Law firm raises concern over rights auction

[miningmx] — LEGAL firm Webber Wentzel says it is concerned about the Department
of Mineral Resources’ proposed auction of lapsed or revoked rights.

This came after Susan Shabangu, Minister of Mineral Resources, said in her Budget
Vote address to parliament last week that bidding for such rights would take place
before the end of June.

“After due consideration, I have decided to issue a proclamation in the
Government
Gazette
which will invite applications on revoked or lapsed rights,’ Shabangu
said.
“In this regard, rules that are aligned with the MPRDA will be clearly spelt out in the
Gazette.’

In a newsletter to clients issued on Thursday, Webber Wentzel’s African mining and
energy practice, headed by mining legal expert Peter Leon, said the firm intended to
engage with the DMR as the proposed auction might give rise to several legal issues.
This included the possibility that the process could contradict the first-in-first-
assessed principle enshrined in the Mineral and Petroleum Resources Development
Act.

“The process may potentially prejudice mining companies whose prospecting and
mining rights have been revoked in those circumstances where the DMR’s internal
appeals and any subsequent judicial review processes have not run their course,’
read the newsletter.

“The process may be of concern to investors and may possibly increase uncertainty
in relation to South Africa’s mining sector.’