the period for which the right was granted is
dependent on when the time starts to run (which also in dispute), it is
necessary to deal with all these issues in the present appeal. These aspects
are interwoven and are furthermore to be considered against the backdrop of
the fact that the period for which the right endured had, on Mawetse‟s
concession, not lapsed when Mawetse applied to the DMR, but had lapsed
when Mawetse launched its court application.

Was the prospecting right lawfully granted and, if so, may Dilokong
exercise that right?

[11] The primary dispute is whether Dilokong could lawfully have been
required to be BEE compliant. Section 17(1), read with s 17(4), bears
consideration. Dilokong contended that, once the requirements in s 17(1) had
been met, the Minister was legally obliged to grant the right. According to
Dilokong compliance with the BEE requirements in s 2(d) is not a precondition
for the granting of a prospecting right, as opposed to a mining right, and it
could not be lawfully imposed. These submissions are untenable on the law
and on the facts. In the DDG‟s approval of the recommendation by the
Regional Manager that Dilokong be granted the prospecting right in respect of
Driekop, it was expressly recorded as follows:
„5  Assessment of Charter Compliance
5.1 Compliance with section 17(4)
The Shareholders Agreement and/or Share Certificates were not submitted.
6  Recommendation

6.1 In light of the fact that the applicant has complied with all the requirements of
section 17(1) of the Act, as indicated in paragraph 4 above, it is recommended that
you, please, consider to –
6.1.1 grant a prospecting right to Dilokong Chrome Mine in accordance with section
17(1) of the Act for a period of four (4) years, subject to –
(i)  the applicant, where applicable, submitting (before execution) all other
outstanding information and or documentation (including Shareholders Agreement
with BEE entity not (sic) holding not less than 26% of equity in the operation and
financial guarantee in the amount of R15 000.00); and
6.1.2 . . . .‟ (my emphasis)

[12] The DDG approved the recommendation in the terms set out in 6.1.1
above and affixed his signature to that effect. Thus the recommendation and
its rationale became his decision. He also signed a power of attorney
authorising the Regional Manager to sign the prospecting right in favour of
Dilokong in respect of Driekop „according to the approval signed by me [the
DDG] today‟. That decision of 21 June 2007 was conveyed to Dilokong by
letter dated 18 July 2007. It was envisaged in the letter that the Regional
Manager would approve the environmental management plan on the date of
the signing of the right, ie the date of its notarial execution. As stated, this
never happened since Dilokong was regarded as being non-BEE compliant.
The DDG had thus plainly and unequivocally attached BEE compliance as a
condition in granting the right. Moreover, the unsigned draft notarial deed in
terms whereof the prospecting right was to be executed, envisaged in clause
16 that Dilokong had to be BEE compliant. It is necessary to record that in the
affidavit filed on behalf of the DMR the BEE condition was accepted as having
been communicated.

[13] Dilokong contended that no request had in fact been made in terms of
s 17(4) as far as s 2(d) BEE compliance was concerned and, if it could be
said to have been made, it was never a condition as contemplated by the Act.
Furthermore, so it was submitted, it was in any event not conveyed to
Dilokong in the DDG‟s letter of 18 July 2007. Counsel emphasized that
s 17(4) speaks of a „request‟ not a „requirement‟ or a „condition‟. He

juxtaposed s 17(4) with s 23(1)(h) where, in respect to mining rights as
opposed to prospecting rights, BEE compliance is a prerequisite:
‟23 Granting and duration of mining right
(1) Subject to subsection 4, the Minister must grant a mining right if –
(h) the granting of such right will further the objects referred to in section 2(d)
and (f) and in accordance with the charter contemplated in section 100
and the prescribed social and labour plan.‟

