REPORTABLE

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Case no: 458/2011

In the matter between:

MINISTER OF MINERALS AND ENERGY

Appellant

and

AGRI SOUTH AFRICA

Respondent

CENTRE FOR APPLIED LEGAL STUDIES

Amicus Curiae

Neutral citation: Minister of Minerals and Energy v Agri SA (CALS
amicus curiae ) (458/11) [2012] ZASCA 93 (31 May
2012)
Coram:
NUGENT,
HEHER,
MHLANTLA,
LEACH
and
WALLIS JJA.
Heard:
4 May 2012
Delivered: 31 May 2012
Summary: Expropriation of mineral rights – Mineral and Petroleum
Resources Development Act 28 of 2002 (MPRDA) – expropriation of

common law mining rights – are such rights expropriated under the
provisions of the MPRDA – entitlement to compensation in terms of item
12(1) of Schedule II to the MPRDA.

ORDER

On appeal from: North Gauteng High Court, Pretoria (Du Plessis J
sitting as court of first instance).
The appeal is upheld with costs, such costs to include those
consequent upon the employment of two counsel.
The order of the court below is set aside and replaced by the
following order:
‗(a) The plaintiff‘s claim is dismissed with costs, such costs to
include those consequent upon the employment of two counsel, but
excluding all costs incurred in respect of or relating to the
amendment referred to in paragraph (b) below.
(b) The defendant is ordered to pay the plaintiff‘s wasted costs,
including the costs consequent upon the calling of witnesses and
the hearing of evidence, occasioned by its application to amend its
plea on 8 March 2011, such costs to include those consequent upon
the employment of two counsel.‘

JUDGMENT

WALLIS JA (HEHER and LEACH JJA concurring, NUGENT JA at
paragraph 102 and MHLANTLA JA concurring for different reasons.)

Introduction

[1] The transformation of the legal landscape in regard to minerals and
mining occasioned by the Minerals and Petroleum Resources
Development Act 28 of 2002 (the MPRDA) has been the subject of
previous consideration and comment by this court.1 This is a test case
aimed at determining whether the MPRDA expropriated rights that
existed prior to its coming into force. The protagonists are Agri South
Africa (Agri SA), which contends that it did, and the Minister of Minerals
and Energy (the Minister), who contends that it did not. In adopting that
stance the Minister reflects the viewpoint of the government at the time
the MPRDA was introduced in Parliament. However, that view was not
unchallenged.2 Accordingly, had a court held that the MPRDA
expropriated all or some existing rights and no provision was made for
compensation, there was a risk of the legislation being held to be
unconstitutional for non-compliance with the requirements of s 25(2)(b)
of the Constitution, which requires that any expropriation be subject to
the payment of compensation. In order to ensure constitutional

1 Holcim SA (Pty) Ltd v Prudent Investors (Pty) Ltd & others [2011] 1 All SA 364 (SCA) paras 20 to
24 and Xstrata & others v SFF Association (326/2011) [2012] ZASCA 20 para 1.
2 See for example Pieter Badenhorst and Rassie Malherbe ‗The Constitutionality of the Mineral
Development Draft Bill 2000 (Part 2)‘ 2001 TSAR 765 especially at 779 and 785.

compliance, whilst maintaining the stance that no expropriation was
involved, item 12(1) of Schedule II provides that:
‗Any person who can prove that his or her property has been expropriated in terms of
any provision of this Act may claim compensation from the State.‘ 3
The government‘s stance that the MPRDA did not expropriate existing
rights is reflected in the requirement that a person contending for an
expropriation must prove it. In that light, criticism that item 12(1) was
drafted evasively4 appears misplaced. There is nothing amiss in
government contending that the MPRDA did not expropriate existing
rights, but providing that, if they are wrong, compensation will be
payable as required by the Constitution.

[2] The factual background to this case is as follows. The MPRDA
came into force on 1 May 2004. Prior to that date Sebenza Mining (Pty)
Ltd (then called Bulgara Investment Holdings (Pty) Ltd) had taken a
notarial cession of the rights to coal in, on, under and in respect of two
properties situated in Mpumalanga (the coal rights). In 2006 the
company, by then in liquidation, lodged a claim for compensation in
terms of item 12(1) contending that the MPRDA expropriated its coal
rights. This claim was rejected. On 10 October 2006 it ceded its claim to
Agri SA, which acquired it for the purpose of bringing the present
litigation. In doing so it was acting in the broad interests of its members,
who took the view that, as a result of the changes effected by the
MPRDA, they had lost valuable mining rights. Agri SA claimed
compensation for the alleged expropriation of the coal rights in an
amount of not less than R750 000. The trial came before Du Plessis J,

3 AJ van der Walt Constitutional Property Law (3ed, 2011) 446-451 speculates about the reason for
including item 12(1) in the MPRDA but overlooks its obvious purpose. It does not impliedly recognise
that the MPRDA brings about an expropriation, and the contrary view in Agri SA v Minister of
Minerals and Energy 2010 (1) SA 104 (GNP) para 16, is incorrect.
4 M O Dale and others South African Mineral and Petroleum Law Sch II-206 (Issue 9).

who upheld the claim and awarded compensation of R750 000. The
appeal and cross-appeal are with his leave. In the appeal the Minister
seeks to set aside the compensation award in its entirety. In the cross-
appeal Agri SA seeks an increase in the compensation awarded to R2
million. At the commencement of the appeal the Centre for Applied Legal
Studies (CALS) sought and was granted leave to intervene as amicus
curiae. Broadly speaking it aligned itself with the stance of the Minister.

[3] Sebenza Mining‘s rights were restricted to the coal rights under a
notarial cession of rights from the owners of the properties in question
and the claim of which Agri SA has taken cession is a claim for
compensation in relation to those rights alone. However, counsel made it
clear in argument that Agri SA does not seek to distinguish these rights,
or the position of Sebenza Mining, from any other mineral rights that
previously existed or any other holder of such rights. It does not
distinguish between precious metals and base metals, or between these
and other forms of minerals, such as sand, stone or clay, precious stones,
other gemstones and mineral oils. Nor does it distinguish between used
and unused rights or between rights that were not separated from the land
to which they related and rights that were so separated. To illustrate the
breadth of the argument it was argued that the MPRDA effected an
expropriation of the rights enjoyed by giant mining houses just as much
as it had expropriated the unexploited mineral rights of farmers in rural
areas. It was submitted that the only reason there had not been more
claims in respect of existing mining operations was that the holders had
suffered no financial loss, because they had converted their rights in
terms of the transitional provisions in the Second Schedule to the
MPRDA to rights in terms of the MPRDA.

[4] In view of this, the outcome of the appeal turns on the answer to a
single question. Did the MPRDA expropriate all mineral rights in South
Africa? Under earlier legislation such rights were held either by the
owners of land or, where they had been separated from the land in respect
of which the rights were to be exercised, the holders of the separated
rights. Although there were differences in the form and nature of these
rights, depending on the manner in which they had been constituted, they
can for present purposes be referred to generically as mineral rights and
the beneficiaries of the rights as holders of mineral rights.

[5] The argument proceeded, and was upheld by the trial court, on the
basis of a comparison between the rights enjoyed by a holder of mineral
rights in terms of the predecessor to the MPRDA, the Minerals Act 50 of
1991 (the 1991 Act) and the position under the MPRDA. The starting
point was s 5(1) of the 1991 Act, which reads as follows:
‗Subject to the provisions of this Act, the holder of the right to any mineral in respect
of land or tailings, as the case may be, or any person who has acquired the consent of
such holder …shall have the right to enter upon such land or the land on which such
tailings are situated, as the case may be, together with such persons, plant or
equipment as may be required for purposes of prospecting or mining and to prospect
and mine for such mineral on or in such land or tailings, as the case may be, and to
dispose thereof.‘
The leading commentary on the 1991 Act said that this restored to holders
of mineral rights their common law rights in relation to prospecting for,
mining, extracting and disposing of minerals.5 The argument adopts this
terminology and contends that the rights of holders of mineral rights
under the 1991 Act were common law rights that were destroyed by the
MPRDA.

5 M Kaplan and M O Dale A Guide to the Minerals Act 1991 at 5-6. Hanri Mostert Mineral Law:
Principles and Policies 69 endorses this proposition.

[6] Agri SA contended that these rights had in substance, if not in the
same form, become vested in the government through its representative
the Minister. Whilst it was argued that an expropriation might occur
where the expropriated property is ultimately to be placed in the hands of
a third party and not the expropriator, Agri SA did not contend that
mineral rights had been expropriated by being transferred to third parties.
Its case was that an expropriation was effected by the MPRDA on 1 May
2004, when the MPRDA came into operation and that the Minister had in
substance acquired the expropriated rights. It disavowed any reliance on
the suggestion by the Minister and CALS, in their alternative arguments,
that the date of any expropriation would have been later and would have
diverged from case to case, because any expropriation would only occur
when existing miners or new entrants to the industry were awarded a
prospecting right or a mining right or mining permit under the MPRDA in
place of the previous holder of the mineral rights to that property. We can
confine ourselves therefore to a consideration of the narrow proposition
that the MPRDA effected an expropriation of all existing mining rights in
South Africa on 1 May 2004.

[7] In its particulars of claim Agri SA said that the expropriation was
effected by s 5, read with ss 2, 3 and 4, of the MPRDA. In further
particulars for trial it inverted this by relying primarily on s 3 and only
then and by way of supplement on the other provisions. As the question is
one of law this change is of no great moment. The outcome of this
litigation depends upon broad principles relating to the source and nature
of mineral rights and the construction of the relevant provisions of the
MPRDA in the context of the statute as a whole and in the light of the

Constitution. The precise form in which the argument has been couched
from time to time does not affect this.

[8] The relevant provisions of the MPRDA start with the preamble
where it is acknowledged that ‗South Africa‘s mineral and petroleum
resources belong to the nation and that the State is the custodian thereof‘.
The relevant objects in s 2 are said to be to:
‗(a)
recognise the internationally accepted right of the State to exercise sovereignty
over all the mineral and petroleum resources within the Republic;
(b)
give effect to the principle of the State‘s custodianship of the nation‘s mineral
and petroleum resources;
(c)
promote equitable access to the nation‘s mineral and petroleum resources to
all the people of South Africa;
(d) to (f)
…
(g)
provide for security of tenure in respect of prospecting, exploration, mining
and production operations.‘
The role of the State in this new dispensation is set out in s 3, which
provides that:
‗(1)  Mineral and petroleum resources are the common heritage of all the people of
South Africa and the State is the custodian thereof for the benefit of all South
Africans.
(2)  As the custodian of the nation‘s mineral and petroleum resources, the State, acting
through the Minister, may—
(a)
grant, issue, refuse, control, administer and manage any reconnaissance
permission, prospecting right, permission to remove, mining right, mining permit,
retention permit, technical co-operation permit, reconnaissance permit, exploration
right and production right; and
(b)
in consultation with the Minister of Finance, determine and levy, any fee or
consideration payable in terms of any relevant Act of Parliament.‘

[9] Section 5 deals with the nature and consequences of the rights
created under the MPRDA. It provides that:

‗(1)  A prospecting right, mining right, exploration right or production right granted in
terms of this Act is a limited real right in respect of the mineral or petroleum and the
land to which such right relates.
(2)  The holder of a prospecting right, mining right, exploration right or production
right is entitled to the rights referred to in this section and such other rights as may be
granted to, acquired by or conferred upon such holder under this Act or any other law.
(3)  Subject to this Act, any holder of a prospecting right, a mining right, exploration
right or production right may—
(a)
enter the land to which such right relates together with his or her employees,
and may bring onto that land any plant, machinery or equipment and build, construct
or lay down any surface, underground or under sea infrastructure which may be
required for the purposes of prospecting, mining, exploration or production, as the
case may be;
(b)
prospect, mine, explore or produce, as the case may be, for his or her own
account on or under that land for the mineral or petroleum for which such right has
been granted;
(c)
remove and dispose of any such mineral found during the course of
prospecting, mining, exploration or production, as the case may be;
(d)
subject to the National Water Act, 1998 (Act No. 36 of 1998), use water from
any natural spring, lake, river or stream, situated on, or flowing through, such land or
from any excavation previously made and used for prospecting, mining, exploration
or production purposes, or sink a well or borehole required for use relating to
prospecting, mining, exploration or production on such land; and
(e)
carry out any other activity incidental to prospecting, mining, exploration or
production operations, which activity does not contravene the provisions of this Act.
(4)  No person may prospect for or remove, mine, conduct technical co-operation
operations, reconnaissance operations, explore for and produce any mineral or
petroleum or commence with any work incidental thereto on any area without—
(a)
an
approved
environmental
management
programme
or
approved
environmental management plan, as the case may be;
(b)
a reconnaissance permission, prospecting right, permission to remove, mining
right, mining permit, retention permit, technical co-operation permit, reconnaissance
permit, exploration right or production right, as the case may be; and

(c)
notifying and consulting with the landowner or lawful occupier of the land in
question.‘

[10] It is plain from these provisions that anyone who wishes to
prospect for or mine minerals in South Africa may only do so in terms of
rights acquired and held under the MPRDA. The rights of holders of
mineral rights reflected in s 5(1) of the 1991 Act have, as such,
disappeared. Whilst those who held such rights under the 1991 Act, and
persons authorised by them, were formerly the only persons who could,
subject to the 1991 Act, prospect and mine, and accordingly enjoyed
exclusivity, that is no longer the case. They are free to compete with
others for rights under the MPRDA, but their status as holders of mineral
rights, recognised in the past, is of no relevance to whether they will be
afforded such rights in the current dispensation. In addition, the owners of
land, from which the mineral rights have not been separated, can no
longer prevent others from coming onto their land for the purpose of
mining. All they have is a right under s 5(4)(c) of the MPRDA6 to be
notified and consulted before others, acting in terms of rights afforded to
them by the Minister under the MPRDA, come onto their land to prospect
or mine. There are no longer any rights that can be put up for sale, used as
security or bequeathed to one‘s heirs. That broadly constitutes the
deprivation of which Agri SA complains.

[11] Against that background the appeal raises three issues. They are:
(a)
What constitutes an expropriation in terms of s 25(2) of the
Constitution?

6 Subject to the dispute resolution provisions in s 54 of the MPRDA and the possibility that some
compensation may be paid to them, either as agreed or as determined by arbitration or a competent
court.

(b)
What were the rights enjoyed by holders of mineral rights prior to
the MPRDA coming into operation?
(c)
Were those rights expropriated in terms of the provisions of the
MPRDA?
If the last of these questions is answered in favour of Agri SA then it
follows that Sebenza Mining‘s coal rights were expropriated and we must
then consider the proper assessment of the compensation due to it.

The meaning of ‗expropriation‘

[12] The Constitution draws a distinction between a deprivation of
property and an expropriation.7 A deprivation of property is only
constitutionally compliant if it occurs in terms of a law of general
application and is not arbitrary. An expropriation is a special type of
deprivation. It must, like any other deprivation, take place in terms of a
law of general application and not be arbitrary. In addition it must be for
a public purpose or in the public interest and the expropriation must be
subject to the payment of compensation. Agri SA contends that the
MPRDA expropriated all pre-existing mineral rights. It did not contend
that the MPRDA involved an arbitrary deprivation of all or some of those
rights. There would be difficulties in advancing such an argument in the
light of the constitutional imperatives of transformation and accessibility
to natural resources to which CALS drew our attention. If we conclude
that the MPRDA did not expropriate pre-existing mineral rights the
appeal must succeed.

