CLOSURE OF OLDER MINES AND SECTION 43 OF THE MPRDA - A LINE IN THE SAND

In this article, I examine the perplexing position in relation to closure of “Old Mines”, and more specifically, the application of section 43 of the MPRDA. “Old Mines” in this context means a mine that operated in terms of a common law Mining Lease or Mining Authorisation in terms of the Minerals Act 28 of 1991 (MA) which lease or authorisation lapsed or was withdrawn prior to the commencement of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA).

SECTION 43 OF THE MPRDA

Section 43(1) of the MPRDA provides as follows regarding closure:

“43.???Issuing of a closure certificate.—(1)??The holder of a prospecting right, mining right, retention permit, mining permit, or previous holder of an old order right or previous owner of works that has ceased to exist, remains responsible for any environmental liability, pollution, ecological degradation, the pumping and treatment of extraneous water, compliance to the conditions of the environmental authorisation and the management and sustainable closure thereof, until the Minister has issued a closure certificate in terms of this Act to the holder or owner concerned.” (My emphasis)

This requirement applies to a “holder” of any of the rights concerned (or its successor in title), or the “previous owner” of “works”. Three concepts are created.

·??????????? “Holders” of certain rights, including mining rights

·??????????? “previous” holders of “Old Order Rights” (OOR)[1]; and

·??????????? previous owners of “works”.

“Holder” is defined as:

““holder”,?in relation to a prospecting right, mining right, mining permit, retention permit, exploration right, production right, reconnaissance permit or technical co-operation permit, means the person to whom such right or permit has been granted or such person’s successor in title;”

The concept of “successor in title”, therefore applies only to rights, and does not find application to the previous owners of works or, naturally, “previous” holders of OOR’s since such rights have by their nature no successors in title under the MPRDA. The concept was introduced because a person to whom a mining right had been transferred in terms of section 11 as read with section 69(2)(a) of the MPRDA is not strictly speaking the person to whom the right was outright “granted” in the first instance, and thus to ensure that such entities are also subjected to the requirements of section 43.

The MPRDA does not deal with the concept of “successor in title” directly. A person who becomes the owner of the surface area that is or was the subject of a mining right or Old Order Mining Right (“OOMR”) is evidently not a successor in title for purposes of rights in terms of the MPRDA. This is despite the fact that such a person might acquire rehabilitation obligations in terms of provisions dealing with surface ownership. Succession for purposes of the definition of “holder” is therefore limited to the succession of mining and other rights and not any concept of inherent rehabilitation liability or land ownership as such.

A person[2] is accordingly liable under section 43 if it is:

·?????? The previous owner of a “works”;

·?????? The previous holder of an OOR;

·?????? The holder of (in this context) of a mining right; or

·?????? The successor in title to a mining right.

A mining right in terms of the MPRDA is defined as: “a right to mine granted in terms of?section 23(1)”. The concept is accordingly limited to rights granted under the MPRDA itself. In relation to Old Mines, this definition accordingly extricates Old Mines or its successor from the application of section 43 in two instances. That is, Old Mines are neither the holder of a mining right, nor the successor in title to such a right. This leaves the enquiry as to whether an Old Mine is either:

·?????? the “previous owner of a works”, or

·?????? ?“previous” holder of an OOR.

WORKS

The MPRDA predictably defines “owner of works”?as:

“to have the meaning contemplated in?paragraph (b)?of the definition of “owner” in?section 102?of the Mine Health and Safety Act, 1996 (Act No. 29 of 1996);”

Despite its incorporation into the MHSA of 1996, the terms “works” already existed under the MWA of 1956. The concept of a “works” was thus not introduced by the MPRDA anew. The MPRDA merely attached retrospective liability in a new context to a pre-existing concept. There is no interpretation that militates against the clear retrospective application of section 42(1) in relation to the previous owner of a works.

The MHSA attaches a specific meaning to “works”, which is in one instance regarded as part of the mine (as per the definition of a mine used as a noun in the MHSA), but also holds its own specific definition which does not refer to the mine workings as such.

“works”?means any place, excluding a?mine, where any person carries out - …”

The concept of “works”, insofar as it excludes a “mine” therefore brings the matter no further.

OOR’s, OOMR’s and UOOR’s

Schedule II of the MPRDA defines and Old Order Right (OOR) as: “an old order mining right, old order prospecting right or unused old order right, as the case may be;”

An “old order mining right”?(OOMR) in turn is defined as:

“any mining lease, mynpachten, consent to mine, permission to mine, claim licence, mining authorisation or right listed in Table 2 to this Schedule in force immediately before the date on which this Act took effect and in respect of which mining operations are being conducted;”

Further, an “unused old order right”?(UOOR) means “any right, entitlement, permit or licence listed in Table 3 to this Schedule in respect of which no prospecting or mining was being conducted immediately before this Act took effect.”

Notably, the concepts denoted in the definitions of OOMR’s and UOOR’s in both instances do not accord with the respective associated tables 2 and 3 of the MPRDA. I support the approach that the listings in the tables should take preference (or at least be incorporated) on the basis of interpretational law principles[3].