[14] A submission was made in the written heads of argument on behalf of
Dilokong that an applicant for a prospecting right could not in law be
compelled to be BEE compliant and that the Mining Charter does not apply to
prospecting rights. The submission is devoid of merit. Section 100(2)(a) of the
MPRDA provides for the development of the Mining Charter in order to
„ensure the attainment of Government‟s objectives of redressing historical,
social and economic inequalities as stated in the Constitution.‟ The charter
must „set the framework for targets and timetable for effecting the entry of
historically disadvantaged South Africans into the mining industry, and allow
such South Africans to benefit from the exploitation of mining and mineral
resources‟. It must also set out, amongst others, how the objects referred to in
s 2(d) above can be achieved.   Section 1 of the MPRDA expressly includes
prospecting in the definition of „broad-based economic empowerment‟:
„. . . [a] social or economic strategy, plan, principle, approach or act which is
aimed at –
. . .
(b) transforming such industries so as to assist in, provide for, initiate or
facilitate –
(i) the ownership, participation in or the benefiting from existing or future
mining, prospecting, exploration or production operations; . . .‟
Paragraph 2 of the charter repeats this definition verbatim and thus expressly
includes prospecting.

[15] Section 17(4) unequivocally empowers the Minister to make the grant
of a prospecting right conditional upon compliance with the s 2(d) BEE
requirement as occurred in this case. In this regard Dilokong‟s approach on
the papers is instructive. The DMR‟s answering affidavit was deposed to by

Ms Motlatso Constance Kobe, the Chief Director: Mineral Regulation Branch
in the Minister‟s office. She commences her affidavit by setting out the
process in the issuing of a prospecting right and states that:
„3.5 It is apparent from paragraph 3 to “PMW3” that the Fifth Respondent was
called upon to comply with the object of Section 2(d) of the Act by submitting not later
than the 4th February 2007 the following documents:-
(3.5.1) duly signed shareholders agreement;
(3.5.2) share certificates and shareholders register;
(3.5.3) articles and memorandum of association of the company;
(3.5.5) any other agreement or documents relating to the agreement.‟
In Dilokong‟s answering affidavit the deponent expressly concurs with,
amongst others, paragraph 3.5 above of Ms Kobe‟s affidavit. It is clear that all
concerned, and Dilokong in particular, had treated the grant as one requiring,
amongst others, compliance with the s 2(d) BEE requirement. And Dilokong
was required to demonstrate its compliance by submitting a shareholder
agreement evidencing the required 26% BEE entity shareholding. The papers
also show, and Dilokong says so unequivocally in its answering affidavit, that
it had made attempts to meet this requirement, to no avail, due to the impact
of the moratorium placed by government on Limdev‟s disposal of its
shareholding in ASA Metals. It is clear that before this litigation commenced,
the DMR accepted this to be the position. On the evidence therefore the
Minister, as she was in law entitled to do, issued a request through her lawful
delegate, the DDG, to Dilokong to give effect to the object of black economic
empowerment in s 2(d). The Minister (or her delegate) is expressly
empowered to make the request since the section provides that she „may
request‟.4 The emphasis during argument by Dilokong on the use of the word
„request‟ in s 17(4) is misplaced. „To request‟ means „to politely or formally ask
(someone) to do something‟.5 It is not contrary to a demand or a requirement,
as it was contended. And it hardly lies in Dilokong‟s mouth to argue along
these lines when it had not only concurred with the DMR that such a request
had been made, but had also on the common cause facts actively set out to
heed this request, albeit without any success. In this context a request is a

4 Compare: Paper, Printing, Wood and Allied Workers’ Union v Pienaar NO & others 1993 (4)
SA 621 (A) at 640 A.
5 The Concise Oxford English Dictionary, 12 ed, (2011).

necessary preliminary step in ensuring compliance with the MPRDA‟s BEE
imperative.

