CHAPTER 16 PRACTICAL CONSIDERATIONS OF THE ACQUISITION OF PROSPECTING AND MINERAL RIGHTS IN THE REPUBLIC OF SOUTH AFRICA, HOW TO PRESERVE THE RIGHTS, HOW TO CONVEY THE RIGHTS AND HOW TO SECURE THE RIGHTS

• Jurisdiction: United States

International Minerals Acquisition and Operations
(Oct-Nov 1974)
CHAPTER 16
PRACTICAL CONSIDERATIONS OF THE ACQUISITION OF PROSPECTING AND MINERAL RIGHTS IN THE REPUBLIC OF SOUTH AFRICA, HOW TO PRESERVE THE RIGHTS, HOW TO CONVEY THE RIGHTS AND HOW TO SECURE THE RIGHTS
J. E. Wagner
Van Hulsteyn-Duthie
Johannesburg, South Africa

INDEX AND TABLE OF CONTENTS

SUBJECT MATTER	PARAGRAPHS	PAGE/S (Paper 16)
Acquisition of Mining Rights	20	28 — 30
Acquisition of Mineral rights	12	14 — 15
Definition of a mineral	2	3 — 6
Definition of base minerals	6	9
Definition of natural oil	7	9 — 10
Definition of precious metals	5	8 — 9
Definition of a prospecting contract	11	13 — 14
Definitions of restricted material, source material and special nuclear material	9	10
Department of Mines	15	16
Determination of the Status of land for prospecting and mining purposes	4	7 — 8
Different classes of land	3	6 — 7
Disposal of mineral rights	13	15
Disposal of rights held under a mining lease	14	15 — 16
First contact in order to obtain prospecting and mining rights in South Africa	16	16 — 17
Foreigners	18	17 — 18
How mineral rights are held in South Africa	1	1 — 3
Recommended procedure before prospecting contract is obtained	10	11 — 13
Rights of the holder of mineral rights vis-a-vis the owner of the surface	19	18 — 28
Statutes	17	17
Supplementary information	21	30 — 37
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Bibliography	38 — 41
List of Authorities	42 — 45

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:HOW MINERAL RIGHTS ARE HELD IN SOUTH AFRICA

1.1. Land in the Republic of South Africa is held by the State and privately.

1.2. In the case of private ownership you have land held by natural persons and by corporate bodies, which include registered companies with limited liability and voluntary associations, such as clubs, societies and religious bodies.

1.3. In some countries in the world mineral rights are held exclusively by the State, and in consequence the prospecting and exploitation of minerals can only be undertaken by an authority issued by the State.

1.4. This, however, is not generally the position in South Africa, where mineral rights are held by the State and privately.

1.5. Where mineral rights are held by the State together with the surface of the land then all authorities to prospect and mine minerals must be obtained from the State.

1.6. Where, however, the mineral rights are held privately then the right to prospect minerals must be obtained from the private individual, but as I will indicate

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later, there are certain minerals in respect of which a private individual can grant the right to prospect but actual prospecting and mining operations cannot be undertaken without the authority of the State.

1.7. In cases where land as to the surface was formerly held by the State, but the surface has been alienated with a reservation of mineral rights to the State, then the right to prospect and the right to apply for mining rights in the first instance must be obtained from the private individual, who by statute law has been granted certain sole and exclusive rights to prospect and to apply for mining rights.² .

1.8. It is, therefore, absolutely necessary to ascertain beforehand how the surface of land and the mineral rights in respect thereof are held before an appropriate approach is made, but I will deal with this aspect later in full detail, but the point which I wish to emphasise is that you do not necessarily have to go to the State for prospecting and mining rights, although you have to do so in respect of certain minerals.

1.9. You will be surprised to know in how many cases the owner of the surface of land is erroneously under the impression that he is also the holder of the mineral rights, and if the aforesaid check is not made beforehand a prospector might find on a valuable discovery that he is not dealing with the real owner with probable consequent loss of valuable deposits or being held to ransom by the true owner following a valuable discovery.

