On 10 May 2012, the Minister of Mineral Resources (the Minister)
announced in her Parliamentary budget vote speech that the
Department of Mineral Resources (the DMR) planned, before the end
of June 2012, to commence the first round of the 'auctioning
off' of prospecting and mining rights which have lapsed under
section 56 of the Mineral and Petroleum Resources Development Act,
2002 (the MPRDA).
The Minister's announcement follows previous notices
published in the Government Gazette on 9 May 2011 and 6
February 2012 (the 2012 Notice), in which the DMR:
invited stakeholders to make representations on its intended
restriction of the grant of new reconnaissance permissions,
prospecting rights, mining rights and mining permits (Rights) over
any land in respect of which Rights had lapsed under section 56 of
the MPRDA; and
advised stakeholders that, subject to certain exceptions (one
such exception being the intended 'auction'), a five year
restriction would be placed on the grant of any new Rights over any
land in respect of which any Rights had previously lapsed under
section 56 of the MPRDA.
The 2012 Notice indicates that further notices will be published
in the Government Gazette, in which the DMR will identify
the prospecting and mining rights which will be subject to the
Minister's invitation for applications. These additional
notices will also prescribe the criteria to be applied by the
Minister in assessing the merits of the applications received
pursuant to an invitation for applications. Somewhat confusingly,
the 2012 Notice also states that the criteria to assess these
applications "will be limited to the criteria provided for in
Webber Wentzel intends to engage with the DMR as its proposed
course of action may give rise to several issues, including the
the DMR's proposed 'auction' process may contradict
the first-in-first-assessed principle enshrined in section 9 of the
MPRDA (which is a general feature of international best
the process may be of concern to investors and may possibly
increase uncertainty in relation to South Africa's mining
the process may potentially prejudice mining companies whose
prospecting and mining rights have been revoked in those
circumstances where the DMR's internal appeals and any
subsequent judicial review processes have not run their course.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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