|dc.description.abstract||The Mineral and Petroleum Resources Development Act introduced a new
mining law dispensation. This Act has implications for mineral right holders.
Up to 1 May 2004, the right to prospect or mine vested in the holder of the
mineral right concerned under the system of private ownership as set out in
the Minerals Act 50 of 1991. The 2002 Act which is premised on the
principle that minerals as a natural resource are part of the natural heritage
of all South Africans, eliminates the concept of private ownership of mineral
rights and vests the right to prospect or mine exclusively in the state.
Mineral rights were always assets in the estate of a person and were
handled in the administration of the estate. The question is whether mineral
rights and royalties are still assets of the estate under the 2002 Act.
New applicants under the 2002 Act will have to apply directly to the state
for the right to prospect and mine, regardless of the identity of the previous
holder of the relevant right. Holders of existing (old order) rights will have an
opportunity to ensure the ongoing validity of these rights by complying with
the conversion criteria contained in the 2002 Act. New order rights issued or
converted under the 2002 Act differ from old order rights insofar as their
duration, transferability, mortgage ability and the royalties payable thereon.
Although the new order rights are still referred to as limited real rights in
article 5 of the 2002 Act, these converted rights are more restricted in
content. These new order rights cannot be ceded, transferred, let, sublet,
assigned, alienated or otherwise disposed of without the written consent of
Except for the transitional arrangements in Schedule 2, the 2002 Act would
terminate the notion and use of the vehicle of mineral rights. When
comparing the new order rights to the old order rights, the question of
deprivation and expropriation arises. It is not clear exactly when a claim for
compensation for expropriation of property arises and what the term of the
period of prescription would be.
The duration of the new prospecting right and mining right are statutorily
regulated. In drawing a comparison between the old order and the new
order rights, a distinction may be drawn between:
(a) Situations where the holder of the old order right would be successful
with his application for conversion to a new order right;
(b) Situations where the holder of the old order right was unsuccessful
with the application for a conversion of rights;
(c) Situations where the holder chooses not to apply for conversions at
Financial benefits to be derived from former mineral rights are also affected.
The right to receive royalties may be protected under the constitutional
property clause and a withdrawal of these rights from the private sphere and
the assignment thereof to the state may represent a deprivation of property
in the constitutional sense.
Royalties to communities and natural persons may continue to them after
the 2002 Act, but the position of legal entities and trust remain insecure.
All these changes will affect the estate and the estate planning of the
landowner and the holder of mineral rights.
In this mini-dissertation all the important provisions regarding estate
planning will receive attention. Transferability of the new order rights,
royalties, and the effect of the new law on the value of property in the
estate, will be looked at.||