Limpopo Economic Development Agency v Klopper NO and Others

The Limpopo Economic Development Agency (LEDA) held 40% of the shares in ASA Metals (Pty) Ltd (ASA), with the remaining 60% held by Eastern Asia Metal Investment Co Ltd (EAMI). ASA was the sole shareholder of Dilokong Chrome Mine (Pty) Ltd (DCM). DCM held an old order mining right which was converted in 2014 into a new order mining right under the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA). Both ASA and DCM were later placed under business rescue. The business rescue practitioners decided to sell DCM’s mining right to Cheetah Chrome South Africa (Pty) Ltd. LEDA sought to interdict the sale, claiming that clause 17 of DCM’s mining right granted it a 40% stake in the mining right or obliged DCM to grant it such a stake. The High Court dismissed LEDA’s application, holding that clause 17 did not confer any such right. LEDA appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel.

The case is significant for South African mining and administrative law as it clarifies that a mining right issued under the MPRDA cannot confer ownership or a ‘stake’ in the right on a non-holder. It reaffirms the Endumeni principles of interpretation, emphasizes the distinction between shareholding in a company and ownership of the company’s assets, and confirms limits on the Minister’s powers when granting mining rights.