7 Sections 25(1) and (2) embodying this distinction read as follows:
‗(1)  No one may be deprived of property except in terms of law of general application, and no law may
permit arbitrary deprivation of property.
(2)  Property may be expropriated only in terms of law of general application—
(a)  for a public purpose or in the public interest; and
(b)  subject to compensation, the amount of which and the time and manner of payment of which have
either been agreed to by those affected or decided or approved by a court.‘

[13] As item 12(1) was directed at ensuring the constitutional
compliance of the MPRDA if it expropriated property, the ‗expropriation‘
to which it refers must be an expropriation as contemplated by s 25(2) of
the Constitution. In Harksen v Lane NO & others8 Goldstone J said:
‗[31] The word ―expropriate‖ is generally used in our law to describe the process
whereby a public authority takes property (usually immovable) for a public purpose
and usually against payment of compensation. Whilst expropriation constitutes a form
of deprivation of property, s 28 makes a distinction between deprivation of rights in
property, on the one hand (ss (2)), and expropriation of rights in property, on the other
(ss (3)). Section 28(2) states that no deprivation of rights in property is permitted
otherwise than in accordance with a law. Section 28(3) sets out further requirements
which need to be met for expropriation, namely that the expropriation must be for a
public purpose and against payment of compensation.
[32] The distinction between expropriation (or compulsory acquisition as it is called
in some other foreign jurisdictions) which involves acquisition of rights in property by
a public authority for a public purpose and the deprivation of rights in property which
fall short of compulsory acquisition has long been recognised in our law. In
Beckenstrater v Sand River Irrigation Board,9 Trollip J said:
―(T)he ordinary meaning of 'expropriate‘' is ‗to dispossess of ownership, to deprive of
property‘ … but in statutory provisions, like secs 60 and 94 of the Water Act, it is
generally used in a wider sense as meaning not only dispossession or deprivation but
also appropriation by the expropriator of the particular right, and abatement or
extinction, as the case may be, of any other existing right held by another which is
inconsistent with the appropriated right. That is the effect of cases like Stellenbosch
Divisional Council v Shapiro 1953 (3) SA 418 (C) at 422-3, 424; SAR & H v
Registrar of Deeds 1919 NPD 66; Kent NO v SAR & H 1946 AD 398 at 405-6; and
Minister van Waterwese v Mostert and Others 1964 (2) SA 656 (A) at 666-7.‖‘

8 Harksen v Lane NO & others 1998 (1) SA 300 (CC) paras 31 and 32.
9 1964 (4) SA 510 (T) at 515A-C.

[14] It has been suggested10 that the Constitutional Court departed from
this approach in the FNB case.11 The basis for that suggestion is that in
FNB the court commenced by dealing with deprivation of property and
whether it was arbitrary, whilst in Harksen it dealt directly with
expropriation. It would be surprising to conclude that FNB departed from
Harksen without saying so expressly, given their proximity in time and
that Harksen is not even referred to in the judgment in FNB. What is
more Ackerman J, who wrote FNB, had concurred in Harksen. The
differences in approach between the two are readily ascribable to the fact
that they were concerned with different questions. Harksen dealt with a
contention that s 21 of the Insolvency Act 24 of 1936, which provides for
the vesting of the property of one party to a marriage in the trustee of
their insolvent spouse, pending proof by the solvent spouse of ownership
of the assets in question, constituted an expropriation contrary to s 25(2)
of the Constitution. FNB concerned whether the provisions of s 114 of the
Customs and Excise Act 91 of 1964, providing for a lien for payment of a
customs debt over all goods, including those of third parties, on any
premises in possession or under control of the customs debtor, constituted
an arbitrary deprivation of property.12 Both judgments accept that
expropriation is a form13 or subset14 of deprivation. Accordingly, whether
a challenge is mounted under s 25(1) or s 25(2) the first issue will be
whether there has been a deprivation of property. But that does not
necessarily mean that the court must consider whether the particular
deprivation of property was arbitrary, when the only point in issue in the

10 A J van der Walt ‗Striving for the better interpretation – a critical reflection on the Constitutional
Court‘s Harksen and FNB decisions on the Property Clause‘ (2004) 121 SALJ 854 at 869-870; Van der
Walt , supra, fn 3 at 341 to 347.
11 First National Bank of SA Ltd t/a Wesbank v Commissioner, South African Revenue Service &
another: First National Bank of SA Ltd t/a Wesbank v Minister of Finance 2002 (4) SA 768 (CC)
12 It appears that FNB argued that this was a prohibited expropriation (see para 26 of the judgment), but
the case was disposed of on the grounds that the section involved an arbitrary deprivation of property.
13 Harksen para 31.
14 FNB para 57.

case is whether an expropriation has occurred.  If the person contending
for an expropriation is content not to allege that the deprivation is
arbitrary, there is no reason for the court to enquire into that question. Its
view on that would be obiter and it is a salutary approach, if possible, in
writing judgments to avoid obiter dicta. Where the issue is whether an
expropriation has occurred, the important question will be whether the
deprivation reflects those characteristics that serve to mark out an
expropriation from other types of deprivation of property.15 In identifying
those characteristics FNB said merely that we must be circumspect in
relying on pre-constitutional jurisprudence16 concerning expropriation,
because it may not necessarily be reliable in construing the property
clause under our present constitutional dispensation.17

[15] The
MPRDA
exhibits
strong
regulatory
features.
Other
jurisdictions have grappled with cases dealing with the effect that
regulatory measures, such as planning regulations, may have on existing
property rights. This has resulted in the development in some
jurisdictions of doctrines of constructive expropriation or inverse
condemnation. In Steinberg v South Peninsula Municipality18 this court
left open the question whether there is room within our constitutional
framework for the development of a concept of constructive
expropriation. In Reflect-All 1025 CC & others v MEC for Public
Transport, Roads and Works, Gauteng Provincial Government, &
another19 Nkabinde J likewise left the question open, saying only that she

15 It is accepted in the present case that the MPRDA is an Act of general application; that it was passed
for a public purpose and that it provides for compensation if it brings about an expropriation.
16 I use the term to encompass both case law and academic writing on the topic.
17 FNB para 59.
18 Steinberg v South Peninsula Municipality 2001 (4) SA 1243 (SCA) para 8.
19 Reflect-All 1025 CC & others v MEC for Public Transport, Roads and Works, Gauteng Provincial
Government,& another 2009 (6) SA 391 (CC) paras 65 and 66. Elmarie van der Schyff in her doctoral
dissertation The Constitutionality of the Mineral and Petroleum Resources Development Act 28 of 2002

was uncertain whether it was an appropriate doctrine in the South African
context and that it gives rise to debatable questions. We have not been
asked to develop such a doctrine in the present case. Agri SA contends
that the MPRDA effects a direct expropriation of previously existing
mineral rights by taking those rights from existing rights holders and
vesting their substance in the Minister. It is accordingly unnecessary to
address this complex question. It is also unnecessary to address an issue
raised by Professor van der Walt20 whether an expropriation can be
effected by statute in South Africa. No-one suggested that it could not be
effected in this way.

[16] The primary contention of the Minister and CALS is that the
MPRDA did not effect a general expropriation of existing mineral rights
because the State did not acquire any rights in consequence of the
MPRDA coming into operation. They accepted, although the correctness
of this acceptance will be revisited later in the judgment, that there was a
deprivation of property because all mineral rights under the 1991 Act
were extinguished by the MPRDA. However, they say that those rights
have not been acquired by the State and, as this is a necessary
characteristic of an expropriation that is fatal to Agri SA‘s claim.
Reliance is placed upon the quoted passage from Harksen and the
Reflect-All judgment, in which the contention that there had been an
expropriation of property, effected by the long-standing designation of
portions of the appellants‘ properties for road purposes, was rejected
because there had been no acquisition of the land affected by the
designation. The relevant passage from that judgment reads as follows:

at 164-177 proposes the adoption of a form of constructive expropriation. Professor van der Walt, fn 3,
supra, 347-384 rejects the doctrine.
20 Footnote 3, supra, 433-4 and 456-8, where he concludes erroneously that item 12(1) ‗amounts to
some form of statutory expropriation‘, a proposition not advanced by Agri SA.

‗[64] The applicants argued that s 10(3) is inconsistent with the constitutional
guarantee against uncompensated expropriation of property. I do not agree. Although
it is trite that the Constitution and its attendant reform legislation must be interpreted
purposively, courts should be cautious not to extend the meaning of expropriation to
situations where the deprivation does not have the effect of the property being
acquired by the State.21 It must be emphasised that s 10(3) does not transfer rights to
the State. What it does is this: it deprives the landowner of rights to exploit the
affected part of the land within the road reserve and thus protects part of the planning
process which has economic value and is in the long run in the public interest.
Remarkably, while the applicants accepted the distinction drawn by the court in
Harksen, they nevertheless contended that s 10(3), read with ss 8 and 9 of the
Infrastructure Act, enables the State to ―acquire‖ land for the construction of public
roads. As I have said, the State has not acquired the applicants' land as envisaged in
ss 25(2) and 25(3) of the Constitution. For that reason, no compensation need be
paid.‘ (Emphasis added.)

[17] Agri SA counters this argument in the following way. It contends
that expropriation is an original, not a derivative form of acquisition of
ownership. It does not involve a transfer from the expropriatee to the
expropriator, but the extinguishing of the expropriatee‘s title or right and
the acquisition by the expropriator, or possibly a third party through the
expropriator, of a new right, equivalent or similar, but not necessarily
identical, to that previously enjoyed by the expropriatee. Accordingly, so
it is argued, the issue of expropriation in this case cannot be determined
by asking whether, in consequence of the MPRDA, the State has acquired
the mineral rights that existed under the old dispensation. As those rights

21 This should not be read as if it were a statute prescribing that acquisition must be by the State in
order for there to be an expropriation. In that case the only possible beneficiary of any ‗acquisition‘
would have been the State and this dictated the language used by Nkabinde J. In Offit Farming
Enterprises (Pty) Ltd & another v Coega Development Corporation & others 2010 (4) SA 242 (SCA)
paras 14 to 18 this court held that the Constitution permitted an expropriation in the public interest even
though the party ultimately acquiring the expropriated property was someone other than the
expropriating authority. That finding was not challenged or questioned in the subsequent appeal to the
Constitutional Court. Offit Enterprises (Pty) Ltd & another v Coega Development Corporation &
others 2011 (1) SA 293 (CC).

have been extinguished the answer to that question must necessarily be in
the negative. Instead, it is contended that the proper question is whether
the scheme for the regulation of mining in South Africa, contained in
sections 2 to 5 of the MPRDA, vested in the State the substantive content
of those rights, transferring the right to prospect, mine for and dispose of
extracted minerals from the holders of mineral rights to the Minister.
Agri SA says that the MPRDA divested owners of existing mining rights
and granted ‗a corresponding power, right or advantage to the
expropriator in order to grant a similar right to a third party‘ and that this
amounted to an expropriation. It contends that the court must look behind
the appearance of the exercise of a regulatory power to the underlying
reality that as a result of the MPRDA the rights enjoyed by holders of
mining rights prior to the MPRDA have been extinguished and are now
exercisable by the Minister and those to whom rights are granted under
the MPRDA.

[18] Both arguments proceed on the footing that one of the identifying
characteristics of an expropriation is that the expropriator acquires
property (in its constitutional sense) either for itself or for others, whether
directly or indirectly, that bears some resemblance to the property that
was the subject of the expropriation. That is consistent with the decision
in Harksen and is in my view correct. I find unconvincing the suggestion
by Professor van der Walt22 that, in terms of the Constitution, the
characteristic that distinguishes an expropriation from other forms of
deprivation is compensation. That puts the cart of compensation before
the horse of expropriation. The need to identify whether a particular act
constitutes an expropriation will arise in two circumstances. The first is
where the validity of a law or some executive or administrative action is

22 Footnote 3, supra, pp 343-4.

challenged on the ground that it involves an expropriation but does not
provide for the payment of compensation, thereby infringing s 25(2) of
the Constitution. The second is where, as in this case, there is provision
for the payment of compensation if a law or action constitutes an
expropriation, but there is a dispute whether the particular law or action
involves an expropriation. In either event the presence or absence of a
provision for compensation cannot be determinative of whether there is
an expropriation. If one looks as the structure of s 25(2) of the
Constitution it is more appropriate to view compensation as a pre-
requisite for a lawful expropriation and a necessary consequence of an
expropriation, rather than as a defining characteristic serving to
distinguish expropriations from other forms of deprivation. The absence
of an obligation to pay compensation is necessarily neutral, whilst its
presence can never be more than a factor that may point to an
expropriation.

[19] Accepting that one of the hallmarks of expropriation is that the
expropriator or others through it acquire property, Agri SA says that what
is acquired need not be the same or substantially the same as what has
been taken. For obvious reasons this is a contention that can only be
advanced when the subject of the alleged expropriation is incorporeal
property.  Even in that context there is room for considerable debate
whether the argument is correct. In Minister van Waterwese v Mostert &
andere23 it was said that the person who expropriates only acquires, by
means of the expropriation, the rights that have been expropriated.24
Reference is made by counsel for Agri SA to a passage from the

23 Minister van Waterwese v Mostert & andere 1964 (2) SA 656 (A) at 667A-B.
24 Van Wyk JA said: ‗… in die afwesigheid van ŉ regsfiksie, kan van niemand meer onteien word as
wat hy eien nie‘ and ‗… die persoon wat onteien slegs die regte wat onteien is deur die onteiening kan
verkry‘.

judgment of van Winsen J in Stellenbosch Divisional Council v
Shapiro,25 where it was said that if property burdened by a
fideicommissum is expropriated the burden falls away with the
expropriation. However, it is by no means clear that this supports the
principle for which counsel contends. The case26 van Winsen J relied on
for this observation, involved a dispute over the entitlement of the local
authority
to
expropriate
immovable
property
burdened
by
a
fideicommissum where the ultimate beneficiaries of the fideicommissum
were not yet in existence. The court decided that expropriation was
permissible on the basis that the fideicommissum remained in existence
after expropriation but burdened the compensation rather than the
property.27 It is not authority for the proposition that what is acquired by
expropriation can be greater than what was taken, nor is it authority for
the proposition that what is acquired can be different from what was
taken.

[20] There is support for the contentions of the Minister in four cases,
two from Zimbabwe28 and two judgments of the Privy Council on appeal
from Malaysia29 and Mauritius30 respectively. In each the claim for
compensation failed on the basis that, whilst the rights of the claimants
had either been extinguished or significantly diminished and the
government in each case had significantly extended its rights and powers,
the claimants had failed to show that any rights previously possessed by
them had been acquired by the government. That strict approach to the

25 Stellenbosch Divisional Council v Shapiro 1953 (3) SA 418 (C) at 423H-424A.
26 The Town Council of Cape Town v Hiddingh’s Executors (1894) 11 SC 146.
27 A principle embodied in s 12 of the Expropriation Act 55 of 1965. See Estate Marks v Pretoria City
Council 1969 (3) SA 227 (A) at 243A-D.
28 Hewlett v Minister of Finance 1982 (1) SA 490 (ZS) at 501H-507G; Davies & others v Minister of
Lands, Agriculture and Water Development 1997 (1) SA 228 (ZSC) at 232F-235I.
29 Government of Malaysia v Selangor Pilot Association [1978] AC 337 (PC).
30 Société United Docks & others v Government of Mauritius: Marine Workers Union & others v
Mauritius Marine Authority & others [1985] 1 All ER 864 (PC) at 870c-d.

concept of an acquisition flowing from an expropriation supports the
contention by the Minister and CALS.

[21] However there is a different line of cases reflecting a different
approach to this problem. In Australia in Mutual Pools & Staff Pty Ltd v
The Commonwealth31 Deane and Gaudron JJ said:
‗The extinguishment, modification or deprivation of rights in relation to property does
not of itself constitute an acquisition of property … For there to be an ―acquisition of
property‖, there must be an obtaining of at least some identifiable benefit or
advantage relating to the ownership or use of property. On the other hand, it is
possible to envisage circumstances in which an extinguishment, modification or
deprivation of the proprietary rights of one person would involve an acquisition of
property by another by reason of some identifiable and measurable countervailing
benefit or advantage accruing to that other person as a result.‘
In Georgiadis v Australian and
Overseas Telecommunications
Corporation32 it was held that there is no reason why what is acquired
should correspond precisely to what has been taken. A case that illustrates
this possibility is the Canadian case of Manitoba Fisheries Ltd v The
Queen,33 where a commercial monopoly in relation to the export of
freshwater fish from Canada was granted to a statutorily created Crown
corporation, which could in turn grant licences to private businesses. The
claimant had not been granted such a licence and as a result its existing
profitable business could no longer be pursued. Whilst provision was
made for provinces to compensate businesses for their redundant plant
and equipment Manitoba had not done so. The Supreme Court of Canada
held that the effect of creating the statutory monopoly was that the Crown
corporation acquired the goodwill of the claimant‘s existing business and

31 Mutual Pools & Staff Pty Ltd v The Commonwealth [1994] HCA 9; (1994) 179 CLR 155 at 185.
32 Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297
(HCA) at 304-5.
33 Manitoba Fisheries Ltd v The Queen 88 DLR (3d) 462.

had thereby ‗taken‘ its business. A similar conclusion was reached in the
case of Ulster Transport Authority v James Brown & Sons Ltd,34 namely
that the repeal of a statutory exemption which had allowed the company
to trade in competition with a government established board providing the
same services, was ‗a device for diverting a definite part of the business
of furniture removers and storage from the respondents and others to the
appellant‘ and was intended ‗to enable the appellants to capture the …
business‘.

[22] Lastly, in this survey of the problems that arise in determining
whether an expropriation has resulted in an acquisition of property by the
expropriating authority, there is the Australian case of Newcrest Mining
(WA) Ltd & another v The Commonwealth of Australia & another. 35 It is
a case that may have a particular resonance in the present one in that it
involved rights conferred by the Commonwealth, all rights to minerals
having been reserved to the Crown, under mining leases with commercial
entities. The areas covered by the leases were then incorporated into a
world heritage site, the Kakadu National Park, where there was a
statutory prohibition on the recovery of minerals. There was also an
express statutory provision that provided that no compensation would be
payable if rights were lost in consequence of the incorporation of
property into a conservation area, such as Kakadu. This rendered the
rights under the mineral leases valueless because they could not be
exploited. The majority of the court held that there was an acquisition by
the Commonwealth because the effect of the sterilisation of the lessee‘s
rights was to enhance the value of the government‘s holdings. However,
in dissent McHugh J pointed out that the Commonwealth gained nothing

34 Ulster Transport Authority v James Brown & Sons Ltd [1953] NI 79 at 113 and 116.
35 Newcrest Mining (WA) Ltd & another v The Commonwealth of Australia & another (1997) 190 CLR
513 (HCA).

thereby. It was not enabled to exploit the minerals and had the prohibition
been lifted the claimant could have exploited them under the mineral
leases. He accordingly held that there was no acquisition.

[23] These are complex and difficult questions. The approach that
requires almost complete correspondence between what is taken from the
expropriatee and the benefit or advantage accruing to the expropriator
appears simple, but it ignores the reality that deprivations of property can
take a variety of forms36 and be effected in various different ways. The
resultant advantage to the authority that effects the deprivation may also
take a variety of forms. An unduly literal concept of acquisition flowing
from a deprivation may mean that the concept of expropriation is too
narrow and fails to afford the protection to property rights that s 25(2) is
designed to afford. A broader and more generous concept of acquisition
may also go some way towards addressing the problems that caused this
court in Steinberg to pose the question whether there is scope under the
Constitution for a concept of constructive expropriation. On the other
hand an overly generous approach to the notion of acquisition runs the
risk of reducing it to something akin to the peppercorn that in the English
common law system suffices to provide the requisite consideration for a
binding contract. That would blur the distinction our Constitution draws
between expropriations and other forms of deprivation of property. It may
also create barriers to the constitutionally mandated process of
transformation in regard particularly to access to land and natural
resources, where s 25 has sought to strike a careful balance between
existing property rights and the achievement of transformation.

