JOHANNESBURG (miningweekly.com) – The South African government has agreed to a two-month stay of an international arbitration in which Italian granite-miners claim that their mineral rights are being expropriated by South Africa's minerals legislation.

The South African government said on Tuesday that the claimants had alleged that South Africa's Mineral and Petroleum Resources Development Act (MPRDA), No 28 of 2002, and South Africa's broad-based black economic-empowerment/mining charter, had expropriated the indirect interests that the granite-miners held in the South African granite-quarrying sector and had otherwise violated the bilateral investment treaties that had been signed between South Africa and Italy and Belgium/Luxembourg.

In the matter of Foresti against the Republic of South Africa, the two-month stay, the government said in a media release, had been designed to give the granite miners time to assess the viability of their expropriation claims.

South African attorney Peter Leon has played a leading role in the arbitration, which was brought before the International Centre for Settlement of Investment Disputes (ICSID) in terms of the bilateral trade treaties.

The South African government said that  the ICSID’s arbitral tribunal, a World Bank body, had given effect to the stay, which had come into being on March 28 and which would expire on May 28.

The South African government’s agreement to the stay followed its submission on March 27 of a 450-page memorial, accompanied by four witness statements, five expert reports on several specialised disciplines, and 19 volumes of documentary evidence and legal authorities.

During the stay period, South African quarrying companies, indirectly owned by the claimants, would be expected to complete their lodgement of "old-order" rights for conversion into “new-order” rights, subject to compliance with the MPRDA and mining charter, to enable the company to prospect or mine for minerals.

The South African government’s pleadings comprehensively addressed the claimants’ assertions, as to both their admissibility and their merits.

Several individuals of Italian descent and a Luxembourg corporation under their ownership had brought the Foresti case forward.

The stay had been agreed to facilitate the lodgement process, consistent with the MPRDA. In the light of the MPRDA conversion process and government’s comprehensive international law pleadings, it would be for the claimants to assess the viability of continuing their arbitration claims.

The South African government had consistently maintained that the MPRDA conversion mechanism amply protected security of tenure of mining/prospecting rights and complied with South Africa’s commitments under international law.

At the same time, the MPRDA and mining charter, the government contended, were vital elements of the constitutional commitment to transformation, including the creation of opportunities for historically disadvantaged South Africans to participate meaningfully at all levels of ownership, management and labour in the mining industry.

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