The Promotion of Administrative Justice Act (PAJA) may be insufficient to shield South African mining companies from the impact of this week’s far-reaching Constitutional Court (Concourt) judgement, which has thrown yet another cat among the country's prospecting right pigeons.

PAJA demands that the aggrieved parties bring their review applications to court within 180 days.

But even though the Bengwenyama community failed to meet PAJA’s 180-day deadline, the Concourt found in its favour, on the grounds that the community had brought its appeal to South Africa’s Department of Mineral Resources (DMR) in time, but that the DMR had failed to deal with it.

The Concourt thus upheld the 2 500-strong Bengwenyama community’s complaint that it had not been properly consulted about the prospecting that was taking place on its property, leaving the way open now for more potential post-deadline review applications.

“This is a very important judgement because prospecting rights have been granted left, right and centre, all over the country, and the consultation with landowners by both the DMR and the prospecting right applicants is often fairly desultory,” South Africa’s top mining law specialist, Peter Leon, comments to Mining Weekly Online.

“I'm sure there are many other communities that have also not been properly consulted,” adds Evershed law firm partner Ian Shapiro, who has been working on the Bengwenyama case for four years.

The Concourt’s November 30 judgement, which sets aside previous High Court and Supreme Court of Appeal judgements, concludes that black economic empowerment (BEE) mining company Genorah had failed to consult with the community in a proper manner and that the DMR had not complied with PAJA’s fairness requirements.

The Concourt has ordered that the DMR and Genorah pay the community's High Court, Supreme Court of Appeal and Concourt costs.

Genorah is the BEE partner of the ASX-listed mining company Nkwe Platinum, the MD of which, Maredi Mphahlele, was in London at the time of going to press. Mining Weekly Online’s request for a comment from Nkwe's Johannesburg office remains unanswered.

“The community was not treated as required by the Constitution,” South Africa’s highest court found.

DMR director-general Sandile Nogxina tells Mining Weekly Online that the lack of definition of “proper consultation” is an area that is “problematic”.

“There is no definition for consultation. We don’t know its depth, its width or the elements that constitute compliant consultation,” Nogxina says.

He adds that this gap is something that the DMR will seek to close in the new amendments to the Mineral and Petroleum Resources Development Act (MPRDA), which Mineral Resources Minister Susan Shabangu is currently overhauling.

“What the court is saying is that, because of the effect that prospecting has on landowners, the issue of consultation is a very serious one, and has to be undertaken properly.

“It emphasises further that the consultation obligation is even greater when it comes to landowning communities, because they have a preferent right under Section 104 of the MPRDA,” Leon adds.

Shapiro says that the Concourt judgement highlights the failure of the DMR and the applicant to meet the requirements of the MPRDA.

“The department failed to give us a hearing,” he says, adding that the Concourt judgement emphasises that there has to be consultation in good faith with the landowning community.

The initial appication of Bengwenyama Minerals, the community's corporate vehicle, for the prospecting rights was turned down because it did not specifically refer to Section 104.

It has subsequently applied under Section 104, and asked the Concourt to grant it the prospecting rights immediately, but this was turned down.

Mining Weekly Online understands, however, that the community will continue to pursue its Section 104 application.

The Concourt found that the Supreme Court of Appeal had erred and that PAJA’s fairness requirements had been flouted.

Its decision takes place at a time when the DMR has declared a moratorium on the granting of new prospecting rights while a clean-up audit takes place.

The audit has already shown that prospecting rights have, in some instances, been duplicated.

Anglo American group iron-ore miner, the JSE-listed Kumba Iron Ore, is taking the DMR to court for a review of the decision to grant prospecting rights over 21,4% of the Sishen mine in the Nothern Cape to BEE company Imperial Crown Trading, and Lonmin is appealing the DMR's decision to grant chrome rights at its platinum lease area in the North West to BEE company Keysha.

Information reaching Mining Weekly Online is that several mining companies are re-examining their community consultation processes to ensure that they are not in breach of compliant consultation behaviour.