36 Mkontwana v Nelson Mandela Metropolitan Municipality & another; Bisset & others v Buffalo City
Municipality & others; Transfer Rights Action Campaign & others v MEC, Local Government and
Housing, Gauteng, &others (KwaZulu-Natal Law Society and Msunduzi Municipality as Amici Curiae)
2005 (1) SA 530 (CC) paras 87-91.

[24] In view of these difficulties it is undesirable to adopt a categorical
approach to understanding what constitutes acquisition for the purposes
of expropriation. I accept that acquisition by or through the expropriating
authority is a characteristic of an expropriation in terms of s 25(2).
However, it is preferable to determine what constitutes an acquisition for
the purpose of identifying an expropriation on a case by case basis having
regard to the particular form that any alleged expropriation takes, the
nature of the property alleged to have been expropriated and the content
of the rights allegedly acquired by the expropriator. This is of particular
importance when one is dealing with an alleged expropriation of
incorporeal property, effected by way of changes made in a regulatory
environment. In that situation it will be as important to examine the
substance of the right as its source, especially where there is a need for
continuity of operations in the industry under consideration and the
changes include transitional measures. That in turn may affect whether
there has been a deprivation or the nature of any deprivation. In order to
decide both the question of deprivation and the question of acquisition in
the present case it is accordingly first necessary to consider the nature of
the mineral rights that Agri SA says have been expropriated.

The nature of mineral rights

[25] In accordance with long-standing usage mineral rights are referred
to as common law rights. Indeed they are so described in a leading
judgment of this court in Trojan Exploration Co (Pty) Ltd v Rustenburg
Platinum Mines Ltd & others,37 where the court was faced with a conflict

37 Trojan Exploration Co (Pty) Ltd v Rustenburg Platinum Mines Ltd & others 1996 (4) SA 499 (A) at
510A.

between two rights holders, the one holding the right to mine precious
metals over the property and the other the right to mine all other minerals.
They were so described, without further analysis, in the trial court‘s
judgment and in the arguments of counsel both in that court and in this
court. However, it is instructive to examine more closely and in its
entirety the relevant passage from the judgment of Schutz JA, which,
notwithstanding the division of views as to the outcome of the case, was
accepted by all his colleagues. It reads:
‗A brief account of the genesis of the various rights, their nature and subsequent fate,
is needed because of certain arguments which will be considered later. Prior to 1925
the Transvaal Land Co Ltd owned Umkoanesstad, its surface and what was beneath it,
in all the fullness that the common law allows, although even by then for about half a
century there had been legislation which could affect its rights if payable minerals
were present. In that year Willem Remmers acquired the farm, but simultaneously the
mineral rights were separated and retained by Transvaal Land Co Ltd by means of a
reservation in the transfer deed and the registration of a certificate of mineral rights in
its favour. Those rights were defined as ―all the mineral rights and all minerals, oil,
precious stones, precious or base minerals‖. Such a separate registration of mineral
rights had come to be recognised in the Transvaal long before 1925: see Houtpoort
Mining and Estate Syndicate Ltd v Jacobs 1904 TS 105 at 110; also Nolte v
Johannesburg Consolidated Investment Co Ltd 1943 AD 295 at 315.
Indeed an entire structure of mineral and mining law had been evolved in South
Africa both by the Courts and various legislatures. The need for such development
arose out of the lack of such laws in the Roman-Dutch system. …
The nature of rights to minerals which had been separated from the ownership of the
land, as they had developed in South Africa, was described by Innes CJ in Van Vuren
and Others v Registrar of Deeds 1907 TS 289 at 294 as being the entitlement ―to go
upon the property to which they relate to search for minerals, and, if he (the holder)
finds any, to sever them and carry them away‖. As these rights could not be fitted into
the traditional classification of servitudes with exactness - they were not praedial as
they were in favour of a person, not a dominant property - they were not personal as
they were freely transferable - they had to be given another name, and the Chief

Justice dubbed them quasi-servitudes, a label that has stuck. They are real rights.
Their exercise may conflict with the interests of the landowner. In a case of
irreconcilable conflict the interests of the latter are subordinated, for if it were
otherwise the grant of mineral rights might be deprived of content: see eg Nolte's case
supra at 315: Hudson v Mann and Another 1950 (4) SA 485 (T) at 488E-F. For so
long as minerals remain in the ground they continue to be the property of the
landowner: only when the holder of the right to minerals severs them do they become
movables owned by him: Van Vuren's case supra at 295. Those are the main
established common-law principles that are relevant.‘38

[26] From this we see that what have come to be referred to as common
law rights emerged from the combined work of the courts and various
legislatures over the many years in which mining has been a significant
activity in South Africa.  As Schutz JA expressed it ‗an entire structure of
mineral and mining law had been evolved in South Africa both by the
Courts and various legislatures‘. That accords with the view of Lord
Sumner in the Privy Council in Union of South Africa (Minister of
Railways and Harbours) v Simmer and Jack Proprietary Mines Ltd,39
where in dealing with the nature of mynpacht rights he said:
‗Mynpacht rights are sui generis and are the creature of statutes, which have conferred
on the State the right to dispose of precious metals and invest the State‘s grantees with
the right to win and get them, the ownership right of the dominium notwithstanding.‘
It has been convenient down the years to describe the system of mining
law as giving rise to common law mineral rights, but that nomenclature
was probably adopted because of the role the courts played in
characterising such rights. Hitherto it has been unnecessary to explore the
underpinnings of the system and untangle its roots with a view to
discerning the source and nature of these rights and whether they are in

38 At 509A-510A.
39 Union of South Africa (Minister of Railways and Harbours) v Simmer and Jack Proprietary Mines
Ltd [1918] AC 591 at 600.

fact derived from the common law. That exercise must be undertaken in
the present case because it is those rights that Agri SA contends were
expropriated by the MPRDA.

[27] Section 5(1) of the 1991 Act, which provides the foundation for the
argument on behalf of Agri SA, conferred the right to enter upon the land,
to prospect and mine for minerals and to dispose of those that were
extracted upon holders of mineral rights. These are collectively referred
to as the right to mine. A number of subsidiary rights or entitlements flow
from the right to mine, particularly as between prospectors and miners on
the one hand and property owners on the other. Together with the right to
mine they constitute what were referred to as common law mineral rights.
The holders of mineral rights could deal with them by, for example,
selling them or bequeathing them to an heir, or could sterilise them by
debarring others from coming upon the land to engage in prospecting or
mining activities. The latter could be important to a farmer who wished to
prevent any disruption of the surface of the land in order to pursue
farming activities without interference. There is land that is valuable
farming land under which rich mineral deposits are to be found. Where
the owner held the mineral rights they were able to determine whether
farming or mining would take place.

[28] The concept of mineral rights is founded on the right to mine.
Does the right to mine have its source in the common law as Agri SA
claims? In order to answer this question it is necessary to delve into the
history of our mining law and the evolution of mineral rights. In
undertaking that task it is right that I confess my debt in particular to
Professor M O Dale and his doctoral thesis An Historical and
Comparative Study of the Concept and Acquisition of Mineral Rights

(hereafter Dale) and Dr L V Kaplan‘s thesis The development of various
aspects of the gold mining laws in South Africa from 1871 until 1967
(hereafter Kaplan).40 Much of what follows is derived from these sources
and from a consideration of the statutes to which they refer.41 For reasons
that will emerge the consideration of these issues will be divided into
different periods.

The common law

[29] Whilst there is little writing in Roman Law on the topic of mineral
rights Professor Dale says42 that there was a clear tendency to move away
from unrestricted ownership of minerals to a restricted ownership of land
on which minerals were found. This was linked to an appropriation by the
State of the authority to determine who would enjoy the right to mine,
initially in respect of public land and then in relation to private land. He
notes that:
‗This restriction of the landowner‘s full dominium in favour of freedom to mine, is a
tendency which, while founded in Rome, is discernible in almost all legal systems,
and is possibly attributable to the fact that the mining industry is generally of such
national importance that it is allowed to take precedence over the interests of the
individual landowner.‘

40 I have also derived much assistance from the extensive writings in various journals of Professors P J
Badenhorst and H Mostert; from the historical overview in B L S Franklin and M Kaplan Mining and
Mineral Laws of South Africa 1-21 and from Professor Badenhorst‘s doctoral thesis Die Juridiese
Bevoegdheid om Minerale te Ontgin in die Suid-Afrikaanse Reg. In the latter at p 3, fn 5 he makes the
point that it is unclear whether mining rights as separate real rights were known to the common law and
therefore adopts the expression ‗tradisionele mineraalreg‘ in preference to ‗gemeenregtelike
mineraalreg‘.
41 After the hearing of the appeal and the preparation and circulation of the draft of this judgment, we
were furnished with proof copies of Professor Hanri Mostert‘s book referred to in fn 4 supra. In large
measure it is based on an analysis of the origins of mineral rights that is similar to the one in this
judgment. It has provided a useful check on the conclusions reached in the judgment in regard to the
historical analysis, although my conclusions in regard to the right to mine go further than hers and are
not dependent upon characterising the critical provisions of mining legislation as regulatory.
42 Dale at 3.

In Roman times various devices were used by the State to exercise
authority over the right to mine. These included permits and
authorisations and the requirement to pay royalties in return for the grant
of a right to mine. In devising this system whilst ‗the right to mine … was
strictly under State Control‘ the interests of the State, the miner and the
landowner were balanced and protected. This approach was not unique to
the Romans. His conclusion is that:
‗The development in Roman Law from private ownership of the right to mine on
one‘s own land, to the control of the mining industry and the right to mine by the
State, is one which is not singular to the Romans, but is traceable in the systems of
most countries.‘43

[30] That view is shared by Professor Barton, who testified on behalf of
the Minister. He pointed out that absolute private ownership of minerals,
carrying with it a right to exploit those minerals is rare. According to him,
and this does not appear to have been disputed, there are two major
variations. Under the one (the Dominial system) the State is said to own
the minerals irrespective of ownership of the land on or under which they
are found. Under the other (the Regalian or royalty system) the State
controls the minerals and allocates the right to mine in return for the
payment of royalties. Sometimes this is justified on the hypothesis that
the minerals are not in private ownership at all but are owned by ‗the
people‘ collectively. There are echoes of this notion in the preamble to
the MPRDA where it states that South Africa‘s mineral and petroleum
resources ‗belong to the nation‘ and that the State is the custodian thereof.

[31] As Schutz JA pointed out there is little of use in the Roman Dutch
writers concerning mining and mineral rights because the Dutch countries

43 Dale at 12.

were not places where much mining occurred. Interestingly, however,
Voet 41.1.1344 says in regard to Holland‘s overseas possessions that the
right to all minerals and precious stones was vested in the Dutch East
India Company by a law of the Estates-General. This appears to reflect in
some measure the principle of the State exercising control over the right
to mine.45

[32] The common law principle is that the rights of the owner of
immovable property extend up to the heavens and down to the centre of
the earth. This is expressed in the maxim cuius est solum eius usque ad
caelum et ad inferos, usually abbreviated in academic writing to the cuius
est solum principle. Its origins are obscure as it is not to be found in the
Digest or elsewhere in the Corpus Iuris Civilis, but emerges in the writing
of the Glossator, Accursius, in the thirteenth century. It is not a principle
unique to the civil law tradition but is also applicable, with some
qualification in the light of modern conditions, under the English
common law.46 The principle continues to be recognised in our law
today,47 although we have not had occasion to consider some of the
difficulties in giving it unrestricted application in modern conditions. Its
application leads to the conclusion that the minerals in the soil under the
surface of immovable property are owned by, or, to use the Latin
expression, part of the dominium vested in, the owner of the property.48
Unlike the English law, where separate ownership of strata of the soil

44 Gane‘s translation, Vol 6, 192.
45 I doubt, however, whether it fully justifies Professor C G van der Merwe‘s comment, based on it,
that: ‗Sedert die Middeleeue word die reg op die ontginning van minerale as ŉ privilegie van die staat
beskou. Hierdie standpunt het in die Romeins-Hollands sowel as die Suid-Afrikaanse reg neerslag
gevind.‘ C G van der Merwe Sakereg (2ed, 1989) 566.
46 Star Energy Weald Basin Ltd & Anor v Bocardo SA [2010] UKSC 35; [2010] 3 All ER 975; [2011] 1
AC 380, paras 13 to 28 where Lord Hope discusses the brocard in some detail.
47 Anglo Operations Ltd v Sandhurst Estates (Pty) Ltd 2007 (2) SA 363 (SCA) para 16.
48 Le Roux & others v Loewenthal 1905 TS 742 at 745; Nolte v Johannesburg Consolidated Investment
Co Ltd 1943 AD 295 at 315.

under the surface is possible, such separation was never recognised in
Roman Dutch law,49 so that there could not be a separate ownership of
minerals before their extraction from the soil.

[33] In general the owners of property are free to do with it what they
wish. That is the foundation for the view that as a matter of common law
the right to mine vests in the owner of the land. Professor Badenhorst
identifies the entitlement to exploit the minerals in, on and under the land
as being one of the entitlements arising from ownership of land.50
Flowing from that entitlement, owners could permit others to prospect or
mine on their land, but that was in terms of personal contracts, not giving
rise to real rights. From the early days of mining in South Africa contracts
were concluded in terms of which the right to ‗prospect, dig, quarry and
exploit for, work, win, take out and carry away, and for his own account
to sell and dispose of minerals, metals or precious stones‘ was conferred
by landowners upon those who wished to prospect or mine.51 This
required ‗a progressive development of the law keeping place with
modern requirements‘.52

[34] The endeavour to accommodate the demands of mining within the
framework of contract and the common law gave rise to considerable

49 ‗Horizontal layers of the earth cannot with us, as they can in England, be separately owned.‘ per
Bristowe J in Coronation Collieries v Malan 1911 TPD 577 at 591; Anglo Operations Ltd v Sandhurst
Estates (Pty) Ltd supra para 16. The contrast between the English law and our own is discussed by
Dale, supra, Chapter 3.
50 P J Badenhorst ‗The re-vesting of state entitlements to exploit minerals in South Africa: privatisation
or deregulation?‘ 1991 TSAR 113 at 114. In accordance with the school of thought in property law that
there cannot be a right in a right, he eschews the use of the expression ‗rights‘ in relation to the things
that the owner may do preferring the expression ‗entitlements‘. The difficulty with this approach is that
when this entitlement is severed from the land it becomes an independent real right, which suggests
that its legal character is different prior to severance than after, a notion that poses considerable
conceptual difficulties.
51 This is the wording of the contract in Henderson & another v Hanekom (1903) 20 SC 513 at 522 of
which Kotzé J said that the conclusion of such contracts had become one of daily practice.
52 Per De Villiers CJ in Henderson & another v Hanekom op cit 519.

difficulties. Thus, for example, although these contracts were commonly,
including in legislation, referred to as leases of mineral rights, the
appropriateness of this nomenclature was questionable as they lacked the
hallmarks of a contract of locatio conductio.53 Another problem was the
nature of the rights afforded by such contracts. Personal rights, unlike real
rights, cannot be asserted against the world and this affected the security
afforded by such contracts. That was important because, from an early
stage it became apparent that substantial investment was needed to
develop mines. Such investment would not be forthcoming if, for
example, the insolvency of the landowner could destroy the rights on the
basis of which that investment had been made. The lack of separate
ownership of the minerals themselves gave rise to difficulties in
transferring them.54 None of these problems could be resolved until the
right to mine could be separated from the dominium of the land itself.
That occurred in the following stage of development.

The pre-Union legislation

[35] As is well known diamonds were discovered in South Africa in
1867. In 1871 the Kimberley pipes were discovered and in 1880, after
some uncertainty, Griqualand West was annexed to the Cape Colony. In
the South African Republic (to which I will for convenience refer as the
Transvaal) there were initial gold rushes in Pilgrim‘s Rest and Barberton.
The main Witwatersrand gold bearing reef was discovered on Langlaagte
farm in 1886, leading to the Witwatersrand gold rush and the
development of the gold mining industry, in which many of the leading
industrialists from the Kimberley diamond mines played a leading role.

53 Lazarus and Jackson v Wessels & others 1903 TS 499 at 506.
54 Dale at 82.

The first major attempt to explore for coal occurred in 1881 in the
Dundee area of the Colony of Natal. This lead to the establishment of
mines in that area and by 1903 more than half a million tons of coal was
being produced by collieries in Dundee and surrounding areas. Mining
accordingly became a significant part of the economic life of the Cape,
Transvaal and Natal and this resulted in legislation.

