On 19 July 2017, the Minister of Mineral Resources gazetted an invitation to comment on a proposed restriction on the granting of new mining and prospecting rights, as well as restricting the renewal and transfer of any existing prospecting and mining rights across South Africa.

The Minister’s intended decision is arguably ultra vires (beyond the Minister’s powers), as it appears to be an irrational and unreasonable exercise of the Minister’s power under section 49(1) of the Minerals and Petroleum Resources Development Act (MPRDA).

In terms of this section, the Minister may restrict or prohibit the granting of any new prospecting or mining rights – provided the various requirements contained in the section are met. These requirements fall into two categories, namely, procedural requirements and substantive requirements.

The Minister has met the procedural requirements in the invitation to comment. In terms of the Act, all he needs to do is to call on all relevant stakeholders to comment on a proposed restriction.

Regarding the substantive requirements, section 49 states that the prohibition and/or restriction of the granting of mining or prospecting rights may only happen if the Minister has had regard to (i) the national interest; (ii) the need to promote the sustainable development of the country’s natural resources; (iii) the strategic use of the mineral in question; and (iv) such a prohibition or suspension must be in respect of a piece of land identified by the Minister. It is also worth noting is that this suspension or prohibition must be for a stipulated period and subject to such terms and conditions that the Minister may determine.

Furthermore, section 49 does not explicitly empower the Minister to prohibit or restrict the  transfer or renewal of existing rights, which limitations he has sought to include within the ambit of his proposed restriction.

It is certainly debatable whether the Minister’s proposed restriction meets the substantive objectives of section 49. The wording of section 49 implies that the Minister would be empowered to suspend or restrict the mining of a specific mineral for a certain period in respect of a specific piece of land in order to properly preserve the value of a specified mineral for future generations.

Furthermore, the Minister’s decision to suspend mining and prospecting right applications is an administrative act. In terms of the Constitution and the Promotion of Access to Justice Act (“PAJA”), if administrative action is to be lawful, it must be fair and, at the very least, rational.

As such, the Minister’s intended moratorium appears to fall outside of his powers and the Chamber of Mines is justified in its decision to challenge the Minister on this point requesting a withdrawal of the notice, failing which they will be forced to, yet again, turn to the courts.

The section relied on requires the Minister to identify the land, and also a specific mineral or a class of minerals. It does not permit a blanket moratorium in respect of applications for the entire country and in respect of all minerals, effectively halting the entire mining industry. In addition, the section requires the Minister to determine a period for the prohibition or restriction. The notice fails to do this and his decision, if implemented on this basis, is likely to be reviewable in terms of PAJA.

With the industry debating its next step, it remains arguable whether an application to court is premature at this stage in the process, as the notice, on the face of it, is merely a call for comment. The current remedy for any affected party would be to make its representations as part of the consultation process. These representations would include the comments above in relation to ultra vires and irrationality. The time to institute review proceedings in terms of PAJA to set aside the restriction would, however, only commence once the Minister implements his intended decision.

On the other hand, PAJA requires that administrative actions must be procedurally fair. PAJA requires that the Minister must, at the very minimum, give affected persons notice of the nature and purpose of the proposed administrative action. In this regard, the Minister has not stated the purpose of the proposed administrative action. It is arguable that this defect in the notice, together with the failure to comply with the provisions of section 49, makes it impossible for affected persons to have a reasonable opportunity to make proper representations. On this basis, it could then be said that this could render the notice liable to immediate review and setting aside.

Submitted by Fasken Martineau