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Journal of Energy & Natural Resources Law Volume 12, 1994 - Issue 3
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Original Articles

Proposed Nationalisation of Mineral Rights in South Africa

P J Badenhorst Professor of Private Law, University of the North.
,
E van der Vyver Legal Advisor.
&
C N Van Heerden Member of the Johannesburg Bar.
Pages 287-298 | Published online: 08 Jun 2015

  • s 251 (1) of Act 200 of 1993. The interim Constitution emerged from the multi-party negotiating process at the World Trade Centre in Kempton Park during 1993. The Constitution, as approved by the Negotiating Council which represented all the political parties participating in the process, was enacted by Parliament, with relatively minor amendments: see, E Mureinik, “A Bridge to Where? Introducing the Interim Bill of Rights” a paper delivered as part of the constitutional law programme of the University of the Witwatersrand on 12 March 1994.
  • A seminar, entitled “Mineral rights and small scale mining in a future South Africa” hosted by the Macro Economic Research Group and Genmin during August 1993 at Randburg can be regarded as the starting point for this debate.
  • The Freedom Charter of 1955 provided that “(t)he mineral wealth beneath the soil… shall be transferred to the ownership of the people as a whole”. Clause 4.6.1 of the ANC's draft Reconstruction and Development Programme, 1994, states: “South Africa is one of the world's richest minerals countries, but this enormous wealth has up to now only been used for the benefit of the tiny white minority. The minerals in the ground belong to all South Africans, including future generations. Thus we must seek the return of the mineral rights to the democratic government, which should in turn give the people control over optimum exploitation of this important natural resource. The high level of concentrated ownership in mining and marketing of minerals militate against direct investment and participation of our people”. In an article entitled “An underground struggle” on p 11 of the Saturday Star of 12 February Mr Mandela was reported as having told delegates at a conference of the National Union of Mine Workers: “An ANC-led government will wrest mineral rights from mining houses and place them in the hands of the State”. Such acquisition of privately held minerals rights by the state can only be achieved by expropriation on a grand scale. On the other hand, the ANC has recently proposed the taxation of mineral rights to facilitate the return of these rights from the mines to the state (“ANC backs Botswana model for mineral tax” on p 2 of the Sunday Times, Business Times, 10 April 1994).
  • See, H P Viljoen, The Rights and Duties of the Holder of Mineral Rights, LLD thesis Leiden (1975), at pp 1–12; C G Van der Merwe Sakereg, 2 ed (1989), at p 552.
  • Cf Du Preez v Beyers 1989 (1) SA 320 (T) 324F; C P Joubert, “Die Regte op Minerale”, 1959 THRHR, p 27 at pp 29–30; C G Van der Merwe, ibid (1989) at p 551.
  • 1903 TS 499.
  • C G Van der Merwe and M J De Waal The Law of Things and Servitudes (1993) defines a servitude (on p 199 para 215) as a limited real right in terms of which a burden is imposed on an immovable tenement restricting the rights, powers or liberties of its owner to a greater or lesser extent in favour of either another person (ie a personal servitude) or the owner of another tenement (ie a praedial servitude).
  • On p 510; See P J Badenhorst, “Towards a theory on mineral rights”, 1990 TSAR, p 239 at pp 249–250, “Klassifikasie en Kenmerke van mineraalregte” 1994 THRHR 34. Similar development took place in the American state of Louisiana. See P J Badenhorst, “Mineral rights Under Louisiana law”, 1993 De Jure p 297 on p 302.
  • Van Vuren v Registrar of Deeds 1907 TS 289 295; Shandoss v Registrar of Deeds 1912 TPD 407 415; Rocher v Registrar of Deeds 1911 TPD 311 315; Webb v Beaver Investments (Pty) Ltd 1954 1 SA 13 (T) 25A-B.
  • T R H Davenport South Africa—A Modern History 3rd ed (1987) pp 192 and 93.