[36] In the Cape Colony, save to an insignificant extent, all rights to
precious stones, gold and silver were reserved to the Crown in terms of
s 4 of Sir John Cradock‘s Proclamation on Conversion of Loan Places to
Quitrent Tenure dated 6 August 1813.
‗Government reserves no other rights but those on mines of precious stones, gold, or
silver; as also the right of making and repairing public roads, and raising materials for
that purpose on the premises: Other mines of iron, lead, copper, tin, coal, slate or
limestone belong to the proprietor.‘
When Namaqualand was incorporated into the colony provision was
made by statute55 for the leasing and working of mineral lands in return
for payment of rent and a royalty. In 1883, shortly after the annexation of
Griqualand West, a comprehensive statute, the Precious Stones and
Minerals Mining Act,56 was passed. It provided for the taking out of
prospecting licences for precious stones, gold, silver and platinum on
Crown land or land where the right to those precious stones and minerals
was reserved. In the latter case the consent of the owner of the land was
not required. Discoveries had to be declared and this could then lead to
the area being proclaimed as a mine or alluvial digging always under
government control. Royalties were payable on the gross return from
mining. On private land not subject to a reservation of rights the owner
could allow prospecting or the extraction of minerals or precious stones,

55  The Mining Leases Act 10 of 1865 (Cape). This was amended from time to time thereafter.
56 Act 19 of 1883 (Cape).

but, if the number of claims exceeded a stipulated maximum, the area
could be proclaimed. Whilst in that event the owner would fix the amount
of the royalty, 10 per cent would be payable to the government. In later
years amendments were made to provide for compulsory prospecting57
and the rights of owners of land were varied. Lastly two new and
consolidated pieces of legislation were passed in 189858 and 189959 in
relation to precious metals and precious stones. The provisions of both
were similar. Prospecting licences could be obtained for both Crown and
private land, in the latter case with the consent of the owner, and on
discovery provision was made for proclamation with some protection for
owners. In 1907 similar regulation of prospecting for and mining of most
base minerals was enacted,60 whereby prospecting licences were issued
for prospecting on Crown land and if minerals were discovered a mineral
lease would be awarded subject to the payment of both rental and
royalties.

[37] In the Transvaal a Volksraad resolution of 1858 resolved that the
owners of land where minerals were found would be bound to sell or
lease the land to the government. Ordinance 5 of 1866 provided for the
exploitation and smelting of ores and the payment of a royalty to
government in respect of the proceeds. In 1871 the first of a series of laws
known generally as the Gold Laws and bearing the long title:
‗Regelende de ontdekking, het beheer en bestuur van de velden waarop
edelgesteenten en edele metalen in dezen Staat gevonden word‘61
was passed. 62 It provided that:

57 The Precious Stones and Minerals Mining Law Amendment Act 44 of 1887 (Cape).
58 Precious Minerals Act 31 of 1898 (Cape).
59 Precious Stones Act 11 of 1899 (Cape).
60 The Mineral Law Amendment Act 16 of 1907 (C).
61 An Act regulating the discovery, control and management of the fields where precious stones and
precious metals are found in this State. (My translation.)
62 Law 1 of 1871.

‗het mijnregt op alle edelgesteenten en edele metalen behoort aan de Staat.‘63
Discoveries of precious stones or precious metals had to be reported after
which the government would exercise control over the proclamation of
diggings and the activities of mining. Licences were required by anyone
wishing to dig for precious stones or precious metals. As Professor Dale
describes it:
‗The essence of the law was therefore the reservation of the right to mine to the State,
State control of diggings including private land, and the payment of licence moneys.‘
The first Gold Law was followed by a succession of laws all of which
conformed in essence to the same pattern, whilst building upon their
predecessors and adapting to new conditions.64 They all sought to strike a
balance between the interests of the State and those of the diggers and
landowners.65 The State needed the revenues that mining would generate
and accordingly needed to encourage the introduction of capital and
mining, whilst the majority of citizens (as opposed to uitlanders, as the
foreign miners were termed) were farmers, whose farming activities and
lives were disrupted by mining and who resented other people becoming
rich on the product of their land. As part of this balance provision was
made in the 1875 law for payments to be made to surface owners and for
the owners to have some control over prospecting on their own land.

[38] The 1883 law went further than its predecessors in providing that:

63 The mining right to all precious stones and precious metals belongs to the State. (My translation.)
64 Law 2 of 1872; Law 7 of 1874; Law 6 of 1875; Law 1 of 1883; Law 8 of 1885; Law 10 of 1887; Law
9 of 1888; Law 8 of 1889; Law 10 of 1891; Law 18 of 1982; Law 14 of 1894; Law 19 of 1895; Law 21
of 1986 and Law 15 of 1898. The full title of each law is set out in a table in Dr Kaplan‘s thesis at xi.
From Law 1 of 1883 they were entitled laws ‗op het delven van en handel drijven in edel metalen en
edelgesteenten in de Z A Republiek‘. The 1898 Law was the first to be described as ‗De Goudwet Der
Zuid-Afrikaansche Republiek op Het Delven van en Handel Drijven in Edele Metalen.‘.
65 Dale, at 194, draws attention (referring to the position in 1897) to ‗the delicate counter-balancing of
the potentially conflicting rights of the surface owner, mineral right holder, and mining title holder, as
also between the various mining title holders themselves‘ He also adopts the view of M Nathan in the
preface to Gold and Base Metals Laws (6ed, 1944) that these laws reflected the growing importance of
State supervision and intervention and the recognition of the interest of the public at large.

‗Het eigendom in en mijnregt op alle edelgesteenten en edelmetalen behoort aan den
Staat.‘
In other words the State would now claim ownership of precious stones
and precious metals as well as the right to mine them. This was a
departure from the cuius est solum principle as it contemplated ownership
of the minerals separately from the soil in which they were to be found.
More importantly it highlighted the view of the Transvaal that power over
these minerals vested in the State rather than the owners of private
property. Owners were afforded some preference by giving them a
concession to dig for gold on approved terms but that was all.

[39] In the same year a fundamentally important development occurred in
a law not primarily directed at mining and minerals, but at transfer duties.
It was Law 7 of 188366 which provided in article 14 that:
‗Geen afstand van regt op mineralen aanwezig te zijn of werkelijk aanwezig op eenige
plaats, zal wettig wezen zonder dat daaroover eene notarieele acte is opgemaakt en
behoorlijk geregistreerd ten kantore van der Registrateur van Akte.‘67
By s 23 of Law 8 of 1885 the requirement of notarial execution and
registration was extended to mynpachten. Innes CJ dealt with the earlier
provision in Jolly v Herman’s Executors68 in the following terms:
‗At the date when the agreement now sued upon was entered into, the law as to the
registration of mineral contracts was contained in Law No. 7 of 1883 and in
Volksraad Besluit No. 1422 of the 12th August, 1886. By sec. 14 of the statute it was
enacted that no grant of rights to minerals on any farm should be lawful unless
embodied in a notarial deed and duly registered in the office of the Registrar of
Deeds. Those provisions are strong and clear; … In view of the magnitude of the
interests affected by mineral grants in this country, and of the desirability of publicly

66 Tot regeling van de Betaling van Heerenregten.
67 No disposal of rights to minerals believed to be present or actually present on any property shall be
lawful unless a notarial deed thereover is prepared and properly registered at the office of the Registrar
of Deeds. (My translation.) The provision was replaced by s 16 of Law 20 of 1895 and thereafter by
s 29 of Proclamation 8 of 1902 which was to the same effect.
68 Jolly v Herman’s Executors 1903 TS 515 at 520.

recording such grants, so that all persons concerned might know them, it seems to me
that the policy of the legislature was quite as much to register these transactions as to
tax them. However that may be, the Volksraad did not long rest content with the
wording of the section above referred to. By Besluit No. 1422 of the 12th August,
1886, that body resolved that all contracts concerning the cession of rights to minerals
or about rights to mine (omtrent afstand van regten op mineralen of omtrent regten
om te delven) which did not conform to the provisions of the first paragraph of sec. 14
of Law No. 7 of 1883 should be ab initio void, and no one should have any action
whatever on such agreements. It is impossible after this lapse of time to say what case
occurred, or what facts came to the notice of the Raad between 1883 and 1886 which
led to this Besluit. But whatever the reason may have been which induced the
legislature to take action, the effect of the action which they did take was
unmistakable.
The policy embodied in the Law of 1883 was further extended, and in two directions.
It was made to apply to contracts which had not been covered by the statute, and the
result of non-compliance with the statutory direction was expressed in language still
stronger and more unmistakable than had been used before. The Law dealt only with
grants to mineral rights; the Besluit extended the provisions of the Law to all
agreements connected with such grants or with rights to mine. The Law declared that
non-notarial or unregistered contracts were unlawful; the Besluit directed that they
should be considered void ab initio, and should confer no rights of action of any kind
whatever.‘

[40] In 1884 the focus shifted briefly from gold to coal when, by
Volksraad resolution of 10 November 1884, the government was
authorised to grant licences for the working of coal mines on government
owned land. This was the first time that some control was taken of the
mineral rights in respect of base metals, perhaps as a result of similar
explorations in the Transvaal, which then included Vryheid, Utrecht and
Paulpietersburg, to those being undertaken in Natal. Another Volksraad
resolution in 1889 resolved that the government submit a law on base
metals to the Volksraad during the next session. That was done by way of

Law 10 of 1891, which provided, in a chapter intended to make
provisional regulation in respect of base metals, for licences to mine base
metals on proclaimed land. The chief feature of this appears to have been
that if the licence holder discovered precious metals or precious stones
they would receive a preference in being enabled to work their discovery.

[41] The 1885 law reverted to the original position in 1871, namely
that:
‗Het mijn-en beschikkiingsregt op alle edelgesteenten en edelmetalen behoort aan den
Staat.‘
Private owners were permitted to prospect on their own land and to
permit others to do so, but the government became entitled to appoint a
state mineralogist to conduct a survey, no doubt with a view to
identifying viable mineral deposits. The system of proclamation of
diggings was maintained and some preference was afforded to the
discoverer of minerals and the owner. The law clarified that by precious
metals gold was meant. Silver was added in 1887. A consolidating law
was passed in 1892, which required stone makers, rock quarries and chalk
burners to obtain licences for these activities on proclaimed land.

[42] In 1895 the Transvaal enacted its first comprehensive law dealing
with base metals and minerals in the form of the Base Metals and
Minerals Law 17 of 1895, which provided in s 1 that:
‗Het eigendomsrecht van en het beschikkingsrecht oor onedele metalen en mineralen,
zoowel op geproclameerde als ongeproclameerde gronden, behoort aan den eigenaar
van den grond.‘69
Whilst the entitlement to engage in prospecting and mining for base
metals was held by or was within the gift of the owner, a royalty would

69 The ownership of and right to exploit base metals and minerals on both proclaimed and
unproclaimed ground belongs to the owner of the ground. (My translation.)

be payable to the State. On government land licences were required and a
royalty was also payable. The law was replaced in 189770 but without
major change. Then in 1898 precious stones were separated from gold,
silver and quicksilver in two new statutes.71 Both statutes continued to
state, as had their predecessors, that the right to mine precious stones and
precious metals was reserved to the State. After the war ended in 1902,
the Crown Land Disposal Ordinance72 provided for the reservation of all
rights to minerals, mineral products and precious stones to the Crown on
land granted by the Crown. This was moderated in 190673 by making
such a reservation permissible but not obligatory.

[43] Prior to union in 1910 there were new ordinances dealing with both
precious stones74 and precious and base metals.75 As to the former
Professor Dale says it ‗preserved the philosophy that the right of mining
for and disposing of precious stones is vested in the Crown‘.76 As to the
latter it provided in s 1 that:
‗The right of mining for and disposing of all precious metals is vested in the Crown;
The ownership of and the right of mining for and disposing of base metals on Crown
or private land, is vested in the owner of such land.‘
This last of the Gold Laws, for the first time, referred to and defined the
expression ‗holder of the mineral rights‘, thereby giving statutory
recognition to the possibility of a separation of the right to minerals from
the ownership of the land. It also defined, for the first time in the Gold
Laws, the expression ‗mining title‘. The definition set out six different
sources of mining titles. All six flowed from statutory grants under the

70 Base Minerals and Metals Law 14 of 1897 (T).
71 Gold Law 15 of 1898 (T) and Precious Stones Law 22 of 1898 (T).
72 Ordinance 57 of 1903 (T).
73 By Ordinance 13 of 1906 (T).
74 Precious Stones Ordinance 66 of 1903 (T).
75 Gold and Base Metals Ordinance 35 of 1908 (T).
76  Dale at 197.

Gold Laws. In the 1908 law prospecting for precious metals required a
permit save in the case of the owner of land. On discovery of precious
metals the area could be proclaimed as a public digging, a mineral lease
could be granted or a State mine established. In order to obtain a mineral
lease the applicant would have to show that it had the capacity to mine.
These provisions were replicated in relation to base metals on Crown land
but otherwise the owner was permitted to prospect or mine for base
metals, or to permit others to do so. However, in terms of s 121, a royalty
was payable to the government on the extraction of base minerals.

[44] In Natal there were some early laws relating to mining, the first of
which involving a concession to a coal company, but the first major piece
of legislation was the Natal Mines Act 17 of 1887, which provided in s 4
that:
‗The right of mining for and disposing of all gold, precious stones and precious
metals, and all other minerals in the Colony of Natal, is hereby vested in the Crown
for the purposes of and subject to the provisions of this Law.‖
This went further than the legislation in the Cape and Transvaal in that it
reserved to the Crown the right to mine for and dispose of all minerals.
Prospecting required a prospecting licence and on the discovery of
minerals there could be public proclamation of diggings or a mining
lease. A linguistic, though not a practical, distinction was drawn between
a gold mining lease and a mineral lease. The Natal Mines Act emphasised
the search for gold and coal. Owners could obtain mining leases on
payment of rent and royalties. Thus from the outset the position in Natal
was that the government controlled the right to mine and dispose of all

minerals. This continued when the 1887 Act was replaced in 188877 and
again in 1899.78

[45] There was also legislation dealing with mining in the Republic of
the Orange Free State and, after 1902, the Orange River Colony, although
the major mining activities in that area lay in the future. This largely
followed the early Transvaal legislation. Separate provision was made in
relation to diamonds, where the State had the option to acquire, with the
consent of the owner, any farm on which diamonds were discovered as an
alternative to proclaiming diggings. In 1904 three pieces of legislation
were passed dealing with precious metals,79 precious stones80 and base
metals.81 These did not differ in principle from the legislation in the
Transvaal, save that in regard to base metals they provided that the owner
could prospect for them or consent to a prospector doing so, but in that
event the prospector had to obtain a licence, even though the prospecting
was to take place on private land. As in the Transvaal a royalty was
payable in respect of the extraction of base metals. Measures in the form
of licence fees for non-working of a claim or even in some circumstances
forfeiture of the claim were put in place to encourage mining. Like the
Transvaal an ordinance82 was passed reserving all rights, including the
right to mine, to precious stones and precious and base minerals on
alienated Crown lands to the Crown.

[46]  At the end of this general and necessarily limited survey of the
pre-Union legislation governing mining in South Africa some conclusions

77 Natal Mines Act 34 of 1888.
78 Coal and Mines Act 43 of 1899 (N).
79 Precious Metals Ordinance 3 of 1904 (O).
80 Precious Stones Ordinance 4 of 1904 (O).
81 Base Metals and Minerals Ordinance 8 of 1904 (O).
82 Crown Land Disposal Ordinance 13 of 1908 (O).

can be expressed. In relation to precious stones, of which diamonds were
the most important, gold and silver (and in the Transvaal quicksilver83),
the right to mine was everywhere reserved to the State under legislation.
As Innes CJ expressed it in Greathead v Transvaal Government and
Randfontein Estate and Gold Mining Co Ltd:84
‗The policy and scope of the Gold Law of 1889, and its successors, was to vest the
sole right of mining for, and disposing of, precious metals in the State.‘
This statement was equally applicable to the other parts of the country
prior to Union. Natal went further in that the sole right of mining for and
disposing of base metals and minerals also vested in the State. In the
Transvaal and Orange Free State and parts of the Cape royalties were
payable to the government on the products of mining for base metals and
minerals. This is significant because a royalty is conventionally a
payment in return for the right to mine for and extract metals, minerals,
precious stones or oils and gas.85 Counsel for Agri SA accepted that this
was the nature of these royalties and that they were not a form of
taxation. In this way therefore the government in these areas conferred
and controlled the right to mine in relation to base metals and minerals as
well as precious stones and precious metals.

[47] The control that the governments of the four colonies and their
predecessors exercised over the right to mine in the areas under their
jurisdiction did not divest the owners of land on which minerals were
found of their rights of ownership in those minerals, prior to their being
extracted by the process of mining. Until then ownership remained with

83 Mercury in solid form that was used in the process of extracting gold from gold ore.
84 Greathead v Transvaal Government and Randfontein Estate and Gold Mining Co Ltd 1910 TS 276
at 288. This was a view consistently held by him. See Neebe v Registrar of Mining Rights 1902 TS 65
at 81 where he said: ‗The right of mining for and disposing of all precious metals has by statute been
given to the State.‘ See also Smith J at 90.
85 Xstrata & others v SFF Association, supra, para 18.

the owner of the land, but that ownership was restricted because the right
to mine was controlled by the State. As Innes CJ said:86
‗But that does not decide the question as to the ownership of the mining rights. Under
the scheme of all the gold laws, past and present, such rights are treated as distinct
from the dominium of the soil; they are vested in and disposed of by the State, and are
exercisable and enjoyed quite apart from the dominium.‘

[48] I conclude that from an early stage of South African mining
development the right to mine was a right that the State asserted for itself
and controlled. It then allocated to owners, prospectors, claims holders or
persons holding mynpachte or mineral leases in terms of legislation, the
right, in accordance with the terms of those grants, to exercise the right to
mine as it deemed appropriate. Professor Dale writes:87
‗The Mining Industry is of such great national importance in a country that is blessed
with mineral wealth, that from the earliest times, the State has sought to control it in
some form or another.
…
In South Africa, after 1850, each of the four colonies which in 1910 united to form the
Union of South Africa, developed its own system whereby the State controlled the
prospecting and mining of certain minerals, in particular precious metals and precious
stones …‘
In relation to any minerals to which these statutes did not apply he says
that ‗the ordinary common law provisions in regard to the acquisition of
mineral rights, a right to prospect and a right to mine … apply‘. That may
be so but the extent of this entitlement is unclear. It was not the case at all
for Natal. In areas other than Natal and some parts of the Cape the owner
was expressly permitted to prospect and cause base minerals to be mined.
In the Transvaal that was as a result of a specific provision in the Gold

86 Simmer and Jack Proprietary Mines Ltd v Union Government (Minister of Railways and Harbours)
1915 AD 368 at 396.
87 Dale at 171-2.