[16] The affirmative action provisions in the MPRDA must be understood for
what they are – a focused intervention to redress past inequalities in the
mining industry. The Constitutional Court has emphasized that its objects are
to address in a direct and forthright manner the historical exclusion of black
South Africans and to facilitate equitable access to opportunities in the mining
industry. One of the ways of achieving this in the MPRDA is to abolish the
entitlement to sterilise mineral rights.6 And in Bengwenyama that court said:
„There is no denying that past mining legislation and the general history of racial
discrimination in this country prevented black people from acquiring access to
mineral resources. Dispossession of land aggravated the situation. The Act [ie the
MPRDA] seeks to redress these past wrongs‟.7 (footnotes omitted)

[17] In summary on this first issue: the Minister‟s delegate, the DDG, had
lawfully requested Dilokong to comply with the s 2(d) BEE requirement.
Dilokong acknowledged the request and had sought to comply with it, without
any success. The objects set out in s 2(d) are of cardinal importance when the
purpose of the MPRDA and the Mining Charter is borne in mind and, as our
courts have stressed, are essential to redress the historical inequalities in the
mining industry. Compliance with the request is not merely optional and the
grant of the prospecting right was expressly made subject to such
compliance. Absent compliance, the DMR was lawfully entitled to refuse to
execute the right. Dilokong was non-compliant with s 17(4), read with s 2(d) of
the MPRDA. The right was conditionally granted in terms of s 17(2)(a), read
with s 17(1), namely on condition that Dilokong complies with the request.
Section 17(6) makes a prospecting right subject to the MPRDA, any other
applicable law and the terms and conditions stipulated in the right. As
demonstrated above, compliance with s 2(d) was unequivocally imposed as a
condition of the grant in the DDG‟s approval of the recommendation. On the

6 Agri SA v Minister for Minerals and Energy 2013 (4) SA 1; [2013] ZACC 9 (CC) paras 1–3.
7 Bengwenyama Minerals (Pty) Ltd & others v Genorah Resources (Pty) Ltd & others, supra,
para 28. See also: Minister of Mineral Resources & others v Sishen Iron Ore Co (Pty) Ltd &
another 2014 (2) SA 603; [2013] ZACC 45 (CC) paras 3-10.

common cause facts Dilokong had accepted that such a request had been
made as a condition of the grant and had unsuccessfully sought to comply
with it. The unsigned draft notarial deed is consonant with this factual and
legal matrix inasmuch as it also envisaged BEE compliance on Dilokong‟s
part. In the premises, the court below correctly concluded that the Dilokong‟s
failure to meet this condition had the effect of barring Dilokong from
implementing its right to prospect.

Has the right lapsed?

[18] Any right issued in terms of the MPRDA lapses, amongst others,
whenever it expires (s 56(a)) or is abandoned (s 56(f)). Expiry of the right
would occur upon the effluxion of the time period for which the right has been
granted. That determination requires a consideration of when exactly the right
was granted. I interpose to reiterate that the unsigned draft notarial deed in
terms whereof the right was to be executed is at variance with the DDG‟s
approval insofar as the duration of the right is concerned. The draft deed
stipulated a period of three years, whereas the DDG‟s approval was for four
years. As I will presently demonstrate, the discrepancy is immaterial, since the
right would have lapsed even taking into account the longer period of four
years.

[19] There are three distinct legal processes which must be distinguished
from each other, namely the granting of, execution of, and coming into effect
of the right. A prospecting right is granted in terms of s 17(1) on the date that
the DDG approves the recommendation (a contrary finding was made in two
Northern Cape High Court decisions to which I shall in due course refer). In
the present instance that occurred on 21 June 2007. For practical purposes
communication of that decision will enable challenges by the grantee to
conditions which it might consider objectionable and furthermore will alert not
only the grantee but also competitors who might have an interest. The period
for which the right endures has to be computed from the time that an applicant
is informed of the grant, in this instance 18 July 2007. From the date of the
grant Dilokong became the holder of a valid prospecting right as defined in the

MPRDA. But in terms of s 19(2)(a) of the MPRDA that right had to be
registered in the Minerals and Petroleum Titles Office.8 That Office has been
established in terms of s 2(1) of the Mining Titles Registration Act 16 of 1967
(the MTR Act). While s 5(1) of the MPRDA provides that a prospecting right is
a limited real right in respect of the mineral to which it relates, s 2(4) of the
MTR Act provides that „[t]he registration of a right in terms of this Act in the
Mineral and Petroleum Titles Registration Office shall constitute a limited real
right binding on third parties‟. These provisions appear at face value to be
contradictory with regard to the nature of the right and its legal consequences.
But that is not an aspect which need concern us now – for present purposes I
accept that the right becomes a limited real right only upon registration. The
purpose and effect of registration is not only that the right becomes binding on
third parties, but it also serves as notice to the general public, akin to
registration of immovable property in the Deeds Office. The granting of a
prospecting right becomes effective on the date on which the environmental
management plan lodged by the applicant in terms of s 16(4)(a) is approved
in terms of s 39.9  That is the date from which a successful applicant can
actively start prospecting.

