Norgold Investments (Pty) Limited v Minister of Minerals & Enery of the Republic of South Africa and Others (38033/07) [2010] ZAGPPHC 581 (4 February 2010)

IN THE HIGH COURT OF SOUTH AFRICA

(NORTH AND SOUTH GAUTENG HIGH COURT. PRETORIA)

DATE. 4 February 2010

CASE NO: 38033/07

In the matter between:

NORGOLD INVESTMENTS (PTY) LIMITED............................................................................APPLICANT

AND

MINISTER OF MINERALS & ENERY

OF THE REPUBLIC OF SOUTH AFRICA..........................................................................1st RESPONDENT

THE DIRECTOR- GENERAL- MINERAL

REGULATION, DEPARTMENT OF MINERAL

& ENERGY..........................................................................................................................2nd RESPONDENT

THE ACTING REGIOANL MANAGER -

LIMPOPO REGION, DEPARTMENT OF

MINERALS & ENERGY.....................................................................................................3rd RESPONDENT

THE REGIONAL MANAGER-MPUMALANGA REGION, DEPARTMENT

OF MINERALS & EBERGY...............................................................................................4th RESPONDENT

RODUIM REEFS LIMITED................................................................................................5th RESPONDENT

DEPUTY DIRECTOR -GENERAL MINERAL

REGULATION......................................................................................................................6th RESPONDENT

JUDGMENT

PHATUD1 (J)

[1] Norgold Investments (Proprietary) Limited (Norgold), instituted this application seeking an order in the following terms;

“1. Reviewing and setting aside the decision of the first alternatively the second further alternatively the fourth respondent further

alternatively by the sixth respondent, taken in terms of the provisions of section 17 alternatively item 6 of Schedule 2 of the

Mineral and Petroleum Resources Development Act, 28 of 2002 (“the Act”), to grant to the fifth respondent a prospecting right over Portion 1 and the Remainder of De Goedeverwachting 332KT situated in the Magisterial District of Sekhukhune in the province of Limpopo (“the property”) alternatively to convert the fifth respondent’s old order prospecting right into a prospecting right issued under the Act:

2. Reviewing and setting aside the decision of the fourth respondent to accept, in terms of section 16 alternately item 6 of Schedule 2 of the Act, the application lodged with him by the fifth respondent for prospecting rights over the property alternatively to convert the fifth respondent’s old order prospecting right into a prospecting right issued under the Act;

3. Reviewing and setting aside the decision of the third respondent

3.1 Which decision was communicated to the applicant by way of a letter dated 16 April 2007,

3.2 In terms of which decision the third respondent rejected the applicant’s application for the prospecting right applied for under section 16 of the Act for prospecting rights over the property;

4. Directing the third respondent to accept, in terms of section 16(2) of the Act, the applicant’s application for a prospecting right over the properties, which application was submitted in terms of section 16 of the Act;

5. Costs of suit;

6. Granting the applicant further and\or alternative relief.”

[2] For convenience, the First, Second, Third and Fourth Respondents will hereinafter be referred to as “The Department” and the Sixth Respondent as “DDG”. The Fifth Respondent, Rhodium Reefs Limited, will be referred to as Rhodium.

[3] On the 2 September 2008 Makgoba J postponed the application sine die and granted leave to the applicant to supplement it founding affidavit. The leave was extended to the respondents to answer to the supplemented papers and the applicant to reply thereto. The

applicant’s heads of arguments were not filed on time notwithstanding the directive from the office of the Deputy Judge President that the heads must be filed by 12 October 2009 (a month earlier). I had my first glance on the said heads when handed in from the bar on the date of hearing.

[4] On the 3 April 2007 the applicant lodged with the Acting Regional Manager Limpopo an application for a prospecting right in respect of certain minerals on portion 1 De Goedeverwachting, Limpopo. The Acting Regional Manager Limpopo refused to accept the application in terms of section 16(2) (b) of the Minerals and Petroleum Resources Development Act 28 of 2002(the MPRDA), on the basis that prospecting rights have already been granted to Rhodium and that Rhodium is the holder of such right in respect of the same minerals on the same property.

[5] The refusal by Acting Regional Manager to Limpopo to accept Norgold’s application is the kernel of this application

[6] In South Africa, the regulation of prospecting for and optimal exploitation, processing and utilisation of Minerals was regulated by, among others - Mines and works Act 27 of 1956; Precious Stones Act 73 of 1964, (skipping few) up to Minerals Act 50 of 1991 (the Minerals Act) which was subsequently repealed by Minerals and Petroleum Resources Development Act 28 of 2002 (MPRDA).