  • See in general, M O Dale, An Historical and Comparative Study of the Concept and Acquisition of Mineral Rights, LLD thesis, University of South Africa (1979) on pp 175–237; L V Kaplan, The Development of Various Aspects of the Gold Mining Laws in South Africa from 1871 until 1967, Phd thesis, University of the Witwatersrand (1986).
  • Namely, the Precious Stones Act, 73 of 1964, the Mining Rights Act, 20 of 1967, the Mining Titles Registration Act, 16 of 1967 and the Atomic Energy Act, 19 of 1976 (replaced by the Nuclear Energy Act 92 of 1982).
  • Eg the Mines and Works Act, 27 of 1956; the General Laws Amendment Act, 50 of 1956 and relevant provisions of the Deeds Registries Act, 37 of 1947.
  • The Mineral Laws Supplementary Act, 10 of 1975 and the Tiger's-Eye Control Act, 77 of 1977.
  • B L S Franklin and M Kaplan, The Mining and Mineral Laws of South Africa, (1982) at p 2.
  • For a detailed discussion of the Act, see M Kaplan and M O Dale, A Guide to the Minerals Act 1991 (1992); and M O Dale, “Current Developments in Mineral Law in South Africa” (1994) 12 JERL 226.
  • Proc 123 in Government Gazette 13682 dated 20 December 1991.
  • s 68(1); The Deeds Registries Act; the General Laws Amendment Act, 50 of 1956 and the Mining Titles Registration Act, were, however not repealed.
  • See, in general, the White Paper of the Mineral Policy of the Republic of South Africa (1986) pp 5–6 and the White Paper on Privatisation and Deregulation in the Republic of South Africa (1987).
  • See P J Badenhorst, “The revesting of state-held entitlements to exploit minerals in South Africa: privatisation or deregulation?” 1991 TSAR p 113 at pp 125–127; 130–131.
  • In terms of the doctrine of private law rights, the right to exploit minerals would, strictly speaking, be regarded as an “entitlement”, being the content of a right. However, because the doctrine is not generally accepted in South Africa, the word “right” would be used.
  • On p 6 of a paper entitled “Mineral rights and small-scale mining—the view from Gold Fields” read at the seminar on “Mineral rights and small scale mining in a future South Africa” hosted by MERG and Genmin during August 1993 at Randburg.
  • C G Van der Merwe and M J De Waal op cit (1993) p 98 para 104.
  • P J Badenhorst, op cit, 1991 TSAR at p 114.
  • See further P J Badenhorst, Die Juridiese Bevoegdheid om minerale te ontgin in die Suid-Afrikaanse Reg, LLD thesis, University of Pretoria (1992), at pp 16–75.
  • ss 70(5) and 72(2) of the Deeds Registries Act 37 of 1947. Such mineral rights can then be separately mortgaged.
  • ss 71(1), 71(2) and 72(2).
  • ss 71(1) and 71(2) (bis) (a).
  • s 73(1) (2) and 70(1); see further s 26(1) (bis).
  • s 73 bis (1). See, however, s 20(1) of the Minerals Act 50 of 1991.
  • ss 70(3) and 31 of the Deeds Registries Act; s 8(1) of the Expropriation Act 63 of 1975. The last mentioned type of expropriation seldom occurs in practice. See, E Van der Vyver ‘n Teoretiese beskouing van die bepaling van markwaarde van mineraalregte as ‘n komponent van die vergoeding betaalbaar ingevolge die Onteieningswet 63 van 1975, LLM dissertation, University of the Witwatersrand, (1986), at p i.
  • Under section 12(1) of the Lebowa Minerals Trust Act, 9 of 1987, the mineral rights in respect of land transferred in ownership from the South African Development Trust to the Lebowa government were separated from the ownership of land; they are held by the Lebowa Minerals Trust for the benefit of (the people of) Lebowa.
  • ss 16 and 70(1) of the Deeds Registries Act 37 of 1947.
  • s 70(2).
  • s 70(4).