Law that gave the right to mine base minerals to the owner of the land on
which they were found and demanded payment of a royalty for the
privilege. In the Orange Free State the position was the same, except that
a prospecting licence was required as it was in parts of the Cape. In three
of the provinces royalties were payable on all or some base mineral
production. None of this is compatible with the notion that there were
substantial areas where the common law held sway. At the very least I
think Professor Mostert is correct in saying88 that: ‗The right to seek for
and extract minerals was, however, in many respects, the prerogative of
the state.‘

[49] A key event in the development of mining rights in South Africa
was the imposition of the requirement that disposals of such rights and
mynpachte had to be notarially executed and registered in the Deeds
Registry in order to be binding. The construction the courts placed upon
such registered rights facilitated the creation of separate mineral rights.
Originally there was nothing to say in what form registration should take
place. It appears from Houtpoort Mining & Estate Syndicate Ltd v
Jacobs89 that the Registrar‘s practice was to place such deeds in a register
of Diverse Akten, although in some instances he registered them at the
instance of the parties against the title deed in the Land Register.

[50] That case dealt with the earlier legislation referred to in paragraph
39, which was replaced in 1902 with a provision that ‗No lease of any
mijnpacht, claim or right to minerals …‘ would be valid unless notarially
executed and registered ‗against the title deeds of the property‘.90 Innes
CJ held that this applied to ‗those mineral prospecting contracts in return

88 Mostert supra 20.
89 Houtpoort Mining & Estate Syndicate Ltd v Jacobs 1904 TS 105
90 Section 29 of Proclamation 8 of 1902 (T).

for the payment of a yearly rent, and with or without option rights which
are so common in this country‘.91 He went on to say in regard to a right to
search for and win minerals that:
‗I must confess to having at first experienced considerable difficulty --- a difficulty
which pressed me during the argument in finding an appropriate juristic niche in
which to place this right. Rights of that nature are peculiar to the circumstances of the
country, and do not readily fall under any of the classes of real rights discussed by the
commentators. They seem at first sight to be very much of the nature of personal
servitudes; but then they are freely assignable. On further consideration, however, I
am of opinion that the difficulty I have referred to is more academic than real. After
all, the right in question involves the taking away and appropriation of portions of
realty; it implies the exercise of certain privileges generally attached only to
ownership, and it is treated by the Proclamation as a real right and is ordered to be
registered against the title. In my opinion; therefore, this right when registered
occupies the position of a real right …‘

[51] Thereafter, in Van Vuren v Registrar of Deeds,92 Innes CJ, having
pointed out that the rights so registered were neither personal nor praedial
servitudes, described them as quasi-servitudes. Separate registration of
any mining right was now required and they were effectively
characterised as real rights. In addition the 1908 Gold Law provided a
definition of mining title. In the same year provision was made for all
mining titles to be registered under the Mining Titles Registration Act.93
Thus was the foundation laid for a class of separate mineral rights held
separately from the ownership of land. This was a marked departure from
the common law and the operation of the cuius et solum principle. The
latter was ‗diluted by the fact that the landowner who had alienated the

91 Lazarus and Jackson v Wessels & others supra 506.
92 Van Vuren v Registrar of Deeds 1907 TS 289 at 295.
93 Act 29 of 1908.

mineral rights to another was denuded of any entitlement regarding
extraction of and disposal over such minerals‘.94

[52] Thus the ability to sever mineral rights from the dominium of the
land to which they related was afforded by statute, not the common law.
That meant they could be dealt with as separate real rights. Their
registration in the Deeds Registry against the title deeds of the property
provided protection that, as the Houtpoort Mining case demonstrated, had
not hitherto been available. The further concepts underlying our notion of
mineral rights were then developed by ‗the creative judgments‘95 of our
courts. Against that background I turn to consider the next important
period in relation to mineral laws from 1910 to 1967.

From 1910 to 1967

[53] Section 123 of the South Africa Act, 1909 provided that:
‗All rights in and to mines and minerals, and all rights in connection with the
searching for, working for, or disposing of minerals or precious stones, which at the
establishment of the Union are vested in the Government of any of the Colonies, shall
on such establishment vest in the Governor-General-in-Council.‘
The pre-Union statutes summarised above remained in force and did so,
subject to some amendment and supplementation, until their repeal by the
Mineral Rights Act 20 of 1967. During this lengthy period mining
became ever more important to the South African economy. Not
surprisingly therefore the legislative changes that did occur reflect an
expansion of the State‘s powers of control over mineral resources. In
three instances legislation was adopted that, like the Gold Laws and the

94 Mostert supra 7
95 The phrase is Professor Badenhorst‘s in his article ‗Towards a theory of mineral rights‘ 1990 TSAR
239 at 239.

Natal Mines Act, vested the right to mine and the right to exploit minerals
in the State. The first of these was the Precious Stones Act,96 which
provided in s 1 that ‗the right of mining for and disposing of all precious
stones is vested in the Crown‘. Precious stones were defined to include
diamonds, rubies, sapphires and any other substances proclaimed as such
by the Governor-General. Accordingly the legislation reserved to the
State the power by proclamation to extend its right to mine to other
materials. This was similar to the position under the 1908 Gold Law and
its predecessors, which authorised the extension of the class of precious
metals by way of proclamation. That power had been exercised to include
silver and quicksilver during republican days and was invoked in 1922 to
include platinum, iridium and the platinum group metals.97

[54] In 1942 the State assumed the right to mine for natural oil in terms
of s 2 of the Natural Oil Act,98 which provided that ‗the right to prospect
and mine for natural oil is vested in the State‘, although there was at that
time little anticipation of natural oil being discovered in South Africa.
This was at a time when off-shore drilling had only taken place in a very
few locations close to shore in very shallow waters. The advent of deep
water off-shore drilling came after the end of World War 2.99 Uranium
was a different matter and the State took control of that in 1948 under the
Atomic Energy Act, 100 which provided that
‗… there shall be vested in the State the sole right –
(a)
to search, prospect or mine for prescribed materials or in any manner to acquire
any such material or to dispose thereof;

96 Act 44 of 1927.
97 Kaplan 11.
98 Act 46 of 1942.
99 See A Brief History of Offshore Drilling a staff working paper prepared for the National Commission
investigating the BP Deepwater Horizon Oil Spill and Offshore Drilling available at
http://www.oilspillcommission.gov/sites/default/files/documents/A%20Brief%20History%20of%20Off
shore%20Drilling%20Working%20Paper%208%2023%2010.pdf.
100 Act 35 of 1948.

(b)
to extract or isolate any such material from any substance, or to concentrate,
refine or process, or to produce atomic energy.‘
Prescribed materials were defined as uranium, thorium or any other
material proclaimed by the Governor-General and included any substance
containing uranium, thorium or any other such material.

[55]  Apart from these instances there were also developments in the
law relating to base minerals. No doubt this was influenced by the
expansion of mining in metals such as iron ore, manganese, chromium
and asbestos101 that had occurred from around the time of Union through
the 1920s and early 1930s. Whilst the exercise of the right to mine these
base minerals remained largely in private hands, steps were taken in the
Base Minerals Amendment Act102 to encourage and compel the holders of
such rights to exploit them. To this end the Minister was empowered to
give notice to a holder of such rights, who was not prospecting for
minerals pursuant to those rights or in the view of the Minister was not
doing so adequately, calling upon the holder to prospect adequately or to
cause such prospecting to be undertaken within six months, failing which
the Minister could call for tenders for and grant a prospecting lease over
the affected property. However, if this occurred, the royalties that would
be paid would enure for the benefit of the mineral rights holder. Base
minerals were comprehensively defined as including ‗any mineral
substance‘ with the exclusion of natural oil, precious stones, water and
precious metals as defined in the statutes governing the exploitation of
those. In order to avoid any overlap, once the Atomic Energy Act had

101 H P Hart ‗Asbestos in South Africa‘ J. S. Afr. Inst. Min. Metal vol 88, no 6, 185-196, which notes
that asbestos mining began in earnest in South Africa in the 1930s.
102 Act 39 of 1942.

come into operation the exclusions were extended to exclude material
covered by the Atomic Energy Act in 1951.103

[56] In the 1960s a process of consolidating and revising the statutes
governing mining in South Africa occurred. First there was the Precious
Stones Act.104 As with its predecessors it provided that the right of mining
for and disposing of precious stones was vested in the State. In other
respects it largely followed the pattern of earlier legislation. More
important, because of its broader scope, was the Mining Rights Act 20 of
1967 (the 1967 Act), which replaced all the pre-Union legislation and for
the first time created a single system of mining rights in South Africa as a
whole. Section 2(1) provided that:
‗Save as otherwise provided in this Act –
(a)
the right of prospecting for natural oil and of mining for and disposing of
precious metals and natural oil is vested in the State;
(b)
the right of prospecting and mining for and disposing of base minerals on any
land is vested in the holder of the right to base minerals in respect of the land.‘
The exclusion of material covered by the Atomic Energy Act was
continued by s 2(2). Mining title was defined105 as meaning:
‗any right to mine granted or acquired under this Act, and any other right to mine
granted or acquired under any prior law and existing at the commencement of this
Act, but does not include a right to mine for precious stones.‘
This language is significant because it contemplated that all mineral
rights would flow from a statutory grant or be acquired by virtue of
statutory provisions. That is inconsistent with the notion that such rights
flow from the common law. 106

103 By s 1 of the Base Mineral Investigation Act 31 of 1951.
104 Act 73 of 1964.
105 In s 1(xxiii).
106 Franklin and Kaplan, supra, 340 say that the sources of mining title under this definition are twofold
namely a right to mine granted under the 1967 Act or a statutory right acquired directly by the holder.
In either event the right flows from the statute not the common law. In the Mining Titles Registration

[57] Under s 7(1) of the 1967 Act no person was permitted to prospect
for precious metals on either State land or private land not held under
mining title, or for base minerals on unproclaimed State land not held
under mining title, without a permit. Under s 11 the Minister could
conduct an investigation into the precious metal, base metal or natural oil
content of any land. Under s 15(1), if the holder of mineral rights or
others having an entitlement to prospect did not do so or did not do so to
the Minister‘s satisfaction, the Minister could proceed along lines similar
to those under the Base Minerals Amendment Act, 1942. In other words
there was an inducement, and if necessary a compulsion, to explore for
and exploit minerals. Under s 25(2) the Minister was obliged to issue
mining leases in respect of precious metals to holders of mineral rights
over unproclaimed private land, to owners or lessees of unproclaimed
alienated State land and otherwise to the prospector. However the
entitlement of these persons to a mining lease was not absolute. The
Minister had to be satisfied that the precious metal, base mineral or
natural oil was present in workable quantities; that the scheme under
which it was proposed to carry on mining was satisfactory; and that the
applicant had, or had made arrangements to obtain, adequate financial
resources and capital to conduct the proposed mining activities.

[58] The 1967 Act preserved the power of the State President to
proclaim public diggings and the right of persons to peg claims in such
diggings. It dealt with prior rights under mynpachten and provided, in
s 75, for existing mining leases and mineral leases to remain in force as if
it had not been passed. Sections 76(1) and 77(1) provided for mining

Act 16 of 1967 the concept of a holder of a mining right is defined (s1(vi)) in relation to rights ‗granted
or acquired‘ under the 1967 Act or any other statute.

leases in relation to base minerals granted under the old Transvaal and
Cape legislation to be converted into mining leases under the 1967 Act.

[59] From 1910 onwards the rights established in the Transvaal for the
registration of mining titles were maintained and from time to time
extended.107 In addition the two Deeds Registries Acts108 made provision
for separate registration of some mineral rights, and, in 1967, the Mining
Titles Registration Act109 required that title to all mineral rights be
registered. Registration in turn required the development of principles
relating to the resolution of conflicts between the holders of mineral
rights and owners of the land or other rights holders or public authorities.
These disputes were resolved by the courts applying and adapting
common law principles to these novel rights. They did so by using
familiar legal terms such as lease and servitude while acknowledging that
they were not being used in their conventional sense. In the process the
legislative origin of these rights and the degree of departure from
common law principles became obscured.

[60] This tendency to obscure or overlook the key role of legislation in
the development of our law of mineral rights is well illustrated by the
analysis in the leading textbook on mining law in regard to the effect of
s 2(1) of the 1967 Act.110 That section dealt clearly and explicitly with the
right to mine in relation to precious minerals (ss 1(a)) and base minerals
(ss 1(b)). In doing so it followed the example of the 1908 Gold Law.
There seems little reason not to view this as a statutory allocation of the
right to mine in accordance with government policy of the day. One

107 Franklin and Kaplan, supra, 586.
108 Act 13 of 1918 and Act 47 of 1937.
109 Act 16 of 1967.
110 See footnote 106 and para61, post.

cannot view ss 1(a) as taking away the common law rights of landowners.
That would be inconsistent with over a century of history reflecting the
approach of successive governments in the different parts of the country
that it was for government, not landowners, to determine who should
exercise the right to mine, at least in regard to precious stones, precious
metals, natural oil and uranium and in some instances more. Insofar as
there can be any question of taking away rights vested in landowners by
the cuius et solum principle, that had occurred many years before when
mineral rights became capable of severance from ownership of the land,
and it was never reversed. Section 2(1)(a) clearly retained the position in
regard to precious metals and natural oil that the right to mine was vested
in the State and was allocated by statute.

[61] Looking at the structure of s 2(1) there seems no good reason to
think that it reflects an entirely different view in regard to the right to
mine base minerals. That is recognised by Franklin and Kaplan111 when
they pose the question whether this is a statutory grant of those rights or a
restatement of the common law.112 However, without further analysis
they then express the view that it is a restatement of common law rights.
In my opinion that is incorrect. Under the common law only the owner of
the land would have had the right to prospect for, mine for and dispose of
base minerals in accordance with the cuius et solum principle.
Section 2(1)(b) does not mention the owner of the land at all, although it
is the landowner who is the beneficiary of the cuius et solum principle.
The section conferred the right to mine in relation to base minerals on the
holder of the rights to base minerals, who might or might not have been
the owner of the land. If they were, the fact of ownership of the land

111 Supra 345-6.
112 The same question was posed, without being answered, by Caney J in S A Permanent Building
Society v Liquidator, Isipingo Beach Homes (Pty) Ltd 1961 (1) SA 305 (D) at 313C.

added nothing to their entitlement to prospect and mine. At most it
afforded greater control over the use to which their property could be put.
Where the rights were separated they were held under a title that had its
origins in legislation and was impossible to acquire at common law. I
conclude that s 2(1)(b) reflects an allocation by the State of the
entitlement to exercise the right to mine to holders of mineral rights to
base metals. The underlying principle is that the State has always viewed
it as its entitlement to control and allocate the right to mine. Even if one
accepts that Professor Dale is correct in saying that at Union in each of
the four provinces ‗the State controlled the prospecting and mining of
certain minerals‘ leaving some to be dealt with by landowners pursuant to
the rights enjoyed by owners under the common law, under s 2(1) the
State controlled the prospecting and mining of all minerals, precious and
base, and either reserved them to itself or allocated them to the holders of
mineral rights. Professor Mostert summarises matters correctly when she
says113 that:
The philosophy of state control over minerals during the period 1964 to 1990 resulted
in a system whereby the state, in which the right to mine was vested, conferred rights
to mine and prospect to mineral rights holders.‘

The 1991 Act

[62] There can be no doubt that the 1991 Act was intended to alter the
position in respect of mineral rights that had developed over the 150 years
that preceded it.114 Its genesis was a policy of privatisation and

113 Mostert supra 55.
114 In what follows I deal with the 1991 Act as if it had been applicable from the outset in the whole of
South Africa. That was not however the case, as in the so-called TVBC states and homelands the 1967
Act remained in force and in some instances there was local legislation. There was only a unified
system after the passage of the Mineral and Energy Laws Rationalisation Act 47 of 1994. A more
complete picture emerges from Mostert, supra, 51-53.

deregulation announced by the government of the day in 1987.115 Its
embodiment was s 5(1) the terms of which bear repetition:
‗Subject to the provisions of this Act, the holder of the right to any mineral in respect
of land or tailings, as the case may be, or any person who has acquired the consent of
such holder …shall have the right to enter upon such land or the land on which such
tailings are situated, as the case may be, together with such persons, plant or
equipment as may be required for purposes of prospecting or mining and to prospect
and mine for such mineral on or in such land or tailings, as the case may be, and to
dispose thereof.‘
The shift from s 2(1) of the 1967 Act lay in the fact that there was no
longer an express reservation to the State of any mineral rights, save
where those rights had not been severed from State land or where they
had been severed, but for some reason the State was still the holder of the
rights. Nor was there any reservation of rights to the owner of land. In
this iteration of South African mining legislation the holder of the mining
rights was the only person able to exercise the right to mine. Neither the
State nor the landowner was so entitled, save where they were also the
holder of the mining rights in respect of land.

