Originally published August 2010
The Mineral and Petroleum Resources Development Act, 2002 ("MPRDA") terminated the common law concept of ownership of mineral rights. It provides that the mineral and petroleum resources of South Africa are the common heritage of its people and that the State is the custodian of those resources.
The MPRDA's transitional arrangements created three categories of "old order rights". Old order mining rights and old order prospecting rights consist of the common law mineral right coupled with the relevant statutory authorisation to mine or prospect, where mining or prospecting were occurring on 30 April 2004. The third category is that of 'unused old order rights', comprised of the common law mineral right with or without the relevant statutory authority to mine or prospect where no mining or prospecting activities were occurring on 30 April 2004.
Since all common law rights to minerals, save for those where existing mining or prospecting operations were taking place as at 30 April 2004, would qualify as "unused old order rights", such rights form probably the largest group of old order rights. In fact, the rights to minerals under every piece of land in South Africa where no prospecting or mining was taking place on 30 April 2004 became, by virtue of the MPRDA, "unused old order rights". The holders of unused old order rights would ordinarily be the owner of the piece of land in question or, where the rights to minerals had been severed from ownership of the land, the holder of those rights.
Under the MPRDA's transitional arrangements, the holder of an unused old order right had the exclusive right to apply for a new statutory right within one year from 1 May 2004. Where the holder of an unused old order right failed to apply within the prescribed period, or where he or she applied unsuccessfully, the unused old order right ceased to exist. The principle underlying this regime has aptly been termed "use it or lose it".
The MPRDA's transitional arrangements also provide that any person who can prove that his or her property has been expropriated in terms of any provision of the MPRDA may claim compensation from the State for such expropriation.
In the case of Agri South Africa v Minister, Minerals & Energy; Van Rooyen v Minister, Minerals & Energy ("the AgriSA case"), the North Gauteng High Court held that it is possible for the holder of an unused old order right which has ceased to exist by virtue of the operation of the MPRDA to prove that such right was expropriated and that the mere fact that a holder of an unused old order right is afforded an opportunity to apply for a "new order" right did not, on its own, mean that an expropriation had not occurred.
It is accordingly possible for a holder of an unused old order right which has ceased to exist by virtue of the operation of the MPRDA, to lodge a claim for compensation for expropriation under Item 12 of Schedule II of the MPRDA. The Regulations promulgated under the MPRDA prescribe the information which must accompany such a claim and also provide that all claims must be lodged before 30 April 2011.
Because the AgriSA case was decided on exception, the court did not delve in any depth into what a person claiming under item 12 will need to prove in order to prove that he or she has been expropriated. Expropriation is, by its nature, a complex legal subject. It should also be borne in mind that some unused old order rights would be worth substantially more than others, with many being virtually without any value at all. Any person who wishes to claim compensation under the MPRDA will need to be able to prove the value of the right he or she alleges to have been expropriated by means of a valuation report prepared by a qualified geologist.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
