Moratorium likely beyond Zwane’s power – law firm

JOHANNESBURG (miningweekly.com) – A controversial proposed mineral rights moratorium may very well be beyond the scope of Mineral Resources Minister Mosebenzi Zwane's powers.

Zwane last week gazetted an invitation to comment on a proposal to restrict the granting of new mining and prospecting rights applications and to restrict the renewal and transfer of any existing prospecting and mining rights, stating that it was in the national interest and promoted the sustainable development of the nation’s mineral resources.

“The Minister’s intended decision is arguably ultra vires – beyond the Minister’s powers – as it appears to be an irrational and unreasonable exercise of the Minister’s power under section 49(1) of the Minerals and Petroleum Resources Development Act,” business law and litigation firm Fasken Martineau responded in a statement.

The firm added that the Chamber of Mines was justified in its decision to challenge the Minister on this point, requesting a withdrawal of the notice, failing which it will be forced to, yet again, turn to the courts, as it has done regarding the recently gazetted Mining Charter Three.

“The Act does not permit a blanket moratorium in respect of applications for the entire country and in respect of all minerals, effectively halting the entire mining industry,” Fasken noted.

According to the Act, the Minister may restrict or prohibit the granting of any new prospecting or mining rights only in the cases of national interest; within the need to promote the sustainable development of the country’s natural resources; taking into account the strategic use of the mineral in question; and the identification of a piece of land by the Minister.

“Section 49 does not explicitly empower the Minister to prohibit or restrict the transfer or renewal of existing rights, which limitations he has sought to include within the ambit of his proposed restriction,” the firm added.

“It is certainly debatable whether the Minister’s proposed restriction meets the substantive objectives of section 49,” it stated, adding that the Minister was required to identify the land and determine a specific mineral or a class of minerals.

In addition, the section requires the Minister to determine a period for the prohibition or restriction.

Zwane’s notice fails to do this and his decision, if implemented on this basis, is likely to be reviewable in terms of the Promotion of Administrative Justice Act.

“With the industry debating its next step, it remains arguable whether an application to court is premature at this stage in the process, as the notice, on the face of it, is merely a call for comment,” Fasken cautioned.

The current remedy for any affected party would be to make its representations, including the basis of ultra vires and irrationality, as part of the consultation process.