ConCourt dismisses mineral rights appeal

2013-04-19 11:19

The Constitutional Court has denied an appeal by Agri SA to have a Supreme Court of Appeal (SCA) ruling on mineral rights dismissed.

The commercial farmers’ union had claimed for damages over alleged expropriation of mineral rights which the SCA set aside.

The Constitutional Court heard the application on November 8 last year.

Agri SA argued the Mineral and Petroleum Resources Development Act (MPRDA) abolished the concept of privately held mineral rights.

The act, promulgated in 2004, requires owners of old-order rights to apply to have them converted into new rights.

It vests ownership of mining rights in the state. Agri SA believes this is expropriation and wants R2 million compensation.

Shortly after the commencement of the act, Agri SA acquired by cession a claim for compensation from mining company Sebenza. The then minister of minerals and energy rejected the claim.

The North Gauteng High Court in Pretoria ruled in favour of Agri SA and awarded it R750 000 compensation.

The SCA set the ruling aside and held the act did not deprive Sebenza of property, and therefore did not amount to expropriation, and no compensation needed to be paid.

In a majority judgment yesterday, written by Chief Justice Mogoeng Mogoeng, the Constitutional Court held while the MPRDA deprived Sebenza of its coal rights, the deprivation did not rise to the level of expropriation at the time of the act’s commencement.

According to the judgment, the conclusion was supported by traditional arrangements which protected pre-existing mineral rights and improved security of tenure.

Mineral Resources Minister Susan Shabangu welcomed the judgment.

“We are very much delighted by the judgment, as it affirms that our work as the department is taking a trajectory that will see the sector’s sustainable growth and transformation,” she said in a statement.

“The decision affirms the objects of the MPRDA in seeking to redress the injustices of the past, and bringing in fairness in the sector.”

Agri SA president Johannes Möller said he was disappointed.

“The ruling of the court was not what we expected ... what we viewed as expropriation of mineral rights was seen differently by the Constitutional Court. We respect the verdict,” he said in a statement.

“We will now embark on a process to study the judgment in detail to determine what recourse is available to mineral right holders in circumstances different from the specifics of the Sebenza case.”

In a joint statement, AfriForum and AfriSake said they too intended studying the ruling to determine its impact on ownership rights.

“They will also determine to what extent today’s ruling is applicable to other forms of ownership,” spokesperson Cornelius Jansen van Rensburg said in a statement.

AfriForum and AfriSake joined the case as friends of the court.

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