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1.10. In many instances in South Africa both land and mineral rights are held in undivided shares by several people, and it speaks for itself that where you are concerned with undivided shares you must ensure that you have acquired the necessary rights from all undivided owners. If you hold rights from one undivided owner only and a valuable discovery is made you will find that before you are able to exploit your rights you must obtain the necessary rights from the remaining undivided owners with a probable consequence that you will be held to ransom or be unable to exploit your rights.

1.11. While according to South African law you can prospect land held in undivided shares if you hold the right to prospect from one of the undivided owners, you simply cannot exploit your rights unless all undivided owners have consented.

:DEFINITION OF A MINERAL

2.1. There is no definition in South African Statute law of "a mineral" and this is significant for the reason that it was probably considered by the legislature that to attempt any definition would be dangerous, but I will nevertheless state the law of South Africa on this subject.

2.2. In the widest sense of the word there is almost nothing mined or taken from under the ground in South Africa which is not a mineral, which may be taken to mean any portion of the earth's crust, not being animal or vegetable. Interpreting the meaning of the words "minerals and mineral deposits", they must not be given a scientific or extraordinary meaning, but they must be explained in accordance

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with the usual and common meaning given to them in South Africa.³ .

2.3. In a case decided in the Supreme Court of the Transvaal in 1905 the following authoritative statement was made :-

"As to the scientific definition of the word 'mineral' after hearing a great deal of evidence from experts, it appears that the word may be used in at least two senses. First, in a very wide sense it may be taken to mean any portion of the earth's crust, not being animal or vegetable, but in its more specific sense it means an inorganic substance having a definite chemical composition and possessing characteristics not easy to define. Speaking generally, it has a crystallisation of its own and a certain degree of hardness and specific gravity".⁴

2.4. We in South Africa very often go to the Law of England for assistance in certain matters and in Halsbury's Laws of England I have found the following statement :-

"There is no general definition of the word 'mineral'. The word is susceptible of expansion or limitation in meaning according to the intention with which used; and the variety of meanings of which it admits is the source of all the difficulty in the attempt to frame any general definition.

It is a question of fact whether in particular cases a substance is a mineral or not, and for this purpose instruments between private persons are subject to the same rules of construction as

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Statutes. Regard must be had, not only to the word employed to describe the substance in question, but also to the relative position of the parties interested, and to the substance of the transaction or arrangement which the instrument or statute embodies.

The test of what is a mineral is what, at the date of the instrument in question, the word meant in the vernacular of the mining world, the commercial world and among landowners, and in case of conflict this meaning must prevail over purely scientific meanings. There are, however, other circumstances to be taken into account. The intention with which the word is used may be inferred from the document itself, or from consideration of the circumstances in which it was made. In the case of the document itself the inference may be drawn from a comparison of other parts of the document or from the immediate context. Whether or not the substance in question is worked for the purpose of profit is irrelevant : so also is the method of working. The word 'mineral' does not comprise the space occupied or formerly occupied by the mineral substance, although the word 'mine' may. The word most commonly found in immediate collocation with the word 'minerals' is the word 'mines', as in the term 'mines and minerals', or its equivalent, 'mines of minerals'. Although the word 'mine' primarily refers to underground workings, yet so used it does not narrow the meaning of 'minerals', and the term prima facie includes minerals which can be got by surface workings. Moreover, the fact that the owner of the minerals is not entitled to get minerals by surface workings is not sufficient to restrict the meaning of minerals; the meaning may be restricted by proof of a custom the existence of which is incompatible with the prima facie meaning or by the particular circumstances of the case being such as to lead to the inference that all minerals cannot have been intended to have been referred to. The onus of proof that a particular substance was at the date of the document to be construed, or is at the present day, to be regarded as a mineral is upon those raising the contention, and it will be assumed that the meaning in question was the same as it is at the present day, unless there is evidence to the contrary. Where, however, there is

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a contract, the meaning to be applied will be the meaning at the date of the contract, even though a considerable period elapses before the form of conveyance is executed.

For all practical purposes "minerals" and "mineral substances" are symonymous terms, and the meaning of the latter depends on the expressed or implied intention with which the words are used, as much as the former, and accordingly what is said in the authorities as to the meaning of the word "mineral" applies with equal force to the word "mineral substances".⁵

:DIFFERENT CLASSES...