Legislative governance and transformation in the South African mining sector : the legal nature of the 2018 Mining Charter

Abstract

Historically, mineral rights in South Africa were regarded as valuable assets in the hands of landowners, based on the property law principle of cuius est solum, eius est usque ad coelum et ad inferos. The principle describes the vertical extent of a landowner's right to land; to include not only the surface, but also the substrata and airspace. Accordingly, the owner of a piece of land had the exclusive rights associated with ownership over the minerals beneath such land. Regrettably, because of the colonial and apartheid policies that applied in the country, land ownership generally resided in the hands of the white minority. Consequently, the majority of black South Africans were denied access to mineral rights as they either could not afford land, or were denied access through erstwhile Natives Land Act of 1913. Following democratisation in 1994, a changing political and economic landscape redefined the property rights paradigm within which mineral resources are regulated from private ownership to state custodianship. The introduction of the Mineral and Petroleum Resources Development Act 28 of 2002 (the MPRDA) brought about fundamental changes in the mineral resources sector. The MPRDA effectively advocates for equitable access to the nation's mineral resources. One of its objectives is to substantially and meaningfully expand the opportunities of Historically Disadvantaged South African's (HDSAs) to participate in the exploitation of mineral and petroleum resources. The provisions of section 100(2) of the MPRDA placed an obligation on the Minister of Mineral Resources and Energy to develop a Broad-Based Socio-Economic Empowerment Charter (hereinafter referred to as the Mining Charter or the Charter) to redress historical socio-economic inequalities in the South African minerals industry. Notable issues arose following the Minister of Mineral Resources and Energy's contention to suggest that section 100(2) empowers him to develop a Mining Charter (2018) in the form of subordinate legislation to achieve transformational objectives. It follows that the Mining Charter might constitute subordinate legislation that is legally binding to mining rights holders. The legal nature of the Mining Charter however remained contested. The necessity for clarity and certainty in relation to the legal nature of the Mining Charter became particularly evident in tensions between the mining industry and Minister of Mineral Resources and Energy. In March 2019, the Minerals Council South Africa brought an application for judicial review of the Mining Charter. The Court in Minerals Council South Africa v Minister of Mineral Resources and Energy, and Others (Case no. 20341/19) held that the MPRDA does not empower the Minister to make law, and as such, the Mining Charter is not binding subordinate legislation but rather an instrument of policy. In order to determine whether the Charter's implementation is conducive for transformation, the primary objective of this mini-dissertation is to assess and evaluate the efficacy of the legal nature of the Mining Charter in transforming the South African mineral sector, as contemplated through Minerals Council South Africa v Minister of Mineral Resources and Energy, and Others (Case no. 20341/19 [21 September 2021]).