[20] The gravamen of Dilokong‟s contentions is that the period of four years
in the DDG‟s approval had not started running since the prospecting right has
never become effective and had not been executed. This is an untenable
proposition. If correct, it would mean that the right is sterilised indefinitely in
favour of Dilokong. No applications for that right, ie for chrome (base metals)
in respect of the farm Driekop could then be considered while the right
remains sterilised.10 An indeterminate reservation of the right in this fashion is
contrary to the letter and spirit of the MPRDA. Section 17(6) expressly
provides that a prospecting right remains valid for a maximum period of five
years. Such an interpretation offends one of the MPRDA‟s key objectives,

8 Section 19(2)(a) reads:
„(2) The holder of a prospecting right must –
(a) lodge such right for registration at the Mineral and Petroleum Titles Registration
Office within 60 days after the right has become effective.‟
9 Section 17(5) of the MPRDA.
10 Section 16(2)(b).

namely that mineral rights must be exploited within stipulated timeframes for
the benefit of the public. In Agri SA it was held that one of the objects of the
MPRDA is to abolish the entitlement to sterilise mineral rights.11 The structure
of the MPRDA in any event militates against Dilokong‟s contentions. Section
19(2)(b) provides that the holder of a prospecting right „must commence with
prospecting activities within 120 days from the date on which the prospecting
right becomes effective in terms of section 17(5) or such an extended period
as the Minister may authorise‟. As stated, s 17(5) stipulates that the effective
date is the date on which the environmental management plan is approved in
terms of s 39. That plan must be submitted to the Regional Manager within a
period of 60 days of notification to do so.12 The Minister must within 120 days
from the lodgement approve the same, provided certain requirements have
been met.13 It is plain from these provisions that a successful applicant for a
prospecting right cannot sit back, with arms folded, and remain supine on the
basis that the DDG has unlawfully imposed the BEE compliance condition and
that the Regional Manager‟s refusal to execute the right by reason of that non-
compliance was also unlawful. Those decisions remained valid until set aside
by a court.14 The appropriate course of action was for Dilokong to obtain a
mandamus compelling DMR to execute the right, that is assuming that the
right was lawfully granted.

[21] The period for which Dilokong‟s prospecting right endured must in my
view be calculated from the date on which it was informed of the granting of
the right, namely 18 July 2007. On that date Dilokong became the holder of a
valid prospecting right, subject to compliance with the request to prove BEE
compliance. It matters not, for purposes of computing the period of the
duration of the right, that the right still had to be executed and that the right
had not yet become effective. Thus construed, Dilokong‟s prospecting right

11 See fn 6 above.
12 Section 39(2) of the MPRDA, read with Regulation 52(1) of the Mineral and Petroleum
Resources Development Regulations GNR 527, GG 26275, 23 April 2004.
13 Section 39(4)(a).
14 Oudekraal Estates (Pty) Ltd v City of Cape Town & others 2004 (6) SA 222, [2004] ZASCA
48 (SCA) para 26; MEC for Health, Eastern Cape & another v Kirland Investments (Pty) Ltd
t/a Eye and Laser Institute (CCT 77/13) [2014] ZACC 6; 2014 (5) BCLR 547 (CC); 2014 (3)
SA 481 (CC) paras 64, 65 and 88.

had expired due to the effluxion of time on 17 July 2011, ie 4 years after the
date on which Dilokong had been notified of the granting of the right. The high
court thus correctly concluded that the right had lapsed due to its expiry. It
found further that the right had been lost because of Dilokong‟s unreasonable
delay in using it. In view of these findings the high court did not deem it
necessary to determine whether the right had been abandoned. While it is not
necessary to decide the point, there is substantial merit in the contentions
advanced on behalf of Mawetse that the right had in any event been
abandoned due to Dilokong‟s failure to take steps to enforce its right. It follows
that the appeal has been rendered moot.