  • Taylor and Claridge v Van Jaarsveld and Nelmapius (1886) 2 SAR 137; McDonald v Versefeld (1888) 2 SAR 234; Pearce v Olivier and Others and Noyce (1889) 3 SAR 79; Cullinan v Registrar of Deeds 1903 ORC 63 64; the Van Vuren case 294–296; the Lazarus and Jackson case 510; the Rocher case 315; Ex parte Pierce 1950 (3) SA 628 (O) 634C; Erasmus v Afrikander Proprietary Mines Ltd 1976 1 SA 950 (W) 956D-E; Government of the Republic of South Africa v Oceana Development Investment Trust plc 1989 1 SA 35 (T) 36H.
  • In the Lazarus and Jackson case Innes CJ held on p 510: “I must confess to having at first experienced considerable difficulty—a difficulty which pressed me during the argument—in finding an appropriate juristic niche in which to place this right. Rights of that nature are peculiar to the circumstances of the country, and do not readily fall under any of the classes of real rights discussed by the commentators. They seem at first sight to be very much of the nature of personal servitudes; but then they are freely assignable”. See also, the Van Vuren case 295; the Webb case 25A-B 33–36; Ex parte Marchini 1964 1 SA 147 (T) 150G; Manganese Corporation Ltd v South African Manganese Ltd 1964 2 SA 185 (W) 189A.
  • The Rocher case 316; the Webb case 25A; the Marchini case 149G, 151B-C; Nolte v Johannesburg Consolidated Investment Co Ltd 1943 AD 295 307; South African Railways and Harbours v Transvaal Consolidated Land and Exploration Co Ltd 1961 2 SA (A) 467 481G-H; Jonordon Investment (Pty) Ltd v De Aar Drankwinkel (Edms) Bpk 1969 2 SA 117 K 126D; the Du Preez case 324H.
  • The Pierce case 634D; the Erasmus case 956E; Apex Mines Ltd v Administrator, Transvaal 1986 4 SA 581 (T) 590F.
  • PJ Badenhorst, op cit 1994 THRHR R 34. Similar classifications are found in pre-Code Louisiana law. See P J Badenhorst “Mineral rights under Louisiana Law” 1993 De Jure 297 at pp 301–302.
  • The Van Vuren case 294; the Rocher case 316; Gluckman v Solomon 1921 TPD 335 338; Douglas Colliery v Bothma 1947 3 SA 602 (T) 610; the Pierce case 634C-D; the Erasmus case 956E. As to an enumeration of the content of a mineral right, see P J Badenhorst, 1990 TSAR 474–475, Bevoegdheid om Minerale te ontgin, op cit pp 118–119.
  • See the definition of a “prospecting contract” in s 102 of the Deeds Registries Act.
  • s 2(1) of the Alienation of Land Act, 68 of 1981.
  • s 3(1) (q) and 84 of the Deeds Registries Act; P J Badenhorst and C N Van Heerden, “Prospekteer-en mynboukontrakte ingevolge die Mineraalwet 50 van 1991”, 1992 THRHR p 220 at pp 232.
  • s 6 of the Minerals Act, 50 of 1991.
  • s 3(1) of the General Laws Amendment Act 50 of 1956; Fuls v Leslie Chrome (Pty) Ltd 1962 4 SA 748 (W) 787A-C; Nortje v Pool 1966 3 SA 96 (A) 111A 126–127; Belville Inry (Edms) Bpk v Continental China (Pty) Ltd 1976 3 SA 583 (K) 585H-588G; Roets v Secundior Sand BK 1989 1 SA 902 (T) 904G-H.
  • s 3(1)(m) of the Deeds Registries Act.
  • s 3(1) of the General Laws Amendment Act 50 of 1956.
  • s 9 of the Minerals Act 50 of 1991.
  • s 5(2) of the Minerals Act; P J Badenhorst and C N Van Heerden “A comparison between the nature of prospecting leases in terms of the Precious Stones Act 73 of 1964 and prospecting permits in terms of the Minerals Act 50 of 1991—Ondombo Beleggings (Edms) Bpk v Minister of Mineral and Energy Affairs, 1993 TSAR p 159 pp 167–168.
