16 October 2014 by Mining and Minerals Alert

Use of corporate vehicle by community for application of preferent prospecting right or mining right in terms of s104 of the Mineral and Petroleum Resources Development Act, No 28 of 2002.

The Supreme Court of Appeal on 26 September 2014 in the cases of Bengwenyama-ya-Maswazi Community v Genorah Resources (Pty) Ltd (784/2013) [2014] ZASCA 140 and Bengwenyama-ya-Maswazi Community v Minister for Mineral Resources (783/2013) [2014] ZASCA 139 held that:

  • a corporate vehicle (incorporated company) could rightly be said to be the community for the purposes of an application in terms of the MPRDA;
  • the Bengwenyama-ya-Maswazi Community satisfied the qualifying criteria set out in the MPRDA and that the Tribal Council had an existence in law and that in the circumstances of the case it was the authoritative voice of the community;
  • a minimum threshold shareholding satisfied the requirements of the MPRDA in relation to community benefit and control and that the lack of present registered title not an impediment as the community instituted a claim for land restitution. There is an overwhelming probability that it will be granted and that land would be registered in its name;
  • the concerns expressed by Constitutional Court in Bengwenyama Minerals (Pty) Ltd v Genorah Resources (Pty) Ltd 2011 (4) SA 113 (CC) not heeded by the Department of Mineral Resources and Genorah Resources (Pty) Ltd; and
  • the decision to grant mineral rights to Genorah Resources (Pty) Ltd was rightly set aside by the court.
  • Relevance:
  • corporate entities contemplated in terms of the Companies Act, No 71 of 2008 in which recognised traditional communities are the holders of the shares (through which such community will directly benefit) will be deemed as a 'community' in terms of s104 of the MPRDA should such entity apply for a preferent prospecting right or mining right; and
  • a community which has a legitimate expectation 'to become' the registered owners of land is entitled to apply for a preferent prospecting right or mining right.
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