[22] There is one last aspect which bears consideration in respect of this
second main issue. It was contended by Dilokong that we have to decide the
correctness of the decision of the Full Bench of the Northern Cape Provincial
Division in Meepo v Kotze.15 Mawetse accepted that Meepo may have been
wrongly decided but contended that we need not make a finding on that
aspect. For the reasons that follow, I am of the view that the decision in
Meepo has a direct bearing on the issue under discussion and that Meepo
was wrongly decided.

[23] The main issue in Meepo, germane to the present matter, was the
validity of a prospecting right. In order to decide the issue the court there had
to determine when exactly and as a result of whose administrative conduct
the prospecting right had been granted. It held that:
(a) No rights accrued to an applicant for a prospecting right at the time of an
approval by the DDG of a recommendation before any terms or conditions in
respect of the prospecting right, as well as the period of its validity, had been
determined.16
(b) On the facts of that case the rights and conditions and the period of validity
were only determined and communicated to the applicant at the time when
the notarial deed in respect of the prospecting right was executed.17

15 Meepo v Kotze (869/2006) [2007] ZANCHC; 2008 (1) SA 104 (NC).
16 Meepo v Kotze, supra at para 46.3.
17 Ibid.

(c) The legal nature of the granting of a prospecting right is contractual,
inasmuch as the Minister, as the representative of the State as custodian of
the mineral resources of the country, consensually agrees to grant to an
applicant a limited real right to prospect for a specified mineral on specified
land for a specific period under specific conditions. Until such terms and
conditions have been determined and consensually agreed upon or
consented to by an applicant, it cannot be said that a prospecting right has
been granted to an applicant. The right can only be granted once the terms
and conditions had been determined and communicated to an applicant for
his acceptance. That occurs when the notarial deed is executed.18
The Full Bench cited this court‟s judgment in Ondombo Beleggings (Edms)
Bpk v Minister of Mineral and Energy Affairs19 in support of the finding in (c)
above. Meepo was followed in Doe Run Exploration SA (Pty) Ltd v Minister of
Minerals and Energy20.

[24] It should be evident from what has gone before that I respectfully
disagree with these findings. As I see it, the granting of a prospecting right, as
is the case with all other rights under the MPRDA, is not contractual in nature,
but a unilateral administrative act by the Minister or her delegate in terms of
their statutory powers under the MPRDA. It occurs outside the ambit of and
regardless of the existence of a contract between the Minister and a
successful applicant. Professor Baxter refers to such an act as an
authoritative or unilateral administrative act which is performed without the
concurrence of the affected party.21 In the high court‟s decision in
Bengwenyama22, the Transvaal Provincial Divison had to consider, amongst
others, this very question, namely who granted the prospecting right in
question. Hartzenberg J held that the DDG, as the Minister‟s delegate,
granted the right and that the Regional Manager, in subsequently signing the

18 Ibid.
19 Ondombo Beleggings (Edms) Bpk v Minister of Mineral and Energy Affiars 1991 (4) SA
718 (A) at 724-725.
20 Doe Run Exploration SA (Pty) Ltd v Minister of Minerals and Energy & others [2008]
ZANCHC 3.
21L Baxter, Administrative Law 1984 at 351.
22 Bengwemnyama Minerals (Pty) Ltd & others v Genorah Resources (Pty) Ltd formerly
Tropical Paradise 427 (Pty) Ltd & others [2008] ZAGPHC 384.