  • London and SA Exploration Co v Rouliot (1891) 8 SC 74 90; Neebe v Registrar of Mining Rights 1902 TS 65 85; the Rocher case 315; Vanston v Frost 1930 NPD 121 125; Union Government v Marais 1920 AD 240 246; Erasmus and Lategan v Union Government 1954 3 SA 415 (O) 417D; BLS Franklin and MO Kaplan, op cit (1982) 4; m O Dale, op cit (1979) 76; Cowen “New Patterns of Landownership—The Transformation of the Concept of Ownership as plena in re potestas” (lecture delivered at the University of the Witwatersrand, Law Students Council (1984) at p 56; Pienaar “Drie-dimensionele Registrasie van Onroerende Goed—‘n Lugkasteel?”, 1989 De Jure p 257, 259.
  • Neebe v Registrar of Mining Rights 1902 TS 65 85; Odendaalsrus Gold, General Investments and Extensions Ltd v Registrar of Deeds 1953 I SA 600 (O) 604E.
  • This is not unique to South African law. See for instance article 5 of the Louisiana Mineral Code Act, 50 of 1974; P J Badenhorst, “A few fundamental aspects of Louisiana Mineral Law”, 1993 4 TSAR p 732, pp 740–741.
  • M O Dale op cit (1979) 79; M Kaplan and M O Dale op di (1992) 25.
  • Expropriation of mineral rights by the State upon request from an individual is also possible under s 24 of the Minerals Act. See also the Expropriation of Mineral Rights (Township) Act 96 of 1969.
  • See A Gildenhuys, Onteieningsreg (1976); A Gildenhuys and G Grobler, “Expropriation” in the Law of South Africa (Ed W A Joubert) vol 10 (1980); Jacobs The Law of Expropriation in South Africa (1982). For a brief summary, see also P J Badenhorst and E G M Grütter “Causation for purposes of the Expropriation Act 63 of 1975” 1994, TSAR 161.
  • See the definition of “minister” and “executive committee” in s 1.
  • As to the meaning of “public purpose”, see the definition of “public purpose” in s 1; A Gildenhuys and G Grobler, op cit “Expropriation” p 9 para 11; and White Rock Farms (Pty) Ltd v Minister of Community Development 1984 2 SA 785 (N) 793E-794H.
  • s 2(1).
  • See the definition of “property” in s 1.
  • See s 7(2); Braude v Pretoria City Council 1981 1 SA 680 (T) 682A-683H; Maharaj v Verulam Town Council 1988 3 SA 777 (D) 781H-783I; Redelinghuys v Stadsraad van Pretoria 1990 1 SA 555 (T) 558C-559F.
  • s 7(1).
  • See s 7(3)—(4); Van Rensburg v Stadsraad van Alberton 1984 1 SA 147 (W) 152A-B; Kendrick v Community Development Board 1983 4 SA 532 (W) 534H-536H.
  • s 7(2)(b).
  • s 8(1). As to the discharge of the debt secured by mortgage bond, see further s 19.
  • s 8(1).
  • s 22.
  • A mortgage bond is registrable in respect of mineral rights in terms of ss 3(l)(e) and 50(1) of the Deeds Registries Act; see, further, P J Badenhorst, op cit, (1992) 478–482.
  • For example, a notarial mineral lease which had not been registered in the deeds office.
  • Examples are: (a) an usufruct registered in respect of a mineral right. (See further, s 65(1) of the Deeds Registries Act 47 of 1937; Ex parte Eloff 1953 1 SA 617 (T) 620A; P J Badenhorst, “Vruggebruik ten aansien van ontginningsregte”, 1993 Stell LR at p 394); (b) a mineral lease (ss 3(1)(m) and 77 of the Deeds Registries Act); or (c) a prospecting contract (ss 3(1)(q) and 84 of the Deeds Registries Act).
  • Minister van Waterwese v Mostert 1964 2 SA 656 (A) 666H; Cf E Van der Vyver op cit (1986) 35.
