South Africa’s Mineral Resources Minister, Susan Shabangu, has moved quickly to avoid a repeat of the Sishen iron-ore rights controversy.

The Minister told Mining Weekly on the sidelines of Optimum Coal’s listing on the main board of the JSE that a new step in mineral rights issuing would involve South Africa’s Council for Geoscience, a statutory body charged with the responsibility of disseminating basic mineral deposit information.

Instead of applying directly to the Department of Mineral Resources (DMR) for mineral rights, Shabangu told Mining Weekly in a video interview, applicants would from mid-June be required to deal in the first instance with the council.

As part of the internal review process that had been set in motion as a result of the controversy, mineral rights availability would be located within the geological body.

“In the past, we didn’t have a system. Now we’re putting up a system where what is available can be accessed through the Council for Geoscience,” Shabangu told Mining Weekly.

Lapsed mineral rights would in future be automatically posted on the council’s charts.

“They will show through charts what is available and, on the basis of that, you will decide what to tap,” Shabangu said on the eve of the two-day Mining Summit, which took place in the Drakenberg last week.

Should mineral rights be available to an applicant, the applicant would decide whether or not to apply to the DMR for it.

“We will separate the two processes. What is available will not reside with us. It will reside with the Council for Geoscience.”

The DMR would then determine whether or not the application complied with legislation.

“If you are compliant, then we will hand it over to you,” she added.

The iron-ore rights handed down to the little-known Imperial Crown Trading 289 could not be reversed to the Council for Geoscience, however.

“For this particular one, I will have to apply my mind,” she said, adding that she would decide how best it could be taken forward.

Imperial Crown Trading 289’s application involved the 21,4% undivided share of the Sishen iron-ore mine in the Northern Cape, which is mined by Sishen Iron Ore Company (SIOC) on behalf of steel group ArcelorMittal South Africa (AMSA).

SIOC notified AMSA in February that it had cancelled a discounted iron-ore supply deal, priced at cost plus 3%, on the basis that the steel group had failed to convert its mineral rights in line with the provisions of the country’s postapartheid Mineral and Petroleum Resources Development Act (MPRDA), which saw the country’s mineral rights fall under State custodianship – miners and prospectors had until April 30, 2009, to meet the conditions necessary to secure their rights and licences.

SIOC and Imperial Crown Trading 289 both applied for the ‘lapsed’ rights on May 4, 2009. But it emerged that the DMR had decided to grant prospecting rights to the latter, despite that fact that the property has had an operating mine on it since the 1950s, and despite SIOC’s well-established black economic-empowerment (BEE) credentials.

SOIC, which is 74%-owned by Anglo American’s Kumba Iron Ore, also has BEE miner Exxaro as a partner, as well as Sishen employees and surrounding communities.

The DMR confirmed receipt of “written representations” from SIOC subsequent to the granting of the prospecting rights to Imperial Crown Trading, and acknowledged that these had raised “various concerns of a legal and technical nature”.

“Having perused the written representations by SIOC, the department is of the view that the company’s concerns warrant further investigation into the legal and technical aspects of the matter,” the DMR said, adding that the review process to be followed was provided for in the MPRDA, and Shabangu would make a final ruling in terms of the MPDRA’s relevant statutory provisions.

The DMR noted that, during 2005, SIOC applied for conversion of its 78,6% undivided share of the Sishen mine, which it received on May 12, 2008.

It also confirmed that AMSA failed to convert the 21,4% undivided share – an omission which led to a reversion to State custodianship and then the granting of prospecting rights to Imperial Crown Trading 289.

To watch a video in which Mineral Resources Minister Susan Shabangu tells Mining Weekly Online's Martin Creamer that the Council for Geoscience is about to become the first port of call for mineral rights, click here.

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