[7] The Minerals Act 50 of 1991 (the Minerals Act) provided that any person who wished to carry out mining in South Africa was required to obtain a prospecting permit. Such a person had to satisfy certain requirements before consideration of the granting of such permit.

[8] It is clear from the records that Rhodium Reefs was granted a prospecting permit on the 2 June 2000 in respect of the Remaining Extent and Portion 1 of the De Goedevewachting situated in the North Region. Rhodium was the holder of the permit. Subsequent thereto, Rhodium renewed the said permit on several occasions up to and including the 26 April 2004. The renewals of the permit were effected by the Director, Mineral Development, Mpumalanga.

[9] Schedule II of MPRDA provides for the transitional arrangements from the Minerals Act. The Schedule defines the holder, in relation to an old order right as ‘the person to whom such right was or deemed to have been granted or by whom it is held or is deemed to be held, or such person’s successor in title before this Act came into effect’.

[10] The Schedule further defined an “old order prospecting right” as ‘any prospecting lease, permission, consent, permit or licence, and the rights attached thereto, listed in Table 1 to this schedule in force immediately before the date on which this Act took effect and in respect of which prospecting is being conducted.’

[11] The transitional arrangements further provides for the continuation of old order prospecting right. Item 6(1) of schedule II of MPRDA provides

‘subject to sub item (2) and (8), any old order prospecting rights in force, immediately before this Act took effect, continues in force or a period of two (2) years from the date on which this Act took effect subject to the terms and conditions under which it was granted or issued or was deemed to have been granted or issued.’

[12] A prospecting right is, subject to MPRDA, valid for the period specified in the rights, which period may not exceed five (5) years.

[13] In evaluating the evidence tendered, I find that Rhodium applied to convert its old order prospecting permit into a prospecting right as regulated by MPRDA on the 13 April 2005. The convention was granted and notarially executed on 14 January 2006 and 23 November 2006 respectively. The prospecting right is thus valid, as provided in terms of section 17 (b) of the MPRDA, for the period specified in the rights. Clause 3.1 of the converted Prospecting Right annexed as RR10 provides that;

This prospecting right shall commence on 23 November 2006 and ... will continue in force for a period of 5 (five) years ending on 20 November 2011,

[14] The first relief sought by Norgold is based on the prospecting right being converted and amended to Rhodium by the Regional Manger in the Mpumalanga Region and not Limpopo Regional Manager.

[15] Upon scrutiny of the permit ab origino, I find the converted prospecting right in favour of Rhodium to have been issued or granted in the Northern Region and always renewed in Mpumalanga. The question to consider is what could have caused this Limpopo-Mpumalanga problem. Upon perusal of the National Deed, apparently the first permit executed in favour of Rhodium, I find the property to have been described to be in “Transvaal.”

[16] I enquired from both counsel for the Respondent of the actual location of the property that is subject of this application. Mr Grobler, counsel for Rhodium, explained in brief how the two “regions” got involved in this project. The properties in which Rhodium was prospecting, (of which the farms De Goedewaverwachting and Boschkloof), were situated in the Transvaal, later in self governing Territory of Lebowa and lastly, on the boundaries of Limpopo and Mpumalanga provinces respectively. The Steelpoort River, being the boundary between Limpopo and Mpumalanga, runs between the farms. He further said that Rhodium’s project was conducted on farms that were situated in Limpopo and others in Mpumalanga separated by Steelpoort River.

[17] As already indicated above, the prospecting permit was granted in “Limpopo” and annually renewed in “Mpumalanga”.

I am persuaded to accept that the administration of the project from the point of the Department vis-a vis Rhodium Reefs is better managed from one region. This prompted, as submitted by Mr Grobler, the Regional Directors of Limpopo and that of Mpumalanga regions respectively to come to a concession of delegating the Director of Mpumalanga to deal with prospecting projects on farms adjacent to Mpumalanga region. Portion 1 of De Goedeverwachting (which is subject of this application) was one of the farms. In my view, the decision taken by the two regions is good for administration purposes that ensure good control and management of the prospecting projects. I find no unlawfulness in such delegation. I further find that the Regional Manager of Mpumalanga to have had jurisdiction to convert Rhodium’s Prospecting right.

[18] The other question to consider is whether a permit can be renewed if the date of renewal has expired. Renewal simply means to make “new” of a thing that existed. A motor vehicle disc licence normally displayed on the front wind shield may expire without being noticed by the owner or driver thereof. Such a licence may be renewed days or months after expiry date on the same terms and conditions upon fulfilment of the requirements for renewal.