[63] Kaplan and Dale116 expressed the view that this was a restoration
of common law rights in the following comment on s 5(1):
‗This has the effect, subject to the system of authorisations and subject to the special
provisions relating to alluvial diggings mentioned below, that the common law rights
of the holder of the rights to minerals revive to their full extent, Section 5(1) probably
having been intended to be a mere restatement of such common law … Accordingly,
the Minerals Act is more easily comprehensible if the principles formerly applicable
to base metals on private unproclaimed land are extended to all other minerals on all
other classes of land.‘

115 Badenhorst fn 50 supra, p 113, fn 7.
116 Supra, para 1.5.2, pp 5-6 and paras 4.2 and 4.3 pp 46-48.

Professor Badenhorst drew attention to two major difficulties with this
view.117 First, nowhere in the common law was an independent right to
mine identified or refined. The entitlement to mine arising from
ownership of land was recognised (presumably by reference to the cuius
et solum principle), but its recognition was indirect and flowed from the
principle that ownership of land gave the owner an entitlement to the
fruits of the soil. Second, a mineral right was not recognised as a separate
independent right by the common law. That was a development that had
its origin in legislation and statutory instruments that imported and
adapted British mining practice of reserving the right to mine to the State,
or recognised mineral rights as separate rights. Both the legislature and
the courts then categorised these rights by adapting familiar common law
terms, such as ownership, lease and servitude.118

[64] The 1991 Act vested substantial powers in the responsible
Minister. Although s 5(1) conferred the right to mine on the holders of
mineral rights, that was made subject to their obtaining authorisation in
terms of s 5(2). The extent of this power of authorisation is best
illustrated by the fact that it was thought necessary in s 5(2)(b) to provide
a special exemption from the obligation to obtain a mining authorisation
for occupiers of land who removed sand, stone, rock, gravel, clay or soil

117 P J Badenhorst ‗Artikel 5(1) van die Mineraalwet 50 van 1991: ŉ herformulering van die
gemenereg?‘ (1995) 58 THRHR 1 at 5-8.
118 Professor Badenhorst expresses it thus:
‗Tweedens word kategorisering van bevoegdhede voortspruitend uit 'n mineraalreg as sodanig nie in
die gemenereg aangetref nie aangesien 'n mineraalreg nog nie as afsonderlike en selfstandige saaklike
reg bestaan het nie. Hierdie ontwikkeling het sedert 1813 hier te lande plaasgevind, hoofsaaklik
vanweë wetgewing wat óf uitdrukking verleen het aan die Britse praktyk om tydens die uitgifte van
grond die mineraalregte ten gunste van die owerheid voor te behou, óf die selfstandigheid van
mineraalregte erken het.
Kategorisering van ontginningsbevoegdhede wat ingevolge die gemenereg bestaanbaar sou wees, het
eerder deur (i) die wetgewer en (ii) die howe na analogie van die inhoud van eiendomsreg, die
serwituut-figuur en wetgewing plaasgevind.
Die wetgewer het 'n belangrike rol gespeel in die nadere identifisering van die ontginningsbevoegdhede
wat vanuit ontginningsregte voorspruit deurdat hierdie bevoegdhede as selfstandige regte beskou is.‘

for farming purposes or for effecting improvements in connection with
farming purposes on the land they were occupying. That such an
exemption was necessary illustrates that the Minister had extensive
powers to control mining activities and could exercise those powers
through the grant or withholding of mining authorisations. The issuing of
mining authorisations was governed by s 9 and was dependent on the
Director: Mineral Development being satisfied that the proposed mining
would result in the optimal development of the minerals; that the
applicant had the capacity to rehabilitate the mine once mining activities
ceased; that the applicant had the ability, which obviously included the
financial resources, to mine optimally and rehabilitate the surface. In
terms of s 9(5) an application for a mining authorisation had to include
substantial information concerning the proposal. The Director would, in
terms of s 11(1), determine the duration of the authorisation and in terms
of s 63 the Minister was empowered to make regulations governing the
exploitation, processing, utilisation or use of or the disposal of any
mineral and the conditions attaching to any mining authorisation.

[65] The reaction of the Chamber of Mines to the original draft of the
Bill that became the 1991 Act was hostile. They said in a memorandum
that:
‗The State will maintain complete control of all mining for and disposal of all
minerals, precious as well as base; firstly, by laying down conditions for the grant of
permits and licences with power to vary such conditions; and secondly by being in a
position to dictate … that the manner in which the mining operations and marketing
of minerals are being conducted must be in the Minister‘s liking.‘

Whilst the Bill was amended thereafter, the position remained that it was
characterised by ‗a cradle to grave form of regulation‘.119 Professor
Badenhorst concluded that in its final form it embodied an increase and
not a decrease in State control because it extended control to all mining of
base minerals; it gave wide discretionary powers to officials and the
Minister and it maintained strict control of all previous state-held
entitlements to exploit minerals including base minerals.120

[66] These comments were in my view justified. To characterise the
1991 Act as restoring common law rights and relaxing state control of the
right to mine was erroneous. What the 1991 Act did was to confer on the
holder of mineral rights the exclusive right to exploit them, because only
the holder, or someone acting with the consent of the holder, could obtain
an authorisation to prospect or mine that would enable the rights to be
exploited. In itself that was not a major change, as the holders of mineral
rights, or persons acting with their consent, had in large measure under
the 1967 Act been the only persons entitled to exercise those rights,
subject to the exception mentioned below in relation to unexploited
rights. The change lay more in two matters. First there was no longer any
express reservation of rights to the State in respect of any category of
minerals, although the State was, for various reasons, a substantial holder
of mineral rights and would remain such. Second, the provisions directed
at securing the optimum exploitation of minerals were altered. The State
could no longer, as it had been entitled to do under the 1967 Act, grant a
prospecting lease in respect of unexploited mineral deposits against the
will of the owner of the land or the holder of the mineral rights, subject

119 Badenhorst, fn 46, supra, 129. Mostert, supra, para 5.2.1, pp 60-69 and para 5.4 at p 72 appears to
share this view, although she also seems to think that in some form this involved a restoration of
common law rights, a view I do not share.
120 Badenhorst op cit 129-130.

only to the payment of rental and compensation for damage.121 In terms
of chapter IV of the 1991 Act, the Minister could in very limited
circumstances, where the right to prospect could not be secured from the
rights holder, authorise prospecting and could also cause unexploited
deposits to be investigated. However, if it was thought desirable to
exploit them, either the land or the rights would have to be expropriated
and compensation paid. There is nothing in the record to indicate the
extent to which the Minister had exercised his powers under s 15 of the
1967 Act. It is accordingly impossible to say more than that the 1991 Act
diminished the powers of the Minister in this respect and expanded the
rights of the mineral rights holder. However, the exercise of mineral
rights was still closely regulated and there were provisions to bring about
the optimum exploitation and discourage sterilisation of viable mining
rights,122 as there had been in other legislation down the years.

[67] Three small and perhaps slightly obscure provisions make it clear
that the State was not, in the 1991 Act, abandoning the principle that the
right to mine vested in it and that it was for the State to allocate that right
as it deemed appropriate. The first is s 5(2)(a), which empowered the
South African Roads Board and provincial governments (in relation to
provincial roads) to search for and take ‗sand, stone, rock, gravel, clay
and soil‘ for road-building purposes irrespective of whether they held
mineral rights to those minerals. That would clearly diminish the rights of
holders of mineral rights in respect of those minerals. The second is s 6(3)
which, no doubt in response to the Trojan Mining case, authorised a
person who was exercising a right to mine in respect of one mineral to

121 Section 15 of the 1967 Act and particularly s 15(3). A prospecting lease was the gateway to a
mining lease. Franklin and Kaplan, supra, 79. In the case of a prospecting lease under s 15 the
prospector would be entitled to obtain a mining lease under s 25(1)(e) read with s 25(2)(c) of the 1967
Act.
122 Chapter IV of the 1991 Act.

mine and dispose of other minerals in respect of which they did not have
such rights, subject only to an obligation to compensate the holder of the
mineral rights in respect of the other mineral. Again that is a subtraction
from the rights of the second mineral rights holder. Third the exercise of
mineral rights was prohibited in certain areas in terms of s 7 of the 1991
Act. All of these illustrate to my mind the fact that in the 1991 Act, as in
previous legislation the State was asserting that the right to mine vested in
it and that it was for the State to allocate that right in the manner and to
the extent it saw fit.

Legal position prior to 2002

[68] It is apparent from this survey that what have come to be referred
to as common law mineral rights, in both judgments of the courts and
academic writing, do not in fact have their origin in the common law.
They originate largely from legislation governing the right to mine and
legislation that permitted personal rights obtained under contracts to be
registered as rights separate from the ownership of the land to which
those rights related. Their ‗common law flavour‘ has arisen from the
creative judgments of the courts in characterising and giving effect to
such rights within a framework provided by well-known categories of
rights in our law. This juristic pigeonholing cannot however be used to
disguise the true origins of such rights. Nor can the adoption by the courts
or, on occasions, the legislature, of the expression ‗common law mineral
rights‘ be taken as being any more than a convenient mode of referring
generally to such rights. It cannot alter their true source and nature.

[69] Underpinning the development of varying forms of mineral rights
over the years has been the basic philosophy that the right to mine is

under the suzerainty of the State and its exercise is allocated from time to
time, as the State deems appropriate. Apart from a few instances the State
has not claimed ownership of minerals separate from the ownership of the
land on or under which they are found. It has been content to allow such
ownership to remain with the landowner. However, ownership of
minerals without the right to exploit that ownership is of little value. At
most it confers on the owner the power to exclude others from exploiting
them. Even that has been of limited value over the years as early
legislation recognised the claims of diggers and proclaimed private land
as public diggings in order to ensure that the minerals were exploited for
the benefit of the State and its inhabitants. Later legislation has contained
provisions directed at ensuring the optimal exploitation of mineral rights.
This accords with a point made by Professor Dale123 that State
interference in relation to mining has aimed to:
‗… ensure the full exploitation of the mineral wealth of the country either by itself
mining or by throwing open the land to public prospecting and mining, thus ensuring
that sterilization of  valuable minerals did not occur merely because private
landowners did not wish, or were not in a position, to prospect and mine their land.‘

[70] Two other important points flow from this analysis. The first is that
the value of mineral rights – and I recognise that for many years such
rights have had substantial value – has flowed from the entitlement the
holders have enjoyed under the legislation in force from time to time to
exercise, with or without some form of permit, licence or authorisation,
the right to mine. Mere ownership of minerals in the ground was only
valuable when owners could control access to their land for the purpose
of prospecting and mining for minerals. Where they could not, as in the
initial gold rush, where claims were pegged out on private land and the

123 Dale at 172.

state recognised such claims, the value of that ownership was diminished.
By 1991 the presence of minerals on or under land conferred no value on
the owner, unless the right to mine in respect of those minerals was also
vested in the owner of the property. Even then the value lay not in the
person‘s ownership of the land but in their being the holder of the mineral
rights. As Heher JA put it in Holcim:124
‗Under the Minerals Act 1991, (and previous to that Act) it was the mining
authorisation which conferred practical value on the mineral rights by authorising the
exercise of those rights.‘

[71] The value of mineral rights at any time lay first in the anticipation
that minerals in payable quantities were to be found on the property, and
second in the anticipation that under the then current system in terms of
which the State controlled the right to mine an appropriate permit, licence
or authorisation would be obtained. This situation pertains whenever
parties are negotiating a price pursuant to a possible sale or where, for a
purpose, such as rating, estate duty, compensation on expropriation or the
like, the market value of property must be assessed. The owner contends
that the land has potential for use for particular purposes that enhance its
value. The prospective purchaser or valuer will assess the likelihood of
the land being usable for that purpose. Often the potential use will require
some form of authority from a public authority.125 If so the likelihood of
the public authority granting that authority will affect the value of the
property.

[72] Accordingly the value of mineral rights will have ebbed and
flowed over time with every adaptation of the statutory scheme for the

124 Para 37.
125 See for example the discussion of this issue in Port Edward Town Board v Kay 1996 (3) SA 664
(SCA) at 674I-682H.

allocation of the right to mine. Prior to 1922 in the Transvaal the right to
mine for minerals other than gold, silver and quicksilver included the
right to mine for platinum. When platinum was proclaimed to be a
precious metal under the 1908 Gold Law any value ascribable to the
presence of platinum attaching to a right to mine base minerals in the
Transvaal would have declined. When the 1967 Act made mining leases
the key feature of the allocation of the right to mine, rights held under
different forms of mineral rights would have diminished in value, save to
the extent that they were preserved or could be converted into mining
leases. Agri SA‘s argument necessarily implies that each of these changes
involved an expropriation of mineral rights and would, if the present
constitutional protection had then existed, have resulted in compensation
being payable for the loss of the rights in question. But that comes close
to saying that any action that detrimentally affects the value of a right is
an expropriation, which is certainly not correct.

[73] The second point is that changes in the statutory system for the
allocation of the right to mine will affect those who have already received
permits, licences or authorisations under the current system differently
from those who merely have the right to apply for such permits, licences
or authorisations, but have not yet done so. Where rights have been
exercised, changes in the statutory system may detrimentally affect the
activities being conducted pursuant to the exercise of those rights. In the
latter case what is affected is the ability in the future to exercise those
rights by applying for a permit, licence or authorisation on an exclusive
or preferential basis. The difference is well illustrated by cases dealing
with the effect of statutory amendments on accrued rights in the context
of applications for permits or licences. Where an application has already
been lodged, a right to have it considered and decided in accordance with

the current licensing regime may arise. However, people who could have
made an application under the earlier regime, but did not do so and are
excluded under the new regime, have no cause for complaint.126 Applying
those principles in the present case the holders of unused mineral rights
could not complain that they had an accrued right to apply for an
authorisation to mine under the 1991 Act. Their entitlement to make such
an application was removed by the repeal of that Act. Of course that does
not provide an immediate answer to the question whether their mineral
rights have been expropriated, but it illustrates the fact that those who had
exercised their entitlement under the 1991 Act to obtain an authorisation
stand in a different position to those who had not. In turn that undercuts
the contention that in considering whether their mineral rights have been
expropriated they can be treated as being similarly situated.

What happened in 2002?
[74] The relevant provisions of the MPRDA were set out earlier in
paragraphs 8 and 9. The right to mine is now to be allocated to persons
who apply for that right in accordance with the provisions of the
MPRDA. No preference is given to the owner of land or the previous
holders of mineral rights, although they can compete with everyone else
for the allocation of a prospecting or mining right or a mining permit
under the MPRDA. Existing mineral rights are relevant only in relation to
the transitional provisions of the MPRDA contained in Schedule II. The
way in which they are dealt with depends on whether they had been
exercised under the 1991 Act or whether they had not. These provisions
need to be examined.

126 Director of Public Works & another v Ho Po Sang & others (1961) 2 All ER 721 (PC); Natal Bottle
Store-keepers and Off-sales Licences Association v Liquor Licensing Board for Area 31 & others 1965
(2) SA 11 (D); Industrial Council for the Furniture Manufacturing Industry, Natal v Minister of
Manpower and Another 1984 (2) SA 238 (D).

[75] In item 1 of Schedule II the following definitions appear:
‗―holder‖ in relation to an old order right, means the person to whom such right was
or is deemed to have been granted or by whom it is held or is deemed to be held, or
such person‘s successor in title before this Act came into effect;
―Minerals Act‖ means the Minerals Act, 1991 (Act No. 50 of 1991);
―old order mining right‖ means any mining lease, consent to mine, permission to
mine, claim licence, mining authorisation or right listed in Table 2 to this Schedule in
force immediately before the date on which this Act took effect and in respect of
which mining operations are being conducted;
―old order prospecting right‖ means any prospecting lease, permission, consent,
permit or licence, and the rights attached thereto, listed in Table 1 to this Schedule in
force immediately before the date on which this Act took effect and in respect of
which prospecting is being conducted;
―old order right‖ means an old order mining right, old order prospecting right or
unused old order right, as the case may be;
―unused old order right‖ means any right, entitlement, permit or licence listed in
Table 3 to this Schedule in respect of which no prospecting or mining was being
conducted immediately before this Act took effect.‘

[76] The statutory old order rights referred to in these definitions are
derived from the mineral rights that existed under the 1991 Act. That is
apparent from Tables 1, 2 and 3 to Schedule II. Depending on the nature
of the previous right it translated into either an old order mining right, or
an old order prospecting right or an unused old order right. I accept, as
this court held in Holcim, that these are new statutory rights not merely
the previous rights under a different guise. However, the argument
presented by Agri SA is that not only were common law mineral rights
destroyed by the MPRDA, but that, in substance, those rights have been
acquired by the State. In paragraph 24 I made the point that in order to
determine whether there has been either a deprivation of rights held by

the holders of mineral rights or an acquisition of those rights by the state
it is first necessary to consider the nature of mineral rights. The next step
in the analysis must be to compare the position of holders of mineral
rights in terms of those rights and their position after the changes brought
about by the MPRDA. That deals with the issue of deprivation. Then the
position of the state insofar as the rights it held before and after the
enactment of the MPRDA must be considered in order to determine the
issue of acquisition.

