Applying Section 53 of the Mineral and Petroleum Resources Development Act when Establishing a Township Development

Section 53 of the Mineral and Petroleum Resources Development Act, 28 of 2002, as amended, (“MPRD Act”) provides a mechanism for ensuring that, inter alia, the mining of mineral resources is not detrimentally affected through the use of the surface of land and which may, for example, result in the sterilisation of a mineral resource.

Section 53(1) of the MPRD Act provides that –

“[S]ubject to subsection (2), any person who intends to use the surface of any land in any way which may be contrary to any object of [the MPRD Act] or which is likely to impede any such object must apply to the Minister [of Mineral Resources] for approval in the prescribed manner.”

The rationale behind the requirement to obtain the Minister of Mineral Resource’s consent in terms of section 53 of the MPRD Act (“Section 53 Approval”) when making application for a township development and/or the rezoning of land forming part of a township development for residential and/or similar purposes on a piece of land in South Africa, is that such development may sterilise a mineral resource and/or impede any mining operations taking place in or on the land, which would be contrary to the objects of the MPRD Act. The objects of the MPRD Act include, inter alia, providing security of tenure in respect of persons who hold rights to prospect, explore and/or mine for such minerals and furthermore to ensure the promotion of equitable access to mineral and petroleum resources. The exceptions to obtaining a Section 53 Approval are outlined in section 53(2) of the MPRD Act and include, inter alia, the use of such land for farming or any use incidental thereto and where a land use scheme in its entirety has been approved by the Minister of Mineral Resources in terms of section 53(1) of the MPRD Act.

In a recent unreported judgment of Samancor Chrome Limited v Skyward Housing (Proprietary) Limited (WCC Case number: 11067/2015), the requirement to obtain a Section 53 Approval for a township development was considered by the Western Cape High Court. The Court granted an interdict against Skyward, a township developer, preventing the continuation of construction activities on a portion of land which is mineralised and which is subject to a Mining Right held by Samancor, until such time as Skyward obtains a Section 53 Approval. The interdict was granted notwithstanding the fact that the township, known as Waterkloof East Extension 34, had already been proclaimed and the land in question had been zoned for residential and similar purposes in accordance with the Town Planning and Townships Ordinance, 1985 (“TPTO”).

Although all other approvals required for a township development may have been obtained, a developer must be mindful of the fact that, in light of the objects of the MPRD Act, a Section 53 Approval is likely to be refused where, inter alia, it is evident that the land in question is mineralised, the mineral can be mined economically and a person already holds a Mining Right to exploit that mineral.

It is, however, worth noting that section 53 of the MPRD Act is of such broad application that not only is a Section 53 Approval required for the use of the surface of land which is the subject of, inter alia, a Mining Right, but is also required, for example, for the use of the surface of mineralised land over which no Mining Right or Prospecting Right has been granted as yet. The mere fact that a township development will sterilise minerals and/or impede potential future mining operations is a sufficient basis for the Minister of Mineral Resources to reject an application submitted pursuant to section 53 of the MPRD Act.

In the well reported Constitutional Court judgment of Maccsand (Proprietary) Ltd v City of Cape Town and Others 2012 (4) SA 181 (CC) (“Maccsand Judgment”), it was decided that the holder of a Mining Right is obliged to comply with the relevant zoning requirements and may, therefore, only commence mining operations if the zoning or consent use of the land allows it. Although the Maccsand Judgment addresses provincial legislation of application to, inter alia, the Western Cape, the legal principles established also apply to the application of the TPTO. In circumstances where a Section 53 Approval is only applied for by the developer after the township in question has been proclaimed and the land rezoned for residential and/or similar purposes, the applicable land use or zoning scheme may, as a result, prohibit the commencement or continuation of mining activities on the land concerned. In such a scenario, both the development of the surface of the land and the commencement of mining activities would be unlawful.

In order to prevent this inevitable stalemate, the holder of, for example, a Mining Right granted in respect of the land in question must be consulted and a Section 53 Approval should be obtained by a developer prior to the proclamation of the township and the rezoning of the land concerned. The development of a township on land which is simultaneously being mined will, in many instances, be impractical (or impossible) and possibly unlawful, particularly where a land use or zoning scheme strictly regulates the use of land for mining purposes. There are, however, instances where, township developers and holders of Mining Rights are able to co-exist, subject to the developer obtaining a Section 53 Approval and compliance with the applicable zoning requirements. This relationship would need to be regulated by a land use agreement whereby, for example, the mining of the mineral resource may have to take place prior to the establishment of the township to prevent the sterilization of such mineral resource.

Given the above complexities, it is advisable that a Section 53 Approval be obtained as early as possible in the township development application process so as to avoid incurring excessive costs which would result in a loss for the township developer if an application for a Section 53 Approval is refused.

Malan Scholes Inc.

Lili Nupen-Staude (Director)

Serika Singh (Senior Associate)

Lia Bolz (Associate)