IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA
Case no: CCT51/2013 In the matter between:
MINISTER OF MINERAL RESOURCES First Applicant
DIRECTOR-GENERAL OF THE DEPARTMENT
OF MINERAL RESOURCES Second Applicant
DEPUTY DIRECTOR-GENERAL OF THE
DEPARTMENT OF MINERAL RESOURCES Third Applicant
REGIONAL MANAGER OF THE DEPARTMENT
OF MINERAL RESOURCES Fourth Applicant IMPERIAL CROWN TRADING 289 (PTY) LTD Fifth Applicant
and
SISHEN IRON ORE CO (PTY) LTD First Respondent ARCELORMITTAL SOUTH AFRICA LTD Second Respondent
ICT’ WRITTEN SUBMISSIONS IN REPLY IN TERMS OF RULE 19(6)(c) READ WITH RULE 20(4)
A INTRODUCTION
1. ICT persists with its contentions in its application for leave to appeal and its written submissions filed in respect thereof.
2. ICT responds herein to certain of the submissions made on behalf of the Respondents. ICT’s failure to respond in reply to each end every contention by the Respondents is not a concession of the correctness thereof and same will be dealt with fully in oral argument at the hearing on 3 September 2013.
B AD SIOC’S WRITTEN SUBMISSIONS
3. During argument before the Supreme Court of Appeal, SIOC’s abandonment of its conditional cross-appeal in the Supreme Court of Appeal, was persisted with when it did not file an application in this Honourable Court, for leave to cross-appeal the dismissal of its cross- appeal by the Supreme Court of Appeal.
4. SIOC can therefore not re-introduce, as it seeks to do, the merits of the review application for determination by this Honourable Court.1
5. SIOC in any event now contends that orders 1.1 and 1.2 were correctly granted. The declaratory relief granted in terms of order 1.2 of the High Court, upheld by the Supreme Court of Appeal, declared that in consequence of order 1.1, “… any decision taken to accept or to grant any application, lodged after the date referred to in order 1.1 by any
1 The principle dealt with FRANK NABOLISA and THE STATE [2013] ZACC, paragraphs [30]-[31], is with respect, equally applicable in this instance.
person (including SIOC and ICT) for a prospecting right, mining right or mining permit in respect of a so-called 21,4% share (or any other share or shares) for iron ore and quartzite in respect of any or all of the Properties, as well as any execution and registration of any such right pursuant to such grant, is void ab initio.” (own emphasis)
6. As a consequence of the declaration in order 1.2, there was nothing left in this instance, that could be reviewed and set aside, and orders 2.1 and 2.2 were, with respect, superfluous and unjustified.
7. It is respectfully submitted that SIOC’s revived contention, that the provisions of sections 16(2)(b) and 22(2)(b) of the MPRDA preclude the Minister from accepting or granting to anyone whatsoever an application for an undivided share in a mining right in respect of the iron ore, in view thereof that there is already a holder of a mining right in respect of that iron ore (albeit a 78.6% undivided share in the mining right), is not supported by a proper constitutional interpretation approach to the provisions of the MPRDA.
8. It was accepted by the Supreme Court of Appeal that the MPRDA does indeed permit the grant of undivided shares in prospecting and mining
rights. There is in any event no textual support in the MPRDA for SIOC’s submission that the only way in which undivided shares may be granted by the Minister is by way of joint application.
9. To the extent that this Honourable Court may deem it necessary to deal with SIOC’s contentions in this regard, in addition to ICT’s submissions hereinabove, ICT respectfully persists with the submission that it is manifest that the MPRDA does indeed permit the continued existence of undivided shares in mining rights and that it follows that the MPRDA does recognise the granting by the Minister, as custodian of the mineral resources of the nation, of undivided shares in rights to mine such mineral resources, in accordance with the provisions and objectives of the MPRDA.2
10. It is respectfully submitted that this leads ineluctably to the conclusion that where there is more than one holder of an old order mining right, one of whom failed to apply for conversion thereof into an undivided share in a mining right in respect of the mineral, the undivided share in the mining right in respect of that mineral (of equal proportion to the undivided share
2 See Section 3(2) read with, inter alia, Sections 2, 4, 11 and 56 of the MPRDA. See also Sections 1
“Interpretation of terms –“, 2(5), 16(3), 19, 20 and 24 of the Mining Titles Registration Act, 16 of 1967. In this regard it is significant that the Mining Titles Amendment Act 24 of 2003 (“the MTTA”), commenced operation on 1 May 2004 being the commencement date of the MPRDA as well. Although the MTTA repealed or amended various sections of the Mining Titles Registration Act, the Legislature left the abovementioned sections in the Mining Titles Registration Act pertaining to undivided shares in mining rights, intact.
in the old order mining right that lapsed under the circumstances prescribed in item 7(8) of Schedule II), becomes available to the Minister for allocation. It does not and cannot accrue ex lege to the other holders of undivided shares in that mining right, such as SIOC in this instance.
The vacant portion in respect of the undivided share in the mining right in respect of the mineral resource thus becomes available to the Minister as custodian of the nation’s mineral resources, for allocation to applicants therefor, including to newcomers. It is respectfully submitted that to hold otherwise, would entrench past discriminatory practices and consequences and enlarge upon the rights of incumbents protected by the transitional arrangements, beyond that intended by these transitional arrangements.
11. It is common cause that SIOC’s application for a 21.4% undivided share in the mining right in respect of the iron ore was refused by the Minister on inter alia the basis that SIOC is disqualified from being a competent applicant in future for that 21.4% undivided share in the mining right.3
12. SIOC pertinently did not persist with any prayers for relief in the review application in respect of its mining right application. SIOC elected not to amend its notice of motion and the relief claimed in the review application so as to assail the refusal of its application for a mining right.