[77] The holder of an old order prospecting right was dealt with under
item 6 of the Schedule, which is headed ‗Continuation of old order
prospecting right‘. Under item 6(1) the old order right continued for two
years. In other words for two years a person who held one of the rights
falling within the concept of an old order prospecting right continued to
enjoy precisely the same rights they had enjoyed under the 1991 Act,
save that they were unable to transfer their old order prospecting right to
a third party as they had been able to do previously. During the period of
two years they were entitled, but not obliged – they were free to allow the
right to lapse if they wished – to lodge the right for conversion in terms of
item 6(2) and the Minister was obliged to convert the right into a
prospecting right under the MPRDA. The process of conversion was
straightforward. Once the holder of the old order prospecting right
complied with the requirements of item 6(2) the Minister was obliged
under item 6(3) to convert the old order right into a prospecting right
under the MPRDA. In terms of s 5(1) of the MPRDA, such a prospecting
right is a limited real right entitling the holder to prospect on the land to
which it relates subject to the conditions attaching to that right. The right
endures for the period provided in s 17 of the MPRDA and is subject to
renewal in terms of s 18 of the MPRDA.

[78] The position in respect of those mineral rights existing under the
1991 Act that were translated into old order mining rights in terms of
Schedule II was similar. They were dealt with under item 7, which this
court analysed in Holcim. It is unnecessary to repeat that analysis. Unless
the right was abandoned the holder of the old order right would convert it
into a mining right under the MPRDA with all the advantages flowing
from such right as set out in s 5, read with ss 23 and 24, of the MPRDA.
The intention was, as Heher JA said in Holcim127 to achieve ‗the seamless
continuation of existing mining operations which are tested … by the
scope of the licence pursuant to which the operations were being
conducted‘. The same was true of prospecting activities under the 1991
Act.

[79] Unused old order rights were dealt with under item 8 of the
Schedule. These rights were continued for a period of one year only.
During that year item 8(2) gave the holder of such rights ‗the exclusive
right to apply for a prospecting right or a mining right, as the case may
be‘ in terms of the provisions of the MPRDA. Accordingly the holder of
such rights instead of having the exclusive right to apply for an
authorisation to exercise such rights, as was the case under the 1991 Act,
was given an exclusive right to apply for either a prospecting right or a
mining right under either s 16 or s 22 of the MPRDA. The consideration
of any such application then followed the procedures prescribed under the
MPRDA and the application was dealt with and disposed of under the
MPRDA. If a right was granted the holder of the new right would be in
the same position as a person who had converted an old order prospecting
or mining right as the case might be.

127 Para 26.

[80] The operation of Schedule II served to provide former mineral
rights holders, who had already started to exploit those rights, with rights
that enabled them to a greater or lesser extent to continue to engage in the
activities that they were engaging in under the 1991 Act. It is correct that
the allocation of the right to mine was now entirely at the disposal of the
State acting through the agency of the Minister, with the holder of
mineral rights no longer enjoying any preferent or exclusive right to such
an allocation, but the transitional provisions resulted in those who had
been allocated a right to mine under the 1991 Act and exercised it
continuing to enjoy it under the new dispensation. It is so that the terms
upon which they did so would have altered to some extent, but they
remained in possession of the right either to prospect or mine for, and in
the later case to dispose of, minerals as before. Those with unused rights
were afforded the opportunity to exercise those rights but would lose
them if they did not exercise that opportunity. It is against that
background that I turn to deal with the third question raised by this case
namely whether the MPRDA expropriated mineral rights.

Was there an expropriation of mineral rights?

[81] It is helpful at the commencement of this part of the judgment to
remind oneself of the full ambit of the contention that is being advanced
by Agri SA. It is that all mineral rights in existence under the 1991 Act at
the time the MPRDA came into operation were expropriated under that
Act. Central to this is the contention that the rights were taken away from
the holders of those rights and in substance vested in the Minister as
representative of the State. At the heart of those mineral rights and central
to all of them is the right to mine in the sense I have used it throughout

this judgment as the right to prospect and mine and dispose of the
minerals extracted from mining. I start therefore by considering what has
happened in regard to the right to mine under the MPRDA.

[82] Agri SA‘s argument is based upon the hypothesis that mineral
rights were common law rights and that extensive common law rights
were taken away and replaced by lesser statutory rights in the gift of the
Minister. This was the approach adopted by the trial court, no doubt
because it was the approach adopted by counsel. However, as I have
endeavoured to show, that is an incorrect characterisation of the right to
mine that lies at the heart of the debate. A convenient shorthand
terminology, useful in the sphere of the type of disputes that our courts
had over the years to deal with in cases involving mining and minerals,
has been erroneously construed as identifying the source of mineral
rights. It is on that basis that it is said that the right to mine flows from the
common law and has been expropriated.

[83] This contention is not borne out on analysis, whether one‘s starting
point is the common law or the history of mineral rights in South Africa.
Taking the common law as the starting point it is said to be founded in
the cuius et solum principle. However, that principle has no application
once mineral rights are severed from the ownership of the land to which
they relate. That severance was not effected by the common law. It came
about in the first instance through the legislation that required the
contracts embodying personal rights to prospect or mine for minerals to
be registered. Then the courts construed the resulting registered rights as
real rights separate from the dominium of the land. Their separate
character was preserved in subsequent legislation dealing with mining

and with the registration of mineral rights. One cannot then ascribe the
origin of separated mineral rights to the workings of the common law.

[84] Looked at from the perspective of the history of mining legislation
in South Africa, that history demonstrates that it has been the policy of
successive governments, be they colonial, those of the old republics, the
union government or the former regime in South Africa before the advent
of democracy, that the State controlled the right to mine and its exercise.
In other words the State has always asserted that in its broad sense, as
opposed to the narrower use of the word in relation to rights enjoyed by
individuals, the right to mine is vested in the State and that the State
either exercises or allocates that right.128 The manner in which this has
been done has varied down the years, but the central philosophy in regard
to control by the State has been consistent.

[85] It seems to me that the key issue is not whether, as a result of the
exercise of the power to allocate the right to mine, that right was placed
in the hands of persons in the private sector, which is inevitable unless the
mines are nationalised. It is rather whether the right vested in the State,
along with the power to allocate the right to others, or whether it vested in
individuals arising from their ownership of land or some other private
source. In my view it was the former. That being so the MPRDA is
merely the latest in a long line of legislation and statutory instruments in
South Africa that affirms the principle that the right to mine is controlled
by the State, and allocated to those who wish to exercise it. The right to
mine remains, as it has always been, ever since mining became an
important part of the economy of South Africa, under the control of and

128 It is in this sense that I understand Professor Dale to refer to the right to mine being vested in the
State. It is also the sense in which I understand Professor Barton to use it in describing comparative
legislative systems.

vested in the State, which allocates it in accordance with current policy.
That being so the first requirement of an expropriation, namely that there
be a deprivation of property, is not established insofar as the right to mine
is concerned. That right was never vested in the holders of mineral rights,
but was vested in the State and allocated to those holders in accordance
with the legislation applicable to it from time to time. It could not
therefore be expropriated although rights flowing from the State‘s
allocation of the right to mine could.

[86] Whether this involves the incorporation into South African law of
elements of the public trust doctrine that has some application in the
United States of America seems to me neither here nor there. Nor do I
think it necessary to try and extract additional meaning from the
provisions of the MPRDA that describe the State as the custodian of
South Africa‘s mineral and petroleum resources and say that these belong
to the nation. Once it is accepted that the State is vested with the right to
mine and is able to allocate that right in relation to the country‘s mineral
resources, it is I think clear that the State is exercising sovereignty over
those resources. That the State must exercise its powers on behalf of the
nation goes without saying in a constitutional democracy. The statements
that the mineral and petroleum resources of the country ‗belong to the
nation‘ and that the State is the custodian of these resources, encapsulate
in non-technical language the notion that the right to mine vests in the
State. There is nothing to be gained by attempts to dissect these concepts
and categorise them in terms of private law concepts such as ownership.
It suffices to say that recognising that the right to mine is vested in the
State is wholly in accordance with these statements.

[87] Accepting that the right to mine has remained vested in the State,
and that the mineral rights that existed prior to 2004 are no more, is there
any other basis upon which the contention of a wholesale expropriation of
mineral rights can be sustained? The trial court approached the matter by
way of a before and after comparison of the position of holders of mineral
rights. That was premised on the proposition that the right to mine vested
in the mineral rights holder by virtue of the inherent nature of those rights
rather than as a result of a statutory allocation of the right to mine. The
first difficulty is that the premise is faulty. The second, arising from the
before and after approach, is that one is not then comparing a lost
common law right with a statutory grant. The comparison is between two
statutory grants, namely the rights enjoyed under the previous statutory
dispensation and those enjoyed under the present dispensation.

[88] Reference to the transitional provisions demonstrates that this
alternative approach cannot assist Agri SA. The preamble to the MPRDA
reaffirms ‗the State‘s commitment to guaranteeing security of tenure in
respect of prospecting and mining operations‘. Section 2(g) of the
MPRDA identifies one of its objects as being to ‗provide for security of
tenure in respect of prospecting, exploration, mining and production
operations‘. Item 2 of Schedule II repeats this as being one of the objects
of the transitional provisions and records that one of its aims is to give to
holders of old order rights ‗an opportunity to comply with this Act‘,
which it seeks to achieve by way of the provisions summarised in
paragraphs 76 to 78. These provisions make it clear that the rights that
former mineral rights holders received as a result of the conversion of
their old order rights overlapped to a large extent with those they
previously enjoyed.

[89] This reality was highlighted by counsel when he submitted that the
large mining houses had not brought claims under item 12(1) because
they had suffered no loss. However, the reason they suffered no loss is
because, subject no doubt to some variation, they continued to enjoy the
same or similar rights to those they held prior to the MPRDA coming into
operation. That accords with what Du Plessis J said in paragraph 81 of his
judgment in the trial court, namely that the prospecting and mining rights
granted under the MPRDA are ‗a real right with substantially the same
content as the rights the holders of quasi-servitudes had before the
MPRDA‘. If one uses the mining houses as an example and asks whether,
once the MPRDA came into operation, they continued to enjoy, by way
of an allocation from the State, the right to mine, to extract minerals and
dispose of them, the answer would be in the affirmative. Reference to the
reports of the companies listed in the resource sector of the JSE would
reveal that this was the case. That being so, the MPRDA can at most have
deprived them of some part of the mineral rights they previously
possessed. Prior to 1 April 2004 they were mining in terms of their
mineral rights and authorisations granted under the 1991 Act. From
1 April 2004 they were mining in terms of old order mining rights in
terms of Schedule II. After conversion they continued mining, but in
terms of mining permits issued under the MPRDA. I find it impossible to
say in the light of the continuity of their mining activities that they were
at any stage deprived of their right to mine. It is true that the source of the
right is now different but the substance is the same.

[90] The entitlement of holders of old order prospecting and mining
rights to convert their rights into prospecting and mining rights in terms
of the MPRDA is destructive of the contention that the content of the
mineral rights translated into old order rights was removed by the

MPRDA. The aim was to afford security of tenure and that was largely
achieved by the mechanism of translating existing mineral rights into old
order rights and providing for their conversion. I accept that the rights
now enjoyed may not be precisely the same as those previously enjoyed.
That means no more than that some part of the rights previously enjoyed,
or some components of those rights when viewed as a whole, have been
removed. It is not, however, compatible with the wholesale removal of
the content of mineral rights. Nor is it compatible with the substantial
content of mineral rights having vested in the Minister. Accordingly both
elements of an expropriation – deprivation and acquisition – are absent.  I
do not exclude the possibility that some holders of rights may be able to
advance a case that, because of their own particular circumstances, there
has been an expropriation of some or all of the rights they previously
enjoyed. However, we are not concerned with such a case but with a
contention that there was a blanket expropriation of mineral rights. That
case cannot be sustained in the light of the transitional provisions.

[91] I have borne in mind that there are no longer any mineral rights, in
the previously understood sense, that are capable of transmission to
others without involvement from the side of the state. That does not assist
Agri SA‘s argument. If existing rights have been converted into
prospecting or mining rights under the MPRDA they are capable of being
transferred, although this requires ministerial permission.129 If they have
not been converted then it is the absence of the rights themselves, rather
than the absence of transmissibility, that is the source of loss. The fact
that the transmissibility of rights under the new dispensation is restricted
does not support the notion that there has been a deprivation of rights, in
the absence of evidence indicating how this impacts on the value of the

129 Section 11.

newly acquired rights. A substantial, if not the major, portion of mining
in South Africa is undertaken by large companies. If the mine is valuable
the company exploiting it will not want to give up their mining right.
When a transfer is sought it must be granted provided the transferee is
capable of carrying out its obligations under the right and satisfies the
requirements set out in the MPRDA for the allocation of such a right
initially. It may transpire that in practice there is little difficulty in
transferring rights in the new dispensation. If it presents a problem there
may be commercial means of circumventing the difficulty. I am unable to
see that the issue of transmissibility of rights has a bearing on the
question whether all mineral rights have been expropriated. Nor do I
think that new provisions in regard to the duration of rights affects
matters. Rights may now be of a fixed duration rather than indefinite, but
they are renewable and whether their duration matters will depend upon
how long it will take to mine them to exhaustion. Furthermore, as
Professor Mostert points out,130 rights obtained on conversion may endure
for longer than the rights that were held before.

[92] The foregoing analysis demonstrates that the situation of different
holders of mineral rights will differ, depending upon whether they
converted their old order rights and the result of conversion. In some
instances advantages may flow to one party from a conversion of rights as
the facts of Xstrata & others v SFF Association illustrate. On the other
hand, as Xstrata, the recipient of the advantage, urged upon the court, that
may have been a situation where there was an expropriation. I do not
suggest that this was necessarily the case, but mention it to illustrate the
point that different factual circumstances may warrant different
conclusions on the issue of expropriation. Similarly, the fact that the

130 Mostert, supra, 99.

owner of land may no longer be able to prevent the exploitation of
minerals on their property may be a considerable burden for a farmer who
wishes to preserve the land for farming purposes, but may be of little
concern, save for the lack of financial benefit flowing from these
activities, to another landowner. The point is that each mineral rights
holder will have been affected differently by the advent of the MPRDA.
That is inconsistent with the notion of a blanket expropriation of all
mineral rights.

[93] In the trial court the judge concluded on this aspect of the case that:
‗From a reading of sections 3 and 5 it is apparent that, when the MPRDA commenced
the State, acting through the Minister, was vested with the power to grant rights the
content of whereof were substantially the same as, and in some respects identical to,
the contents of the quasi-servitude of the holder of mineral rights. It follows that, by
enactment of the MPRDA, the State acquired the substance of the property rights of
the erstwhile holders of quasi-servitudes. The fact that the State‘s competencies are
collectively called custodianship does not matter.‘

[94] I respectfully disagree. The entire structure of the transitional
provisions of the MPRDA was directed at securing that the holders of
mineral rights would continue to enjoy broadly the same rights under the
new mining dispensation once those rights were translated into old order
prospecting and mining rights and converted under the MPRDA. The
process of converting those rights was largely formal and the Minister
was obliged to convert, provided the rights holder complied with the
limited and objective requirements for conversion. The rights acquired on
conversion were not acquired in consequence of an exercise of the
Minister‘s power to grant rights under ss 17 and 23 of the Act. They were
acquired because the MPRDA made specific provision in Schedule II for
their continued enjoyment by the holders of mineral rights through the

process of conversion. In substance the rights remained largely the same,
albeit with a different provenance. The fact that the MPRDA conferred
upon the Minister the power to grant such rights to new applicants in
respect of properties where no such rights exist, does not mean that in
relation to existing prospecting and mining rights they were taken away
from holders of mineral rights, acquired by the Minister and then granted
again to the original holders. The conversion process provided the means
whereby in substance existing mineral rights holders retained the
entitlements they previously had subject to some variation, the
importance of which would vary from case to case. They were neither
deprived of their rights nor were the rights they previously enjoyed
acquired by the State in the person of the Minister.

[95] That conclusion is fatal to the contention that the MPRDA
expropriated all so-called common law mineral rights. It plainly did not
do so in respect of existing prospecting and mining rights that were being
used. It is appropriate, however, to consider whether it effected a
narrower expropriation of all unused mineral rights, into which category
Sebenza Mining‘s rights fell. In the trial court, whilst confining himself to
the coal rights of Sebenza Mining, the reasoning of Du Plessis J involves
upholding the broad submission that the MPRDA expropriated all
mineral rights. However, in his judgment at the exception stage of this
case131 Hartzenberg J appears to have approached the matter on a
narrower basis that all the rights translated into unused old order rights, as
specified in Table 3 to Schedule II, were expropriated.

[96] Hartzenberg J referred to common law rights in the same fashion as
they were referred to at the trial. He then analysed item 8 that provides

131 Footnote 3, supra.

for the conversion of unused old order rights. He correctly said that the
application for conversion was one in terms of either s 16 or s 22 of the
MPRDA and drew attention to the fact that under the 1991 Act there
would have been no compulsion on holders of such rights to seek
authorisations to exploit them. They were free to let them lie fallow.
Under the MPRDA they either had to apply for their conversion or lose
them entirely. Such an application was not a formality and not all
applications would succeed. Leaving on one side his erroneous view that
item 12(1) by necessary implication recognised that an expropriation had
occurred, Hartzenberg J said that, apart from the transitional provisions,
mineral rights were not recognised in the MPRDA and concluded that
item 8 was no more than a means of mitigating loss and did not prevent
there from being a deprivation of existing mineral rights and their
acquisition by the State.

