South Africa's mining legacy is vast, encompassing operations predating the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA). This presents challenges in determining liability for mine closure, especially for "Old Mines" operating under the antecedent Minerals Act 50 of 1991 (MA).
”Old” in this context means mines that operated in terms of a common-law Mining Lease or Mining Authorisation issued in terms of the MA, which lease or authorisation lapsed prior to the commencement of the 2002 MPRDA, as amended.
This article aims to provide insight into how South African law is evolving to address the unique challenges posed by legacy mining operations.
More specifically, we evaluate:
- S 43 of the MPRDA (s 43), clarifying the definitions of "holder," "previous holder," and "previous owner of works," and untangling the complexities of "Old Order Rights" (OORs) and their implications for closure liabilities
- The ambiguities in the definitions contained in s 43
- The intricacies of applying the MPRDA retroactively, impacting liability for environmental remediation and sustainable closure; and
- Key distinctions, in context, between different types of mining rights and their respective holders, highlighting complexities arising from rights succession.
NAVIGATING THE CLOSURE OF OLD MINES AND SECTION 43 OF THE MPRDA: A LEGAL DEEP DIVE
SECTION 43 OF THE MPRDA
S 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.”
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 thus created:
- “Holders” of certain rights, including mining rights;
- “previous holders” of “Old Order Rights” (OORs); 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 apply to the previous owners of works or, naturally, “previous” holders of OORs, 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 s 11 as read with s 69(2)(a) of the MPRDA is not strictly speaking the person to whom the right was “granted” outright in the first instance, and thus was intended to ensure that such entities are also subject to the requirements of s 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 the 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 is accordingly liable under s 43 if they are:
- The previous owner of a “works”;
- The previous holder of an OOR;
- The holder (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 rights holders or their successors from the application of s 43 in two instances. That is, when such rights holders 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 rights holder 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)”(MHSA)
Although incorporated into the MHSA, the term “works” already existed under the repealed Mines and Works Act 27 of 1956 (MWA). 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 s 1 of the MPRDA 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 which also has 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 takes the matter no further.
OOR’s, OOMR’s and UOOR’s
Schedule II of the MPRDA defines an 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.”
In neither instance do the concepts denoted in the definitions of OOMR’s and UOOR’s accord with Tables 2 and 3 of the MPRDA. We support the approach that the listings in the Tables should take preference (or at least be incorporated) on the basis of interpretational law principles.
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 of limitation of the Schedule is evident from s 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 of 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 s 9 of the MA are listed in Table 2.
The definition evidently intends to identify unused, albeit extant rights 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 intended to support 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 s 43.
A mine whose Mining Lease or Mining Authorisation in terms of the MA lapsed prior to the commencement of the MPRDA (or its successor title) was never 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 to the definition in s 1 of the MPRDA, it is unnecessary to incorporate the Schedule definition into this analysis. The Schedule’s definitions are intended to align the content of Schedule II with the objective of rights succession only. This is not the scope or purpose of s 43.
If s 43(1) was merely intended to denote holders whose rights have been converted under the MPRDA, the reference to OOR’s is superfluous, because such holders are now in any event ordinary holders under the MPRDA. If, on the other hand, s 43(1) was intended to reference only those holders who hold extant OOR’s, use of the word “previous” would be superfluous. On plain reading therefore, it appears that the right does not have to be extant to invoke s 43(1) and the phrase “previous holder” used in s 43(1) is a clear attempt to depart from the narrower context of “holder” in the Schedule.
More specifically, this phrasing in s 43(1) apparently seeks to establish retrospective obligations in respect of any person or owner who was the holder of, in this instance, an OOMR at some point in the past. As pointed out by Dale, it appears that the language of s 43 seeks to align this provision not only with the retrospective provisions of s 28, but also with s 24R(1) of the NEMA.
But where is this point in the past? One can speculate endlessly on this, 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 mentioned, the concept of OOR’s was created by the MPRDA. Thus, if an authorisation (which would have been deemed to be an OOR at commencement of the MPRDA) lapsed prior to the commencement of the MPRDA, the person that held such a right never held an “OOR” at the time when the concept existed created for purposes of the MPRDA. This piece of the puzzle not only provides direction for the proper interpretation of s 43, but also scuppered previous attempts by the DMRE to widen the application of the definition of “residue stockpiles”, as I will elucidate in the following paragraph.
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 [2011] 1 All SA 364 (SCA). The position was further clarified in Ekapa Minerals (Pty) Ltd v Lucky Seekoei (2057/2016 [2017] ZANCHC 5. In this matter, referring to Holcim (and other judgments) the court held that the insertion of the terms “old order right” in the definition of “residue stockpile” to describe 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 its conversion to a mining right under the MPRDA on 7 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, s 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 s 43(1) cannot, and did not, change this position and s 43 of the MPRDA cannot be applied for purposes of “closure” of such a mine.
The analysis of s 43 of the MPRDA reveals significant nuances in determining liability for a mine closure. The interpretation of "holder" and "previous holder" are pivotal in determining which entities bear responsibility for environmental liabilities, including the management and sustainable closure of old mines. While the MPRDA aims to clarify these issues, ambiguities persist, especially concerning the treatment of mines that operated under previous legislation.
Understanding these distinctions is crucial for all stakeholders involved in mine closures in South Africa to ensure the responsible closure of all mines and the protection of the South African environment.
