AgriSA compensation bid turned down by ConCourt

AgriSA's request on Thursday for an appeal was turned down by the Constitutional Court.

In a majority judgment, the court held that while the Mineral and Petroleum Resources Development Act had deprived Sebenza – a company that ceded its mining rights to AgriSA – of its coal rights, this could not be considered expropriation.

The case has a long history. AgriSA brought a successful application in the North Gauteng High Court against the minister for minerals and energy, in which it challenged the Act, which gave the government control of all the country's mineral rights.

AgriSA challenged the state's assumption of coal mining rights to properties in Mpumalanga. The court ruled in favour of the agricultural body and awarded it about R75 0000 in compensation.

The minister then appealed that High Court judgment and took the matter to the Supreme Court of Appeal, which found in favour of government.

Not expropriation
?Aggrieved by the outcome, AgriSA unsuccessfully appealed to the Constitutional Court. AgriSA claims its rights were ceded from the liquidators of Sebenza, which had bought coal rights in 2001.

But the minister of minerals and energy rejected the claim for compensation. In its Constitutional Court application, AgriSA said the Act abolished the concept of privately held mineral rights as they existed before the Act came into effect, giving the state the right to grant similar rights to third parties.

AgriSA says this is expropriation contemplated by section 25(2) of the Constitution, and that it should be awarded R2-million in compensation, which is the market value of the mineral rights at the time of their expropriation.

The minister argued that the Act does not expropriate Sebenza's mineral rights because, among other things, the right to mine had always rested with the state.

In his judgment, the chief justice said in order for AgriSA's claim of expropriation to succeed, Sebenza’s deprived right (in this case the right to mine) would have to have been acquired by the state. The court said the state did not acquire Sebenza's right but was a conduit though which others could apply for the right to prospect or mine.

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