The MPRDA includes a second definition for the concept of “holder” for purposes of OOR’s, which is defined in schedule II as:

“in relation to an old order right, means the person to whom such right was or is 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;”

Although Schedule II is titled “Transitional Arrangements”, the scope limitation of the Schedule is evident from section 2 thereof, which reads as follows:

“2.? Objects of Schedule.—The objects of this Schedule are in addition to the objects contemplated in?section 2?of the Act and are to—

(a)?? ensure that security of tenure is protected in respect of prospecting, exploration, mining and production operations which are being undertaken;

(b)?? give the holder of an old order right, and an OP26 right an opportunity to comply with this Act; and

(c)?? promote equitable access to the nation’s mineral and petroleum resources.”

Table 3 to Schedule II includes a reference to “A mineral right under the common law for which no prospecting permit or mining authorisation was issued in terms of the Minerals Act. (Vis Table 3 Category 1)”, which appears to align with mining leases. Similarly, various Mining Authorisations in terms of section 9 of the MA are listed in Table 2.

The definition evidently aims at identifying unused, albeit extant rights for the same reasons solely for purposes of rights succession, and not closure or rehabilitation as such. This means that some caution must be applied when utilizing definitions specifically aimed at supporting the content and context of Schedule II, where an alternative definition exists, such as in the case of “holder”. Be that as it may, the two definitions do not contradict one another and there is as yet no indication that the definitions are to be applied to the exclusion of section 43.

A mine whose Mining Lease or Mining Authorisation in terms of the MA has lapsed prior to the commencement of the MPRDA (or its successor tittle) never was a “holder” for purposes of either an OOMR or UOOR. The sole consideration is whether it, or its successor, is the “previous” holder of such a right.

Even if a “holder” for purposes of Schedule II may be defined differently than the definition in section 1 of the MPRDA, it is unnecessary to incorporate the schedule definition into the analyses. The Schedule’s definitions are aimed at aligning the content of Schedule II with the objective of rights succession only. This is not the scope or purposes of section 43.

If section 43(1) merely wanted to denote holders whose rights have been converted under the MPRDA, the reference to OOR’s is superfluous, because such holders are now ordinary holders under the MPRDA in any event. If section 43(1) intended to reference only those holders who holds extant OOR’s on the other hand, use of the word “previous” would be superfluous. On plain reading therefore, the right apparently does not have to be extant to invoke section 43(1) and the phrase “previous holder” used in section 43(1) is a clear attempt at departure from the narrower context of the “holder” in the Schedule.

More specifically, this phrasing in section 43(1) apparently seeks to establish retrospective obligations in respect of any person or owner that was the holder of, in this instance, an OOMR at some point in the past. Apparently, and as also pointed out by Dale[4], it appears that the language seeks to align the provision of section 43 not only with the retrospective provisions of section 28, but also section 24R(1) of the NEMA.

But where is this point in the past? On this one can speculate endlessly with reference to the Water Act of 1956 and even the “Fanie Botha Accord” in terms of which environmental liability for mines and works abandoned before July 1956 would be the responsibility of the State. This speculation is however unnecessary.

As I alluded to above, the concept of OOR’s was created under the MPRDA. Thus, if an authorisation (which would have been deemed to be an OOR as of commencement of the MPRDA) lapses prior to the commencement of the MPRDA, the person that held such a right never held an “OOR” at the time when the concept exited for purposes of the MPRDA. This piece of the puzzle not only provides direction to the proper interpretation of section 43, but also scuppered previous attempts by the DMRE to widen the application of the definition of “residue stockpiles”, as I will elucidate below.

An analogous position was considered by the court in respect of “residue stockpiles” in the matter of Holcim South Africa (Pty) Ltd vs Prudent Investors (Pty) Ltd and others [2011] 1 All SA 364 (SCA). The position was further enunciated in Ekapa Minerals (Pty) Ltd and Others v Lucky Seekoei and others (2057/2016 [2017] ZANCHC 5. In this matter, in reference to Holcim (and other judgments) the court held that the insertion of the terms “old order right” in the definition of “residue stockpile” describing which entities were capable of creating a residue stockpile for purposes of the MPRDA, did not have the intended effect. ?The court held as follows:

“It follows then that the old order mining right of De Beers came into existence after the enactment of the MPRDA and endured until it’s conversion to a mining right under the MPRDA on seven May 2010. It stands to reason therefore the TMR‘s having been created long before 2004 were not created by the holder of an old order right as per the definition of “residue stockpile” (My emphasis)

Applied in context, the insertion of the words “holder of an old order right” can only denote a person who was at the very least capable of holding an OOR. A “holder”, in reference to an OOR, cannot denote the holding of any common law lease or mining authorisation prior to the enactment of the MPRDA.

As far as unconverted rights are concerned, Section 43(1) therefore, at best, binds a person who was in fact the holder of a common law lease or mining authorisation at the time of the commencement of the MPRDA, even if such OOR lapsed or was abandoned without conversion thereafter. This is the widest possible meaning of a “previous holder”.

However, if that lease or right lapsed at any time prior to the enactment of the MPRDA, no OOR ever came into being. The insertion of the word “previous” into the text of section 43(1) cannot, and did not change this position and section 43 of the MPRDA cannot be applied for purposes of “closure” of such a mine.

This conclusion holds surprising further implications for the Financial Provisioning Regulations as well as certain Listed Activities and the EIA Regulations insofar as they apply to mine closure, which I will explore in later articles.

[1] ?? To be distinguished from the narrower concept of an OOMR. Details discussed below.

[2]??? A natural person or legal person, i.e. and individual or company

[3] ?? Generalia specialibus non derogant

[4] ?? South African Mineral and Petroleum Law – Dale et al, service issue 35, 29 September 2023 at 276.2