notarial deed of execution, merely acted on the authority of the power of
attorney signed by the DDG in favour of the Regional Manager.23 Similarly in
Norgold Investments (Pty) Ltd v Minister of Minerals and Energy of the
Republic of South Africa24 which concerned the lodging of an application for
the conversion of prospecting rights at a particular Regional Office of the
DMR, this court also held that it is the DDG, and not the Regional Manager,
who makes the decision regarding the conversion of a prospecting right. A
submission was made in that case that since the Regional Manager had
signed the notarial prospecting right, he should be regarded as the person
who granted the conversion of an old order right to one in item 6 of Schedule
2 of the MPRDA, and not the DDG. In rejecting that submission, Navsa JA
stated that:
„The sixth respondent [the DDG] took the decision to convert and left it to the
Regional Manager Mpumalanga to implement. . .‟25
In Mustapha v Receiver of Revenue Lichtenburg and others26 Schreiner JA
described the nature of a unilateral administrative act as follows:
„In exercising the power to grant or renew, or to refuse to grant or renew, the permit,
the Minister acts as a state official and not as a private owner, who need listen to no
representations and is entitled to act as arbitrarily as he pleases. . . .‟

[25] In England statutory licenses are regarded as „public law instruments‟.
In Norweb plc v Dixon27 the Queen‟s Bench had to consider whether the
supply of public electricity by a supplier, who is under a statutory duty to do
so, to a tariff customer was based on a contractual relationship between the
parties. The court (Dyson J, McCowan LJ concurring) held that „the legal
compulsion both as to the creation of the relationship and the fixing of its
terms is inconsistent with the existence of a contract‟28 Similar conclusions

23 Paras 19-25.
24 Norgold Investments (Pty) Ltd v Minister of Minerals and Energy of the Republic of South
Africa and others [2011] ZASCA 49.
25 At para 59. See further the discussion in Dale et al, South African Mineral and Petroleum,
Law (Service issue 12, September 2012) para 133.2.3.
26 Mustapha & another v Receiver of Revenue Lichtenburg & others 1958 (3) SA 343 (A) at
347 E-F.
27 Norweb plc v Dixon [1995] 3 All ER 952.
28 At 959.

were reached in Sovmots Investments Ltd v Secretary of State for the
Environment29 and Pfizer Corporation v Ministry of Health.30

[26] The granting of a prospecting right does not admit of a legal
relationship where consensus between the parties is a legal requirement. I
disagree with the dictum in Meepo31 that an applicant for a prospecting right
has to reach consensus with the Minister or has to consent to the terms and
conditions of the right. The MPRDA sets out in no uncertain terms the
respective parties‟ rights and obligations. It is plainly an authoritative,
unilateral administrative act whereby rights are granted with or without
conditions and in terms whereof rights accrue to and obligations are imposed
upon the successful applicant.

[27] Ondombo Beleggings does not support the findings of the Full Bench
set out in para 23(c) above. It is distinguishable. That case concerned the
validity of a prospecting lease in terms of s 4(1)(b) of the (now repealed)
Precious Stones Act 73 of 1964. The Minister had refused to determine the
terms and conditions of the lease in terms of s 4(2) of the Act, despite the fact
that the lease had been granted. Eksteen JA described the nature of such a
prospecting lease as follows:
„The very wording of s 4 of the [Precious Stones] Act underlines the contractual and
therefore consensual nature of the lease. The Minister in effect binds himself to let
the leaseholder prospect on the land concerned for an agreed period of time, and the
leaseholder in turn agrees to pay a certain amount as rent. . . The fact that the Act
expressly requires certain matters to be dealt with in the lease, and in some
instances gives the Minister an overriding say in determining certain terms, does not
in my view, detract from the contractual nature of the lease.‟32
That case must be understood on its own facts and the applicable law.
Section 17 of the MPRDA differs toto caelo from s 4 of the Precious Stones
Act. As set out above, a prospecting right must be granted once there has

29 Sovmots Investments Ltd v Secretary of State for the Environment [1976] 1 ALL ER 178 at
201.
30 Pfizer Corporation v Ministry of Health [1965] 1 All ER 450 at 455.
31 Meepo v Kotze, supra para 46.3.
32 Ondombo Beleggings v Minister of Mineral and Energy Affairs (Edms) Bpk, supra, at
724D-G.

