Nationalisation of mineral rights in South Africa

Abstract

The Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) deprived landowners of the ownership of unexplored mineral and petroleum products and proclaimed mineral and petroleum resources to be “the common heritage of all the people of South Africa” with the State as the custodian thereof. Prospecting and mining rights in respect of “unused old order rights” and the conversion of “old order prospecting rights“ and “old order mining rights” into “new order” prospecting and/or mining rights have been subjected to radical time constraints and strenuous substantive conditions to be approved by the Minister of Mineral and Energy Affairs. Whereas the State in the past regulated prospecting and mining activities, mainly to secure safety measures and protection of the environment, the legislature has now imposed stringent requirements for the granting of prospecting and/or mining rights because it has become the owner of mineral and petroleum resources—either as personification of “the people of South Africa” or as a public trustee of “the heritage of all the people of South Africa.”

Section 25 of the Constitution of the Republic of South Africa distinguishes between deprivation of property, which is not subject to the payment of compensation by the State, and expropriation for which compensation must be paid. It is commonly accepted that expropriation is constituted by deprivation plus an additional element or elements. There are two possible factors that will convert a deprivation into expropriation: either the vesting of ownership of the rights of which the owner has been deprived in another entity, for example the State; or, as stipulated in Article 25, by depriving the owner of his or her rights in the public interest or for a public purpose. It is argued in this essay that the deprivation of mineral and petroleum resources amounted to expropriation under either of these two perceptions of expropriation.