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Zwane seen fighting back over Mining Charter court bid

Jul 21 2017 07:39
Liesl Peyper

Cape Town – The timing of Mineral Resources Minister Mosebenzi Zwane’s intended restriction on mining and prospecting rights are suspicious and could be an attempt to neutralise a court bid to suspend the new Mining Charter.

This is the view of Nick Roodt, mining lawyer and partner at Fasken Martineau, following Zwane’s gazetting of a notice to restrict the granting of new mining licences, prospecting rights and the transfer of existing rights between mining companies. 

“The timing of the gazette is certainly suspicious,” Roodt said. “It suggests an attempt to neutralise the effect which the anticipated interdictory application launched by the chamber may have. The chamber’s interdict, if successful, would mean that Mining Charter 2 would continue and applications would be assessed in terms of that charter. The effect of the restriction would be that, notwithstanding such interdict, new applications would be halted.”

In the notice, published in the Government Gazette on Wednesday, Zwane has relied on Section 49 of the Mineral and Petroleum Resources Development Act (MPRDA) in seeking to restrict the granting of new mining and prospecting rights as well as restricting the renewal and transfer of any existing rights.

READ: Zwane fires next salvo with mining restriction proposal 

“In terms of this Section,” Roodt explains, “the prohibition and or restriction of the granting of mining or prospecting rights may only happen if the minister has had regard to the national interest, the need to promote the sustainable development of the country’s natural resources and the strategic use of the mineral in question. In addition, such a prohibition or suspension must be in respect of a piece of land identified by the minister.”

Roodt said it is debatable as to whether this “national interest” objective is met.

“Particularly in the light of the dire impact this will have on the industry. The minister’s power in terms of section 49 must also be read against his obligations insofar as they relate to the granting of mining and prospecting rights if they fulfil specified criteria,” Roodt said.

“In terms of the act (MPRDA), the minister must grant prospecting or mining rights if the applicant meets certain obligations. In this regard, he only has a limited discretion which must be exercised in good faith and within the ambit of the MPRDA.”

READ: SA and Chile dance to their own tune as miners battle policy uncertainty 

The wording of Section 49 further implies that the minister would be empowered to suspend and restrict the mining of a specific mineral for a certain period over a specific piece of land in order to properly preserve the value of a specified mineral for future generations.

Zwane, however, in his invitation in the Gazette for stakeholder comments, has not identified a specific national interest he seeks to protect, nor has he identified a mineral he wishes to strategically use. He has also not told stakeholders why this restriction will promote the sustainable development of the country’s natural resources, Roodt said.

READ: Zwane on Mining Charter: Business should stay out of governing 

“Perhaps most glaringly, he has failed to identify a piece of land or a period of time over which the restriction will operate."

Zwane’s latest notice is already facing a legal challenge from the Chamber of Mines, which said in a statement it will request the minister to withdraw the notice. If he doesn’t agree, the body will approach the courts for an interdict to suspend and review the notice.

The chamber is launching a number of court actions in the coming months: its court application to have the Mining Charter suspended will be heard in September, while the application for a declaratory order to get certainty on the once-empowered, always-empowered principle, will be heard in November. 

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