The question before the court was the power of the Minister of Mineral Resources and Energy (the Minister) under section 100(2) of the Mineral and Petroleum Resources Development Act (MPRDA) to make law in the form of subordinate legislation, and whether the 2018 Charter constitutes law or policy.
The matter was heard before a full bench comprised of J Kathree-Setiloane, J van der Schyff and AJ Ceylon AJ. The court ruled in favour of the Minerals Council, with Kathree-Setiloane writing the judgment and van der Schyff and Ceylon concurring.
The Minerals Council had brought an application, under the Promotion of Administrative Justice Act 3 of 2000 (PAJA), seeking to review and set aside certain clauses of the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (the 2018 Charter).
In the alternative, the Minerals Council sought a declarator that the challenged clauses are inconsistent with the principle of legality and should be set aside.
The Minister argued that section 100(2) of the MPRDA empowered him to make law through the development of the 2018 Charter and that the 2018 Charter thus constitutes a sui generis form of legislation which is binding on the holders of mining rights.
The Minerals Council contended that the 2018 Charter is a formal policy document developed by the Minister in terms of the MPRDA and is therefore binding on the Minister when he considers applications for mining rights, in accordance with section 23(1)(h) of the MPRDA.
This provision permits the Minister to grant a mining right only if, amongst other things, the grant would be in accordance with the charter contemplated in section 100(2) of the MPRDA.
In light of the above, Kathree-Setiloane declared, inter alia that:
The judgment is explicit that the 2018 Charter is not binding legislation, It is only binding on the holder of a mining right to the extent that its terms were lawfully incorporated by the Minister into the mining right.
The implication of the judgment is therefore that a mining right holder will not be required to "top up" its empowerment credentials on renewal of the mining right and will have more flexibility in structuring empowerment transactions. The judgment is sound in law but is likely to be appealed.