Mineral and Petroleum Resources Development Bill: deliberations

Meeting report

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The aim of this report is to summarise the main events at the meeting and identify the key role players. This report is not a verbatim transcript of proceedings.

MINERALS AND ENERGY PORTFOLIO COMMITTEE
19 June 2002
DELIBERATIONS ON THE MINERALS AND PETROLEUM RESOURCES DEVELOPMENT BILL

Chairperson: Mr M Goniwe (NA)
Mr M Moosa (NCOP)

Documents handed out:
None
(Copies of the documents which are currently available in electronic format can be found on our website)

MINUTES
Minerals and Petroleum Resources Development Bill
Mr H. Smuts (State Law Advisers) in the absence of Mr E. Daniels addressed the Committee on the constitutionality of the Bill. He discussed the following issues:
(i) The Bill vesting minerals rights in the hands of the state
Mr Smuts reiterated the State Law Adviser's Office sentiments that the Bill would pass the test of constitutionality. He noted that the legal regime was being changed and that the state was to become the custodian of minerals rights. The rights of mining companies would be protected in the transitional arrangements of the Bill. The limitation on property rights was provided for in the Constitution and therefore the deprivation of old an order right does not amount to expropriation. The actions of the state in this regard were justified as it was in the interest of the nation.

(ii) Divestment of surface rights from the owner of land
Mr Smuts said that each case should be evaluated on its own merits. He noted that Clauses 51(3) and 51(4) does address the issue. Mr Smuts said that the Committee could amend the clause so as to allow for the payment of compensation to the owner of the land.

(iii) Clauses 51(5) and 52 of the Bill
Mr Smuts was confident that the clauses were constitutional because they were in interest of the public. He said that compensation was however to be paid by the state in this instance.

Mr I Davidson (DP) asked what was meant that only the legal regime of minerals rights had changed. He felt that this was incorrect and that there was a divestment of rights.

Mr Smuts said that in practice underlying agreements do exist and that the Bill would not purport to cancel these. Each scenario would be assessed on its own merits.

Mr Davidson felt that the response had not addressed his question.

Mr A Nell (NNP) asked how confident the State Law Advisers were of their opinion.

Mr Smuts said that he was 100% confident but that he Constitutional Court would have the final say in the matter.

Mr Bell said that if the landowner was entitled to claim compensation. Who would he claim it from, the state or the mining company?

Mr Smuts said that the underlying agreement between the landowner and the mining company would contain the specifics of the compensation payable.

Mr Moosa said that he understood that the Constitutional Court did not regard a mineral right to be a property right as was envisaged in Section 25 of the Constitution. Mineral rights were not to be regarded as universal rights. What measure of success would the state have in regulating such a right? Would it be legally sound?

Mr Smuts said that he fully agreed with Mr Moosa's sentiments.

The Committee commenced with discussions on the process and the possibility of completing the Bill by the Friday June 21, 2002.

Members were once again urged to only discuss clauses that were of specific concern to them.

Chapter 4: Mineral and Environmental Regulation
Clause 20: Granting and duration of a mining right
Mr Moosa was convinced that the concerns of the industry had been addressed in the transitional arrangements ie old order rights. If requirements for a workplan had been met then the duration of a mining right would be extended for a further 30 years.

Mr Davidson was concerned about the fact that where an permit had been granted for mining, mining had to commence within a specified period or else the right would be lossed. He felt that the situation could be remedied by redefining a workplan. Mr Davidson said that it would not be economically viable to grant mining rights to a variety of applicants within a specific area. In doing so mining would take place in a very haphazard manner.

Mr I Mohamed (ANC) made a suggestion that mining sites around a particular reef should be granted to one company, as mining was a very capital intensive and technological activity.

Mr Nash (ANC) felt that the clause should stay as it was.

Mr Goniwe asked how the Department would prevent greedy companies from hoarding rights at the expense of disadvantaged persons.

Mr Davidson felt Mr Mohamed's suggestion to be a good one. He emphasized that he was not in favour of hoarding but sometimes provision should be made for natural extensions.

Mr Rocha noted that issues that were under discussion had been covered in the transitional arrangements. It was not provided for in Clause 20.

Clause 23: Mineral Beneficiation
Mr Nell and Mr Davidson was concerned about Clause 23(3) which required companies to obtain the written permission of the Minister in order to beneficiate minerals abroad.
Mr Nell said that he would vote against the clause as it plainly discourages investors to invest in SA.

Clause 24: Application for, issuing and duration of mining permit
Mr Davidson was concerned about Clause 24(6)(a) which allowed for the expropriation of the land of the landowner.The Department was asked to address the concern.

Clause 27: Disclosure of information
Mr Davidson asked what was the need for such information. He felt it unfair to expect the company to disclose the prospecting information given the expenditure that had gone into it.

Mr Rocha (Department) said that the information was to be used for minerals development.

Ms L. Xingana (ANC) said that the information should be disclosed if mining was not to commence. This would give another prospective miner the opportunity to mine the land that you do not wish to mine.






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Appendix 1