The department of mineral resources has not been biased in its dealings on the Sishen mining rights, director general Sandile Nogxina said on Thursday.
“The department of mineral resources … emphatically rejected allegations of bias in the Sishen mining rights issue,” he said in a statement.
Sishen Iron Ore Company (SIOC) had called unlawful a decision by the department to accept a mining right application from Imperial Crown Trading (ICT).
“As a government department we are not oblivious to the reality that we have a duty to apply the law as it is,” said Nogxina.
He said the department was obliged to apply the law consistently and not discriminate against or act in favour of any applicant, or exercise its discretion arbitrarily, capriciously or in a discriminatory manner.
Nogxina said the department converted an old order mining right into a new order mining right when SIOC lodged a claim in respect of its original 71,8% rights.
“This met all the relevant criteria as contained in the MPRDA [Minerals and Petroleum Resources Development Act], and the department, therefore, was obliged to convert the said old order right into the new order mining right.”
He said the department similarly evaluated the prospecting right application of ICT within the ambit of the MPRDA.
“Having regard to the criteria stipulated in the law, the application was found to be compliant.”
Thus, the department was obliged to grant it a prospecting right.
SIOC had also applied for a new mining right application for Sishen Mine.
The department found this to be defective and, in terms of the law, had to refuse the application.
ICT submitted an application for a mining right to the same property as SIOC, which met the criteria for acceptance and was duly accepted, said Nogxina.
“The department will now process the application in terms of the MPRDA, and will evaluate and make a final determination on the application once this process has been finalised.
“As with the previous three decisions, the department will be guided by the relevant provisions of the law in arriving at the final decision as to whether to grant or refuse the said mining right application by ICT,” he said.
Security of tenure
This illustrated that the department had applied the law consistently.
“In so doing, the security of tenure issue is being guaranteed. We believe that the rule of law is a critical factor in determining whether or not a country can be regarded as a stable investment destination.”
He called on the mining industry, private sector, workers and the media to be careful of their role in creating and influencing perceptions.
“In instances where one or more of the above-mentioned stakeholders fail to operate within the regulatory framework, perceptions and investment decisions will inevitably be negatively affected.”
He said the department welcomed jurisprudence on the MPRDA.
“It is our view that legislation which is being subjected to the scrutiny of the courts will ultimately provide better guidance in future cases when the law is being applied,” he said.
The tussle between SIOC, a subsidiary of Kumba Iron Ore Limited, and ICT over the 21,4% mining right over Sishen Mine arose out of disagreement between Kumba Iron Ore and ArcelorMittal SA.
This dated back to 2001 when, as part of Iscor’s unbundling, it was agreed that a 21,4% take in mineral rights of the Sishen mine would vest in the company that is now ArcelorMittal SA.
At the time it was agreed that Sishen would supply ArcelorMittal SA with iron ore, at up to 6,25-million tonnes a year, at cost plus 3%.
When ArcelorMittal SA failed to renew its 21,4% stake in part of the Sishen mine, Kumba said it would sell its iron ore to the steel giant at market prices.
The 21,4% stake was then granted to ICT.
The matter is before the courts. – Sapa