[19] I am persuaded, not by Lazarus’ resurrection, but by Mr Grobler’s submission that no one knew as to when MPRDA would take effect. The MPRDA provides for the “phasing-in” of the protection of prospecting rights to people who had same under the Minerals Act.

[20] On the interpretation and meaning of the word “must” as it appear on item 6 (2) of schedule II of MPRDA, I am of the view that the word is a mere directory and not peremptory. The intention of the legislature, in my view, was to give a directory meaning so as to give effect to the “transitional arrangements” and the “phrasing in “of the new regulations as provided in terms of MPRDA.

[21] Considering Norgold’s application for a prospecting right in terms of Section 16 of MPRDA. Section 16(1) provides that:

‘any person who wishes to apply to the Minster for a prospecting right must lodge the application...’

Section 16(2) provides that

“The regional Manager must accept an application for prospecting right if...”

“(b) no other person holds a prospecting right, mining right, mining permit or retention permit for the same mineral and land.’

[22] Norgold applied for a prospecting right in respect of the De Goedeverwachting on the 3 April 2007. The application was made a year after the conversion application of Rhodium had been granted and notarially executed. Norgold’s application is not a competing application. Applicant of Norgold and Rhodium were not submitted the same time. Section 9 deals with simultaneous applications. This is not the case. The Regional Manager rightly applied the provisions of Section 16(2) (b) in that Rhodium, at that moment, held a prospecting right for the same mineral and property.

[23] I find the effect of section 16(2) (b) being to preclude all others from applying for prospecting rights while such right have been granted to someone else. The section does not preclude the simultaneous application over the same minerals on the same land. This has not been the case here.

[24] In considering Norgold’s position at the time the conversion was effected, Norgold had no sufficient interest at that time. Norgold did not have any rights in respect of the property or in Rhodium’s application for conversion. This, in my view, is clear that Norgold lacked locus standi to seek the relief sought in prayer 1 and 2 of the Notice of Motion. I will thus not deal with issues of referring any issues to oral evidence. I will further not deal with the striking out application and the hearsay that flow with it.

[25] As far as Norgold’s application in terms of Section 16 of MPRDA is concerned, the Regional Manager in whose property lies, is statutorily obliged, in terms of section 16 (3), “to notify the applicant in writing of that fact within 14 days of receipt of the application and return the application to the applicant.”

[26] Norgold stated in his founding affidavit at paragraph 8.11 that “On 11 May 2007, the applicant received the telefax annexed marked “SW5” from the Acting Regional Manager: Limpopo stating that the application has been rejected.”

[27] According to the record, the Acting Regional Manager, notified (as statutorily required) Norgold within 14 days in writing (SW5), of the decision of rejecting its application. On perusal of SW5, the Acting Regional Manager recorded its reason for rejecting as “Non-compliance with section 16 (2) i.e. the right to prospect for platinum group metals, all minerals and nickel has been granted to Rhodium Reefs Limited”.

[28] Norgold’s application was correctly returned to the Applicant. The Acting Regional Manager did what he had to do and accordingly informed the applicant to that effect. The reason for Norgold’s application complies with the provisions of Section 16 (2) (b).

The Regional Manager found Rhodium to be the holder of a prospecting right at the time Norgold applied.

[29] In evaluating the said evidence before me, it is in my view that the Department did what he had to do as statutorily obliged to do and Norgold’s prayers 3.1 and 3.2 stand to be dismissed.

[30] I am further of the view that the Acting Regional Manager’s rejection of the Norgold’s application in term of section 16 (2) (b) was due to the factual existence of a permit of a prospecting right granted and notarially executed in favour of Rhodium Reefs under item 6 of schedule II of MPRDA.

[31] It follows from what I found above that the relief Norgold seeks in terms of prayer 4 cannot be granted based on the existence of the prospecting rights granted to Rhodium in respect of the same minerals and the property respectively.

[32] It is trite that cost follow the event. The Respondents succeeded substantially and are entitled to their costs. They are as well entitled to the costs of 2 September 2008.

[33] I, as a result thereof, make the following order;

Applicant’s application is dismissed with costs including the costs of the 2 September 2008. The applicant is liable for all Respondents costs including the costs of 2 counsel.

AML PJHATUDI

JUDGE OF THE NORTH GAUTENG HIGH COURT

Heard on: 9-11 November 2009

Councel for Applicant: Adv Loxton (SC) and ADV Mooki

Instructed bv Applicant: Werksmans Incorporated

Councel for Respondent's: Nthai Seth (SC) and Wesley MA

Instructed bv Respondents: Tabacks Inc and State attorney

Judgment handed down: February 2010