been compliance with s 17(1) – it is not dependent on the determination and
conclusion of an agreement between the Minister and an applicant on the
prospecting right‟s terms and conditions. Section 4 of the Precious Stones Act
reads as follows:
„4. Prospecting leases in respect of State land
(1) The Minister may –
(a) by notice in the Gazette and in one or more newspapers circulating in the
area in which any State land or portion of State land in respect of which
the exclusive right of prospecting for precious stones has not accrued to
any person is situated, call for tenders for a prospecting lease in respect
of precious stones over that land or that portion of such land, and grant a
prospecting lease to any person who has submitted a tender and who
satisfies the Minister that the scheme according to which he proposes to
prospect is satisfactory and either that his financial resources are
adequate for proper prospecting under such a lease or that the
arrangements by which he proposes to obtain capital for the said purpose
are satisfactory; or
(b) without calling for such tenders grant a prospecting lease in respect of
precious stones over any such land or portion thereof to any person
applying therefor who to satisfies him.
(2) Any such lease shall be subject to such terms and conditions as the Minister
may deem fit, and –
(a) shall provide for –
(i)  the scale on which and the manner in which prospecting operations
shall be carried on;
(ii)  the furnishing by the holder of the lease to the Minister at such times
as may be specified in the lease of full statements describing the nature of
the prospecting operations carried out and containing such other
information as the Minister may require;
(iii)  the keeping by the holder of the lease of such records relating to the
prospecting operation as the Minister may require;
(iv)  the examination of such records and the inspection of the lease area
by any person authorised thereto by the Minister;
(v)  the payment by the holder of the lease to any person entitled to use
the surface of the land, who suffer any surface damage or any damage to
crops or improvements on the land caused by the exercise by the holder

of the lease of his rights under the lease or by any act or omission
incidental thereto, of compensation for such damage; and
(vi)  the payment by the holder of the lease to the mining commissioner of
a rent to be fixed by the Minister after consultation with the board, . . .
(b) may provide inter alia for the payment by the holder of the lease to the
mining commissioner of such share of the proceeds of any precious
stones found by him in the course of prospecting operations on the land in
question, as the Minister may after consultation with the board determine.‟
As can be seen, once the Minister had granted a lease in terms of s 4(1), the
terms and conditions thereof had to be determined in terms of s 4(2). Section
17 of the MPRDA constitutes, as I have said, an administrative act. The
provision in s 17(6) that a prospecting right is „subject to the terms and
conditions stipulated in the right‟ does not, without more, change that
administrative act into one that is contractual in nature. The effect thereof is
simply that, in accordance with the principle of legality, the Minister may only
act within the parameters conferred upon her by the legislative provision. The
distinction between s 4 of the Precious Stones Act and S 17 of the MPRDA is
stark. For these reasons Ondombo Beleggings does not support the findings
in Meepo.

Conclusion

[28] The high court was correct in its finding that Dilokong had failed to
comply with a condition of the grant, namely BEE compliance, and that the
right had lapsed due to its expiry. The period of the duration of the right must
be computed from the date on which Dilokong had received confirmation of
the grant. The decision in Meepo that the right is granted only at the stage of
the registration of the right is wrong. It follows that the appeal must fail.

[29] The appeal is dismissed with costs, including those of two counsel.

________________________

S A Majiedt

Judge of Appeal

APPEARANCES

For Fifth Appellant:
C D A Loxton SC (with him M B L Makola)
Instructed by:

Edward Nathan Sonnenbergs Inc, Johannesburg

Webbers, Bloemfontein

For Respondent:
G Marcus SC (with him N Ferreira)
Instructed by:

Maponya Inc, Pretoria

Symington & De Kok, Bloemfontein
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE
SUPREME COURT OF APPEAL
MEDIA SUMMARY – JUDGMENT DELIVERED IN COURT OF
APPEAL
27 May 2015

STATUS: Immediate

Minister of Mineral Resources v Mawetse (SA) Mining Corporation (Pty) Ltd
(20069/14)

Please note that the media summary is intended for the benefit of the media and
does not form part of the judgment of the Supreme Court of Appeal

The Supreme Court of Appeal (the SCA) today dismissed with costs, including the
costs of two counsel, an appeal by Dilokong Chrome Mine (Pty) Ltd (Dilokong)
against a judgment of Masipa J in the Gauteng Division, Pretoria.

