South Africa had a dual ownership model for mineral rights, where part of the mineral wealth was held in private hands and part was held by the state. The private ownership was based on the law of property and provided long-term security of tenure for those involved in mining.
A distinguishing feature with this mode of ownership was that almost all privately-owned mineral rights were in white hands where other races were palpably excluded from participating in such.
On the other hand, the state ownership took different forms wherein the Transkei, Bophututswana, Venda and Ciskei (TBVC) states and self-governing territories, mineral rights were owned by those states and territories in terms of the South African Development and Trust Act, 1936 which provided for the vesting of these rights in the South African Development Trust (SADT) on behalf of blacks.
Others were held by government in trust for specific traditional communities; these included those which vested in Lebowa Minerals Trust (LMT) under the Lebowa Minerals Trust Act, 1987 and the Ingonyama Trust (IT) under the Ingonyama Trust Act, 1994.
Provision was also made for the vesting of trusteeship in the South African government in cases where land together with minerals was held by communities. Mineral rights in Namaqualand governed by the Rural Areas Act, 1974 were regarded as state-owned.
The 1998 White Paper on Minerals and Mining enunciated the international norm of vesting custodianship of mineral right to State as articulated in Article (2)(1) of the United Nations (UN) Charter of Economic Rights and Duties of States, granting states full permanent sovereignty, including possession and disposal over all its natural resources. This position is further supported by the Constitution of South Africa (SA) in terms of which the state is bound to take legislative and other measures to enable citizens to gain equitable access to rights in land.
The Mineral and Petroleum Resources Development Act 2002 (MPRDA), as promulgated in May 2004, gives effect to the notion of state custodianship of mineral rights.
The foreword of the MPRDA recognises the mineral wealth as a national asset, a common heritage that belongs to all in South Africa and pronounces the state as the custodian thereof. This is further enunciated in Section 2(a) of the Act as it acknowledges the right of state to exercise sovereignty over the entire mineral and petroleum resources within the republic. The policy on minerals and mining does not make provisions for nationalisation of mining assets, but it does not preclude the state from participating actively in mining. For this reason, a state diamond mining company, Alexkor, has been operational throughout the transitional phase of introducing the new regulatory framework.
Accordingly, the African Exploration, Mining and Financing (Pty) Ltd (wholly state-owned company) was resuscitated in 2007 to undertake mining of minerals of strategic significance to South Africa. The DMR has completed the auditing of state exposure to mining and is preparing a proposition to Cabinet to create a vehicle of consolidating all state mining assets in one vehicle, which will maximise the impact and benefits, in line with the developmental agenda of State.
Enquiries:
Vincent Magwenya
Cell: 072 715 0024
Issued by: The Presidency
23 February 2010