  • s 2(1) of the Expropriation Act. A Gildenhuys, op cit (1976) p 16 points out that such a statutory duty is a prerequisite for the payment of any compensation.
  • s 12(l)(l)(a)(i). It is interesting to note that before the amendment on 1 May 1992 of the Expropriation Act the compensation payable for expropriation of a mineral right was the actual loss and inconvenience caused by the expropriation (rather than its market value). Market value as a norm of compensation had earlier been proposed by E Van der Vyver, op cit( 1986) at pp 40–41 119.
  • s 12(1)(a)(ii).
  • See further, s 12(2).
  • s 13.
  • See note 69 supra.
  • s 13 and 19.
  • E Van der Vyver, op cit, (1986) at pp 96–97, 99, 119.
  • See E Van der Vyver, op cit, (1986) at pp 49–86.
  • E Van der Vyver op cit, (1986) at pp 98–100, 120.
  • See further, s 24(1) of the Minerals Act.
  • This would be different from and more comprehensive than merely the reservation of the right to prospect and/or mine specific minerals in favour of the state which reservation, as was indicated in the introduction, existed prior to the introduction of the Minerals Act. In the first instance a mineral right with its entire contents is acquired by the state and is terminated, whereas in the second instance only a portion of the content of the mineral right is acquired without termination of the mineral right.
  • For instance, the termination of statutory mining leases (without compensation and without any recourse to the courts) held by a South African diamond company in Lesotho by the Military Concil of Lesotho under section 5 of the Revocation of Specified Mining Leases Order, 1992 (Lesotho Government Gazette Extraordinary 1992-03-20).
  • s 4(1).
  • See further, C Lewis, “The Right to Private Property in a New Political dispensation in South Africa” 1992 SAJH p 389 at pp 393–408; A J Van der Walt “The Impact of a Bill of Rights on Property law” 1993 SA Public Law p 296 at pp 304, 315; J Murphy, “Property rights in the New Constitution: an analytical framework for constitutional review” 1994 CILSA p 211 at pp 216–218.
  • s 28(1).
  • s 28(2).
  • s 28(3).
  • s 28(3).
  • s 28(3).
  • s 33(1). Stuart Woolman on pp 27–28 of a paper entitled “Riding the push-me pull-you: Constructing a test that reconciles the conflicting interests which animate the limitation clause” delivered during the Constitutional law programme at the University of the Witwatersrand on 9 March 1994 proposes the application of the following test for purposes of the limitation clause: “To pass constitutional muster, a government restriction infringing a fundamental right must: (a) be a means for effecting a substantial and pressing government concern; (b) be designed to impair the right in question as little as reasonably possible; (c) not impose costs on the burdened individual or groups which are not reasonably proportionate to the expressed objective; and (d) not negate the essential content of the right”.
  • s 4(1); See further Government of the Republic of Namibia v Cultura 2000 1994 1 SA 407 (NmS) 418F-G.
  • See J Dugard, International Law—A South African Perspective (1994) at pp 190–193; J Murphy “Compensation for Nationalisation in International Law” 1993 SALJ pp 79–99.
  • J Dugard op cit (1994) at p 350.
  • s 231(4) of the Constitution.
  • It is arguable that such a statute would also have to comply with the Constitutional provisions because it would amount to a “taking” of property, namely prospecting and mining rights, which are currently vested in the (private) holders of mineral rights.
  • B L S Franklin and Kaplan op cit 1.
  • This has already been done on a large scale in Lebowa by the creation of a trust in terms of the Lebowa Minerals Trust Act. See note 32 supra.
  • P J Badenhorst op cit 1991 TSAR 126–127.
  • a 27 of the Lousiana Mineral Code.
  • the Marchini case 150H-151A; the Oceana Development Investment Trust plc case 36D 37G; see in general, J C Sonnekus “Enkele opmerkings na aanleiding van die aanspraak op bona vacantia as sogenaamde regale reg” 1985 TSAR 121.

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