At the commencement of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA), Sishen Iron Ore Company (Pty) Ltd (SIOC) and ArcelorMittal South Africa Ltd (AMSA) were co-holders of an ‘old order mining right’ in respect of iron ore on eight properties at the Sishen Mine. SIOC held a 78.6% undivided share and AMSA a 21.4% undivided share. Under the MPRDA’s transitional arrangements (Item 7 of Schedule II), holders of old order mining rights had five years to apply for conversion. SIOC duly converted its old order mining right within the prescribed period, but AMSA failed to do so. After the five-year period expired, the Deputy Director-General of Mineral Resources purported to grant Imperial Crown Trading 289 (Pty) Ltd (ICT) a prospecting right over the properties corresponding to AMSA’s unconverted share. SIOC and AMSA challenged this grant, contending that AMSA’s failure to convert caused its share to lapse, leaving SIOC as the sole holder of the mining right.
The appeals by the Minister, departmental officials, and ICT were dismissed with costs. The orders of the High Court were largely confirmed, including the declaration that SIOC became the exclusive holder of the mining right with effect from midnight on 30 April 2009, and the setting aside of ICT’s prospecting right as void ab initio. The conditional cross-appeal by SIOC was dismissed.
This decision authoritatively clarifies the effect of Item 7 of Schedule II to the MPRDA where co-holders of an old order mining right are involved. It establishes that failure by one co-holder to convert its right results in the automatic lapse of that share and does not create a residual right for the State to allocate. The case is a leading authority on transitional mineral rights under the MPRDA and limits the Minister’s powers in such circumstances.