Clarity on the interpretation of Section 11 of the MPRDA
According to section 11 of the Mineral and Petroleum Resources Development Act 28 of 2002, prior consent from the Minister of Mineral Resources and Energy is required when ceding, transferring, letting, subletting, assigning, alienating, or disposing of a prospecting right, mining right, or any interest in such rights. This requirement also applies to controlling interests in companies or close corporations that hold prospecting or mining rights. However, it is worth noting that listed companies are exempted from this consent requirement when there is a change of controlling interest.
Although section 11 does not specifically address direct or indirect cessions, transfers, leases, and changes in control in a company that holds a prospecting or mining right, a recent landmark judgment by the Supreme Court of Appeal sheds light on this matter. In the case of Vantage Goldfields SA (Pty) Ltd & Another v Arqomanzi (Pty) Ltd & Others (733/2022) [2023] ZASCA 106 (27 June 2023), the Court held that section 11 must be interpreted to include both direct and indirect cessions, transfers, leases, and changes in control in a company that holds a prospecting or mining right.
This means that if there is a change in the controlling interest of the ultimate shareholder, leading to a subsequent change in the controlling interest in the company holding the prospecting or mining right, Ministerial Consent is required in terms of section 11 even though it is an indirect change in controlling interest.
For more details regarding this judgment, read the full judgment here: https://lnkd.in/dycsKkVi
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