It did however elect to amend its notice of motion on 10 June 2011 by
3 Appeal Record, volume 15, pp. 1442 – 1443, paras 59 – 62.
deleting all relief sought in respect of its application for a mining right.
Accordingly, the refusal of SIOC’s mining right application for the reasons advanced, inter alia due to SIOC not being a competent applicant and also being in contravention of sections 38(1)(a),(b),(c) and(d) of the MPRDA, did not form part of the issues between the parties in the review application.
13. It is respectfully submitted that in view of all of the above, the issue in regard to the declarator sought by SIOC is no longer a live issue, and all SIOC’s contentions in regard thereto are irrelevant.
14. On the basis (for which ICT contends) that the MPRDA does permit the continued existence of undivided shares in mining rights and that the MPRDA does recognize the grant of undivided shares in a right to mine, it is respectfully submitted that the interpretation advocated by SIOC entails that sections 16(2)(b) and 22(2)(b) as well as sections 1, 11, 17(1)(d), 23(1)(a) and (f) and 25(2)(c) and (e) and 56 must all be interpreted in a manner that would exclude any application for an undivided share in a mining right in respect of a mineral resource, by either a newcomer or by other undivided shareholders in such a right to
mine (or for that matter, even an application by SIOC itself), is not supported by a proper interpretation and application of the provisions of the MPRDA.
15. We respectfully submit that SIOC’s literal interpretation and argument in support of such contention also does not explain who, in cases where there is a multiplicity of undivided shareholders from the prior dispensation in a mining or prospecting right, would be the only competent or suitable applicant when an undivided share becomes available for any reason, be it due to abandonment, non-compliance with the MPRDA or any other reasons as provided for in terms of the MPRDA.
Sections 16(2)(b) and 22(2)(b), read in their proper context, only exclude applications for a mining right where there is already a holder of 100% of the mining right in respect of the mineral, and do not exclude or prevent applications for undivided shares in a mining right in respect of a mineral where there is already a holder of an other undivided share in such a mining right.
16. On SIOC’s interpretation, sections 16(2)(b) and 22(2)(b) of the MPRDA precludes any party, including a newcomer, from applying for the available undivided share in the mining right in respect of a mineral, if there is already another undivided shareholder in the right to mine a
particular mineral in or upon the property in question. On SIOC’s interpretation the Regional Manager must therefore reject any application in that event, even SIOC’s own application, for such available 21.4%
undivided share in the mining right in respect of the iron ore in or upon the properties in question. If that were a correct interpretation, the 21.4%
undivided share in the iron ore would become sterilized and would never be available for allocation by the Minister.
17. SIOC’s interpretation would serve to expand the rights and security of tenure of the old order mining right holders, instead of allowing or facilitating the entry of newcomers and in particular historically disadvantaged persons. For example, why should a holder of an undivided share in an old order mining right which was converted and registered as an undivided share in that mining right, and whose security of tenure in respect thereof was given effect to by the transitional arrangements of the MPRDA, be solely entitled to expand on its undivided share in that mining right in respect of the mineral/s, by automatically acquiring the other undivided shares in a mining right, in respect of which it was not intended to be given security of tenure and preferential treatment, at the expense of newcomers and in particular historically disadvantaged persons, in terms of the MPRDA.
18. SIOC contended that the grant of a second (and possibly third) right would lead to sub-optimal mining and the possibility of a second (and possibly third) holder of an undivided share in a mining right would necessarily result in interference with these obligations and inevitable difficulties regarding enforcement of these statutory provisions.
Furthermore, the contentions that this would inevitably lead to irresolvable practical difficulties and consequences, which are inconsistent with the objects of the MPRDA, are all gross exaggerations of potential difficulties, none of which are insurmountable and rather indicative that SIOC would not act civiliter modo in the conduct of its mining operations vis-a vis a newcomer to whom that 21.4% undivided share is granted.
19. The alleged practical difficulties which might eventuate in the event of the Minister granting undivided shares in respect of a prospecting or mining right, are, in submission, illusory. Even if some practical difficulty may result in practice, this is not a sufficient basis to conclude that the Minister has no such power in terms of the MPRDA, to resolve any such difficulties.
20. It is respectfully submitted that the interpretation advocated by SIOC is self-evidently untenable and would lead to absurd results. Furthermore, if the Legislator intended by the MPRDA to do away with undivided shares in mining rights and the transfer thereof to or applications for mining or prospecting right in respect thereof by newcomers, it would no doubt have done so expressly. None of these contentions render SIOC’s interpretation reasonable or consistent with the objects of the MPRDA.
Rather it is ICT’s interpretation that is reasonable and consistent with the objectives of the MPRDA.
C AD THE SECOND RESPONDENT’S WRITTEN SUBMISSIONS
21. AMSA contends that the MPRDA does not provide that a mining right in respect of a mineral resource can be granted for less than 100% and that the constitutive components of such a right, being the entitlement to enter the land, prospect or mine for the holder’s own account and to remove and dispose of any such mineral found during the course of mining, are entitlements that cannot be exercised in a certain percentage.
22. It is respectfully submitted that for the reasons as advanced above, in addition to the other contentions already made by the State Applicants as well as by ICT, this contention by AMSA is not supported by a proper
constitutional interpretative approach in relation to the provisions of the MPRDA, its objectives in redressing the injustices of the past, and the MPRD’s intended consequences.
C PUCKRIN SC C VAN HEERDEN E WESSELS
Counsel for the Fifth Applicant Chambers Sandton and Pretoria 22 July 2013