In that court Masipa J had granted the review application brought by Mawetse (SA)
Mining Corporation (Pty) (Mawetse) and had set aside the decision of the fourth
appellant, the Regional Manager, Limpopo Region of the Department of Mineral
Resources (the Regional Manager) who had rejected Mawetse’s application for a
prospecting right for, amongst others, chrome ore (base metals), on the farm
Driekop. Masipa J had ordered the remittal of Mawetse’s application to the third
appellant, the Deputy Director General: Mineral Development in the Department of
Mineral Resources (the DDG). In addition, that court had granted a declaratory order
that Dilokong did not hold a valid prospecting right as it had lapsed and, as a
consequence, it no longer constituted a bar to the consideration of Mawetse’s
application for a prospecting right. Lastly, that court had also dismissed Dilokong’s
counter-application in which it sought to compel the Department of Mineral
Resources (the DMR) to notarially execute the prospecting right that had been
awarded to it. The basis for the aforementioned decisions by Masipa J was that,
firstly, Dilokong had failed to comply with a suspensive condition attached to the
grant of the prospecting right (namely to be BEE-compliant in accordance with
section 2(d) of the Mineral and Petroleum Resources Development Act (the
MPRDA)) and, secondly, that even if the prospecting right had been lawfully

awarded to Dilokong, the right had been lost due to Dilokong’s unreasonable delay
in exercising it and, as a result, the right has lapsed as it has expired.

The SCA endorsed these findings. It held that the Minister had, through her
delegate, the DDG, lawfully requested Dilokong to comply with the section 2(d) BEE
requirement. It held further that BEE is an important objective, as set out in the
MPRDA and the Mining Charter and as enunciated by the Constitutional Court in a
number of cases, to redress the historical inequalities in the mining industry.
Dilokong’s failure to comply with the BEE requirement had the effect, as Masipa J
had correctly found, of barring Dilokong from implementing its right to prospect.

The SCA also agreed with Masipa J that the prospecting right has in any event
lapsed because it has expired due to the effluxion of time, in terms of section 56(a)
of the MPRDA. The SCA held that the period of the duration has to be computed
from the date when a successful applicant receives notification of the prospecting
right having been granted. In this regard the SCA overturned the decision of a Full
Bench of the Northern Cape High Court in Meepo v Kotze 2008 (1) SA 104 (NC).
The SCA held that Meepo was wrongly decided in respect of the following:
(a) That no rights accrued to an applicant for a prospecting right at the time of an
approval by the DDG of a recommendations before any terms or conditions in
respect of the prospecting right, as well as the period of its validity, had been
determined; and
(b) That the legal nature of the granting of a prospecting right is contractual,
inasmuch as the Minister, as the representative of the State as custodian of
the country’s mineral resources of the country, consensually agrees to grant
to an applicant a limited real right to prospect. The prospecting right is only
granted once the terms and conditions had been determined and
communicated to an applicant for his acceptance, which only occurs when the
notarial deed in respect of that prospecting right is executed.
With reference to South African and English authorities, the SCA explained why
Meepo v Kotze was wrongly decided in the abovementioned respects. The SCA held
that the granting of a prospecting right is not contractual in nature, but a unilateral
administrative act by the Minister or her delegate in terms of their powers under the
MPRDA. The SCA held further that a prospecting right is lawfully granted at the time
when the DDG’s decision is conveyed to a successful applicant. That must be
distinguished, said the SCA, from the other two legal processes, namely the
execution of a prospecting right (ie when it is notarially executed) and the time  when
the right comes into effect (ie when the applicant’s environmental management plan
is approved in terms of section 39 of the MPRDA).

For these reasons, the appeal was dismissed with costs, including the costs of two
counsel.

-- ends --