A government notice exempting a state-owned entity from applying for prospecting and mining rights is at risk of being legally challenged on grounds that the then minerals and energy minister acted beyond her powers.
A notice published in the Government Gazette last year exempted the state-owned mining company, Exploration Mining & Finance Corporation, from various provisions of local mining law.
These include two sections of the Mineral and Petroleum Resources Development Act (MPRDA) relating to applications for prospecting and mining rights without which no-one may explore for, or mine, minerals.
The CEO of the company, which was resurrected last year after being dormant for several decades, has recently been reported as indicating that its first mining projects will become operational by the end of 2010.
Matthew van der Want, senior associate with legal firm Bell Dewar, says that the purported effect of the minister's notice is that the state-owned company will not need to apply for, or be granted rights, under the MPRDA before it is allowed to prospect or mine.
He says the relevant section 106(1), provides that the minister may by notice exempt an organ of state "in respect of any activity to remove any mineral for road construction, building of dams or other purpose..."
Van der Want says that this section has, in the past, been used to exempt organs of state such as municipalities from having to apply for a mining licence when digging to build a road, for example. "The purpose of these sections is simply to remove unnecessary regulatory hurdles faced by organs of state when building infrastructure."
A legal rule which applies to the interpretation of legislation will apply to this section of the MPRDA. This rule provides that if a law specifies a list followed by a general term must be interpreted restrictively to include only things which fall within the category of things specified in the list. In the above example, "other animals" would refer only to reptiles. Thus, the "other purpose" referred to in section 106(1) of the MPRDA must be a purpose similar to that specified, ie constructing roads or dams.
Van der Want says the Minister has, however, identified the other purpose in the notice she published last year as "any activity to prospect, mine and the removal of any mineral for accumulating and stockpiling for purposes of security of supply and purposes incidental thereto." This clearly falls outside the purpose envisaged by road construction and building of dams and there is a strong argument that the minister acted beyond the powers given to her by section 106(1). The minister's notice is therefore vulnerable to being set aside on that basis.
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