Ownership of historic mine and tailings dumps and expropriation
Geldenhuys, Nicolaas Petrus
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When mining companies extract minerals from the earth, they leave huge deposits of soil and ore next to the mining site. These deposits are commonly known as tailings. In most instances, tailings contain a considerable amount of valuable mineral resources which cannot be exploited because of a lack of appropriate equipment, or as a result of economic non-viability. However, many mining companies choose to keep and maintain these tailings, in the hope that such minerals can later be exploited when time or technology allows for this. Under common-law the owner of a property is considered to also own any minerals contained on the property, in terms of the principle of cuius est solum. In South African law, however, a practice evolved whereby owners of minerals separated rights to minerals from the surface rights on the property. This created a mining right which was independent from the land and could be transferred to third parties, often in return for compensation. Under the Minerals Act of 1991 the owner of a mining right over a property (be that the owner of the property or a third-party mining right holder) also held the mining right to tailings which were created as a result of mining activities under the right. Thus, if a mining company performed mining activities on a property, the company was also free to exploit the tailings which were left next to its mine, regardless of whether the dump had remained there for a long period of time. Owing to South Africa's long history of mining, some tailings are over a century old and resemble small mountains rather than mining deposits. The Mineral and Petroleum Resources Development Act of 2002 changed the entire mineral legislative regime in South Africa. Whereas owners of land were previously free to separate and sell their rights to minerals to anyone they wished, the MPRDA placed the country‟s mineral and petroleum resources under the state's "custodianship." Where the law talks about custodianship, however, it supposedly refers only to minerals that have not yet been extracted from the earth. It is well established in South African law that, once a mineral is extracted, it becomes the movable property of the person who extracted it – in other words, that of the mining company. Does this mean that minerals in tailings also fall under the state's custodianship? The Free State High Court did not think so. In the case of De Beers v Ataqua it held that, in terms of the common law principles of acquisition by way of attachment, tailings are clearly movable property and therefore belong to the mining company who created them. For the MPRDA to hold otherwise would amount to expropriation. The state did not wish for some mining activities to be regulated by a different set of legislation, so it amended the MPRDA to try and define "residue deposits" (the name by which the MPRDA calls tailings) more clearly. However, due to the legislature's unfortunate choice of wording, tailings created before the enactment of the MPRDA are still, strictly speaking, not regulated by that Act. So the legislature proposed another amendment to the Act, this time making sure that any historical mine dump created at any point in South Africa's history are placed under the Act's regime. The subject matter of this study is whether the above amendments to the MPRDA could be considered to be expropriation. For background purposes, a brief overview of the Ataqua decision as well as the subsequent amendments to the MPRDA will be given. Then the history of mining legislation and the development of a separate mining right will be summarised. The reason for this summary is to establish whether, in terms of constitutional litigation, a clear right has been established for purposes of protection under section 25 of the Constitution. The last phase of the study will look at the particular characteristics of expropriation and ask the question whether acquisition of a right by the state is always a fundamental requirement for expropriation to take place. It is submitted that the destruction of an entire class of property by way of legislation, amounts to so-called "institutional expropriation," which is subject to compensation in terms of section 25.
- Law