[97] I agree that item 8 proceeds on a different footing from items 6 and
7, which deal with rights that were already being exploited when the
MPRDA came into operation. I agree also that it forced the holders of
such rights to decide whether to try and make use of them on penalty of
deprivation. However, that was only a more stringent approach by the
State to compel holders of mining rights to exploit them than that adopted
in previous legislation. My difficulty is with the proposition that item 8
was merely a means whereby holders of unused old order rights could
mitigate the loss they had already suffered in consequence of an
expropriation of their rights. That overlooks the consequence of a holder
of such rights successfully applying for either a prospecting or a mining
right as contemplated in item 8. In that event they would hold greater
rights than they had enjoyed under the 1991 Act. Under the earlier Act
their unused rights would only have been of value to the extent that they

were capable of being exploited by way of an authorisation to prospect or
mine and the holders of such rights had an exclusive right to obtain that
authorisation. Under item 8 they not only retained that preference for a
year, but would acquire more extensive rights if they sought and obtained
a prospecting or mining right. The imposition of a time limit did not
deprive them of their rights. A failure to apply for a right to exercise them
would.

[98] Hartzenberg J also attached some weight to the fact that applicants
seeking to proceed under item 8 would have to pay a fee; undertake an
environmental impact assessment and satisfy the Minister that they had
access to adequate funds to prospect or mine. However that overlooks the
fact that in terms of s 9(3)(a) and (c) of the 1991 Act an applicant for an
authorisation to mine would have had to satisfy the Minister in regard to
the manner and scale of the proposed operations and their ability to mine
optimally as well as their ability to rehabilitate the surface after
exhausting the minerals being mined. In terms of s 39 of the 1991 Act
they would have had to submit an environmental management
programme. It is by no means clear that there would have been a great
deal of difference between the two situations. Similarly it is not clear that
there would be any great difference between an application for a
prospecting authorisation under s 6 of the 1991 Act and an application for
a prospecting permit under s 16 of the MPRDA. I do not think that these
issues have any impact on the question whether the MPRDA effected an
expropriation of those mineral rights that were translated into unused old
order rights.

Conclusion

[99] It is as well at the conclusion of a lengthy judgment to summarise
what it decides and make it clear what it does not decide. What it decides
is that the right to mine in South Africa, in the sense of the right to
prospect and mine for minerals and extract and dispose of them, is vested
in the State. It is allocated by the State in accordance with policies that
are determined from time to time and embodied in the applicable
legislation. The MPRDA is the current iteration of that right. The
contention that all mineral rights that existed in South Africa under the
1991 Act were expropriated under the MPRDA is incorrect. The
judgment does not exclude the possibility that the MPRDA may have
effected an expropriation of certain rights that existed under the previous
dispensation, but holds that whether it did so depends not on any general
expropriation of mineral rights, but on the facts of a particular case. Nor
does it decide that the effect of a broadly regulatory statute cannot be to
effect an expropriation, but leaves that open for the future. In fact the
judgment is not concerned with the regulatory impact of the MPRDA as
opposed to its substantive treatment of the right to mine. I do not find it
helpful to pose the issues in this case as being ‗regulatory vs
expropriatory‘.132  In my view the right to mine, as opposed to its
allocation, is not a regulatory matter, but a matter of the substantive
powers of the State in contrast to private law rights to property.

[100] That means that the judgment in favour of Agri SA must be set
aside. It is unnecessary in those circumstances to express any view on the
assessment of the amount of compensation awarded by the trial court.
There was an issue over the wasted costs occasioned by an amendment
brought by the Minister at the close of her case. This compelled Agri SA

132 It is here that I part company from Professor Mostert in her analysis in Chapters 6 to 8, which
locates the right to mine within a regulatory framework for mining.

to call additional witnesses and incur additional costs. The Minister did
not dispute that a separate order should be made in terms of which she
should be responsible for these wasted costs but suggested that they be
fixed as the costs of one day of the trial. In my view it is more appropriate
to leave that issue to the taxing master.

[101] In the result the following order is made.
The appeal is upheld with costs, such costs to include those
consequent upon the employment of two counsel.
The order of the court below is set aside and replaced by the
following order:
‗(a) The plaintiff‘s claim is dismissed with costs, such costs to
include those consequent upon the employment of two counsel, but
excluding all costs incurred in respect of or relating to the
amendment referred to in paragraph (b) below.
(b) The defendant is ordered to pay the plaintiff‘s wasted costs,
including the costs consequent upon the calling of witnesses and
the hearing of evidence, occasioned by its application to amend its
plea on 8 March 2011, such costs to include those consequent upon
the employment of two counsel.‘

M J D WALLIS
JUDGE OF APPEAL

NUGENT JA (MHLANTLA JA concurring)

[102] I have read the judgment of my colleague and I agree with the
orders that he proposes. However, I reach my conclusion along a slightly
different path and I find it necessary to set out my approach to the matter
briefly.

[103]  The mineral rights that are in issue in this appeal are mineral rights
on private land that were not being exploited, and in respect of which no
authorisation to prospect for and to mine the minerals had been issued, at
the time the MPRDA took effect – what are referred to in the Act as
‗unused old order rights‘. Although the argument advanced on behalf of
Agri SA was said by its counsel to apply as much to ‗old order rights‘
that were being used when the Act took effect, nonetheless I confine
myself to unused rights, bearing in mind that holders of other rights are
not parties to these proceedings and we have not had the benefit of
hearing what they might otherwise have said.

[104] I am grateful to my colleague for his succinct yet comprehensive
analysis of the mining legislation that has existed from time to time in our
history, with which I agree. His analysis amply demonstrates that, from
the beginning of significant mining in this country, legislation has
stripped the right to prospect for and to mine minerals from such common
law rights as owners of land might have had. What remained of that
common law right after they had been stripped – if anything remained at
all133 – was only the right to the minerals while they were in situ under
the ground.

133   At least some of the legislation might be construed as extinguishing common law mineral rights
altogether, and conferring upon the owner an equivalent statutory right to the minerals in situ, at least

[105] My colleague has pointed out that the right to minerals in situ is of
no value unless they are capable of being turned to account. Throughout
its history the legislation has consistently recognised that the holders of
mineral rights should enjoy at least some of the bounty. At times the
holder was given the right to exploit part of the mineral deposit while the
remainder was made available for exploitation by others. At times the
holder was given at least a preference when the rights were allocated.
And even where the right to prospect and mine was allocated to others the
holder of the mineral rights was usually given some of the fruits by way
of royalties or rentals or a portion of the license fees. It was the potential
that they offered to secure those benefits – whatever form the benefits
took at various times – that gave mineral rights their value. Without some
potential of that kind there is no market for mineral rights and they exist
as no more than a curiosity.

[106] But in whatever way the holders of mineral rights reaped benefit
from the minerals over the years, that has been the product of
contemporary legislative policy, dictated by political imperatives from
time to time, and not of the mineral rights themselves. If they have
always been of value that is only because it has always been government
policy to give them the potential for being turned to financial account.

[107] The policy of affording the holder at least some benefits from
exploitation of the minerals – which were features of all legislation until

by implication.  Whether the right of owners to the minerals in situ is a remnant of their common law
right, or whether it is itself a right conferred at various times by statute, is nonetheless not material to
this appeal.

then – was carried through to the Mining Rights Act 20 of 1967.  In
general, it was the holder of the mineral rights who would be allocated
the benefit of exploiting them, at least as a matter of preference, but the
state nonetheless retained the right to allocate them elsewhere,
particularly to prevent them being hoarded or sterilised to the detriment
of the country. Thus s 15(1) allowed the Minister of Mines, if he had
reason to believe that adequate prospecting operations may prove the
existence of minerals, to call upon the holder of the mineral rights to
commence prospecting or to cause prospecting to commence, failing
which the Minister was entitled to authorise prospecting by third parties,
subject only to payment to the holder of the mineral rights of rental fixed
by the Minister.134 Similarly, s 33(1) entitled the Minister, where he was
satisfied that reasonable grounds existed for believing that minerals
existed on any land in workable quantities, to call upon the person who
qualified for a mining lease (generally, but not exclusively, the holder of
the mineral rights), to apply for such a lease, failing which he was
deemed to have abandoned his right to the lease, which entitled the
Minister to grant a mining lease to others.135

[108] I attach greater significance than my colleague to the effect of the
Minerals Act 50 of 1991. It seems to me to have departed in some
respects significantly from what had gone before, particularly so far as
the hoarding and sterilisation of unused mineral rights was concerned,
which are the rights now in issue. The extent to which anti-sterilisation
provisions of earlier legislation had been called upon in the past is not
material. Poised as the country was on the brink of a new dispensation, in

134   Section 15(1) read with s 15(3).
135   Section 35 read with s 42.

which access to land and natural resources was destined to come to the
fore, provisions of that kind could be expected to assume significance, no
matter the extent to which it had been necessary to call upon them before.

[109] So far as the allocation of exploitation rights is concerned the
material provisions of the 1991 Act were simple and stark. Section s 5(1)
allowed the holder of mineral rights, or any person who had his consent,
but no others, to prospect for and to mine the minerals, subject to state
authorisation being given. And while state authorisation could be
withheld, where it was given ss 6(1) and 9(1) allowed it to be given only
to the holder of the mineral rights, or to a person who had his consent,
with some exceptions for rare occurrences that are not significant136.
Almost without exception the ability to exploit the mineral wealth of the
country was placed in the exclusive control of the holders of mineral
rights. As for the hoarding and sterilisation of mineral rights, far from the
state‘s considerable remedies under the 1967 Act and earlier legislation,
its only remedy under the 1991 Act was to expropriate the relevant land,
or to ‗expropriate‘ the mineral rights (a misnomer) – which the Minister
was permitted to do if he deemed it necessary in the public interest137 –
against payment of compensation to the holder of the rights.138

[110] In those few brief provisions the 1991 parliament placed the
exploitation of minerals within the full monopoly of mineral right
holders. It retained to the state considerable power to prevent uneconomic

136   Where the holder of the mineral rights could not be readily traced, and where the person entitled to
the rights by succession had not obtained them by cession after a period of two years: s 17(1).
137   Section 24(1).
138   Compensation was payable by the person at whose request the land or rights had been
expropriated.  In the absence of agreement, it was to be determined by valuation in accordance with s
12 of the Expropriation Act 63 of 1975 (s 24(1).

or environmentally damaging exploitation, by requiring stringent
conditions to be met before authorisation would be granted,139 but so far
as exploitation might take place that could be done only with the consent
of the mineral-right holder.

[111] There can be no doubt that the MPRDA divested unused mineral
rights of the value that they held while the 1991 Act held sway. The
thrust of the argument before us on behalf of Agri SA was that this came
about because the MPRDA extinguished the common law rights of a
mineral-right holder, and those rights, so it was submitted, included the
right to exploit the minerals. As it was put in the heads of argument, the
holder of a mineral right previously ‗did not have to apply to the state for
the right to go onto the land, search for coal, and dispose of any coal it
found‘ – those rights ‗existed as the content, at common law, of the
mineral right and were not conferred by the state granting a prospecting
permit or mining licence in terms of sections 6 and 9 of the Minerals
Act‘.

139   Section 9(1) prohibited the issue of a mining authorization unless the regional director was
satisfied  –
(a) with the manner in which and the scale on which the applicant intends to mine the mineral
concerned optimally and safely under such mining authorization;
(b) with the manner in which such applicant intends to rehabilitate disturbances of the surface
which may be caused by his mining operation;
(c) that such applicant has the ability and can make the necessary provision to mine such minerals
optimally and safely and to rehabilitate such disturbances of the surface ; and
(d) that the mineral concerned in respect of which a mining permit is to be issued  -
(i)
occurs in limited quantities in or on the land or in tailings, as the case may be,
comprising the subject of the application; or
(ii)
will be mined on as limited scale; and
(iii)
will be mined on a temporary basis; or
(e) that there are reasonable grounds to believe that the mineral concerned in respect of which a
mining licence is to be issued –
(i)
occurs in more than limited quantities in or on the land or in tailings, as the case may
be, comprising the subject of the application; or
(ii)
will be mined on a larger than limited scale; and
(iii)
will be mined for a longer period than two years.‘

[112] That the MPRDA extinguished common law rights – such as they
were – seems to me to be plain. Item 8(4) of Schedule II says as much in
providing that
‗subject to subitems (2) and (3)140 an unused old order right ceases to exist upon the
expiry of the period contemplated by subitem (1)‘ [that is, one year after the Act came
into operation].
An ‗unused old order right‘ is defined in Table 3 of Schedule to include
‗common law‘ rights.

[113] But I do not agree, for reasons I have given, and that are expressed
more comprehensively in the judgment of my colleague, that the
‗content‘ of such common law rights included rights of exploitation, as
submitted on behalf of Agri SA. Since the commencement of significant
mining those have always been statutory rights granted in the gift of the
state, their grant being restricted by the 1991 Act to holders of the mineral
rights.

[114] In those circumstances the abolition by the MPRDA of ‗common
law rights‘ seems to me to be immaterial. Even without their abolition the
holder of mineral rights would have been in the same position. The
provisions of the MPRDA that have brought about the loss of their value
are not those that abolish common law rights but instead ss 16, 17, 22 and
23. Sections 16 and 17 deal with applications for and the grant of
prospecting permits respectively. Sections 22 and 23 deal with
applications for and the grant of mining authorizations. I do not find it

140   Those subitems are not now material

necessary to set out the terms of those sections. It is sufficient to extract
from them a feature that they have in common.

[115] Under those sections the grant of prospecting and mining
authorisations is not confined to the holders of the mineral rights or those
that have their consent – as it was under the 1991 Act. They might be
granted to anybody, provided only that they satisfy various stipulated
conditions.141 The holding of mineral rights is no longer the gateway to
the exploitation of minerals and it is for that reason that the mineral rights
have ceased to have value. Indeed, the draftsman of the MPRDA might
just as well not have extinguished common law rights at all, for the
difference that it makes. Once they became irrelevant to the exploitation
of minerals – as ss 16, 17, 22 and 23 have made them – they existed in
any event as no more than a curiosity. In short, it was the extinction of the
monopoly that had been conferred upon holders of mineral rights by ss 6
and 9 of the 1991 Act – brought about by ss 16, 17, 22 and 23 – that
caused mineral rights to lose their value, not the extinction of the rights
themselves.

[116] Whether the extinction of ‗common law rights‘ by the MPRDA
constitutes an ‗expropriation‘ of those rights, as contended for by Agri
SA, thus seems to me to be an abstract question that has no practical
bearing on their claim. Such value as it has lost, for which it claims
compensation, did not lie in its common law rights, but it lay instead in
the exclusive ability to exploit those rights that was conferred by the
earlier legislation. If any question of expropriation arises at all it seems to

141   For example, that they have the financial resources and technical capacity to prospect or mine, as
the case may be.

me the question is whether the extension to others of a statutory right that
holders of mineral rights had previously enjoyed exclusively constitutes
an expropriation.

[117] My colleague has dealt extensively with what is meant by
‗expropriation‘ in the MPRDA and I need not repeat what he has said. I
can see no basis upon which to find that the extension to others of
exploitation rights that were earlier within the exclusive control of
mineral-right holders constitutes a deprivation of property. Those rights
of exploitation did not exist as elements or characteristics of the mineral
rights – what counsel for Agri SA called the ‗content‘ of the mineral
rights. The holding of mineral rights did no more than to identify upon
whom the legislature had chosen to bestow its gift. So far as it created a
monopoly in doing so I cannot see that the statutory monopoly
constituted a property right. By choosing to bestow its gift anew in 2002
parliament did not deprive the holders of mineral rights of property – it
deprived them of value that had accrued to their property by the creation
of the monopoly. While property might have value, I do not think that
value is in itself property.

[118] For those reasons I agree with the orders that my colleague
proposes.

R W NUGENT
JUDGE OF APPEAL

Appearances

For appellant:
C H J BADENHORST SC (with him M
WESLEY)
Instructed by:
The State Attorney, Pretoria and Bloemfontein

For respondent:
G
L
GROBLER
SC
(with
him
J
L
GILDENHUYS)

Instructed by:

Macrobert Attorneys, Pretoria

Claude Reid Inc, Bloemfontein.
For amicus curiae:
GEOFF BUDLENDER SC (with him MAX
DU PLESSIS and J BRICKHILL)
Instructed by:
Legal Resources Centre, Cape Town
Webbers attorneys, Bloemfontein
Supreme Court of Appeal of South Africa

MEDIA SUMMARY– JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL

From:   The Registrar, Supreme Court of Appeal

Date:  31 May 2012

Status:  Immediate

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.

Minister of Minerals and Energy v Agri SA (CALS amicus curiae)

In a test case brought by Agri SA to determine whether the
Minerals and Petroleum Development Act 28 of 2002 (the MPRDA)
expropriated mineral rights in South Africa, the SCA today upheld an
appeal by the Minister of Minerals and Energy against the judgment of
the North Gauteng High Court, in which it held that there had been such
an expropriation in respect of unused mineral rights to mine coal in
Mpumalanga and ordered the payment of compensation.
The court held that it was necessary to examine the history of
mineral rights in South Africa. When that was done it emerged that the
right to mine, that is, the right to prospect for, mine and dispose of
minerals, has always been regarded as a right vesting in the State and
allocated by the State in accordance with the policies of the day. The
MPRDA maintains this situation. The SCA held that as the right to mine
has not been taken from holders of mineral rights, and the MPRDA
afforded security of tenure by way of the transitional provisions, there has
been no general expropriation of mineral rights in South Africa.
In extending the right to mine beyond those who traditionally held
mineral rights to the community at large the monopoly previously
enjoyed by the holders of mineral rights has been terminated. This

reflects government policy to transform the mining sector. It does not
mean that there has been an expropriation of mineral rights. The court
accepted the possibility of an argument that a right had been expropriated
by the MPRDA in specific factual situations, but held that the contention
advanced by Agri SA that there had been a general expropriation of
mineral rights was unfounded. This was so whether one considered
mineral rights generally or only unused mineral rights. It accordingly
upheld the appeal and set aside the order for the payment of
compensation made by the trial court.