Klass Looch Associates

Employer OHS Champion since 1986 

Terra Bricks and another v Regional Manager, Limpopo Region Department of Minerals and Energy and others [2013] (GNP)

Key Words

Mining – Mine – Definition

Mini Summary

The first applicant began mining brick-making clay on a farm. It manufactured bricks from the clay on a separate part of the same farm. In applying for mining authorisation, the applicants followed advice received, to apply for authorisation covering the whole property even though it intended mining on only part of the property. After 2002, the applicants’ operation was restructured and the first applicant would focus on the mining operation and the second respondent on the brick-making. The parties resolved to abandon that part of the property not used for mining, and which was used for non-mining activities such as brick-making. The first applicant notified the first respondent of the relevant portion of the property. It then received a notice in terms of section 93(1)(b)(ii) of the Mineral and Petroleum Resources Development Act 28 of 2000, calling for the stopping of all activity (including brick-making) on the abandoned property. The applicants sought the review of the respondents’ decision.

Held that the central issue was whether the brick-making operation fell within the definition of a “mine” as defined in the Minerals Act 50 of 1991, the Mine Health and Safety Act 29 of 1996 and the Mineral and Petroleum Resources Act. The respondents argued that the brick-making factory constituted a “mine”.

In its analysis of what constitutes a mine, the Court found that it does not necessarily comprise the whole “mining area” as defined in the Mineral and Petroleum Resources Development Act. The Court also found that a production facility such as a brick manufacturing operation is not connected to the processing of a mineral.

The application for review was granted.

FOURIE AJ:  This is an application for judicial review under the Promotion of Administrative Justice Act 3 of 2000 ("PAJA").

The primary subject-matter of the review is an order by the first

and second respondents that the applicants immediately stop manufacturing bricks at second respondent's factory near Polokwane.

The applicants claim the setting aside of this order and certain ancillary relief. The first and second respondents are officials in the Department of Minerals and Energy who are charged with the administration of the Mineral and Petroleum Resources Development Act 28 of 2000 ("the MPRDA") and the Minerals Act 50 of 1991 ("the MA") as well as the Mine Health and Safety Act 29 of 1996 ("the MHSA").

It was in limine contended on behalf of the respondents that the applicants' failure to follow the procedure laid down in rule 53 of the Uniform Rules of Court, is fatal and therefore certain relief cannot be granted.

As far as the merits are concerned, it was argued on behalf of the first and second respondents that the brick factory constitutes a "mine" in terms of the aforesaid legislation. Because the applicants have not complied with the applicable legislation the applicants have been ordered to close down the brick factory.

The applicants contest this view. They maintain the brick factory is not a mine or a part of a mine, is not governed by the said legislation and falls outside the jurisdiction of the first and second respondents. I shall first deal with the point in limine.

It is common cause that the applicants have not followed the procedure prescribed by rule 53. However, the primary purpose of the rule is to facilitate and regulate applications for review (Jockey Club of South Africa v Forbes 1993 (1) SA 649 (SCA) at 661).

The rule exists primarily in the interests of an applicant, who could waive the procedural right, as long as the election to disregard the provisions of the rule does not impinge upon the procedural rights of a respondent. Therefore, the remaining provisions of this rule are not peremptory (Jockey Club of South Africa v Forbes, supra, at 661 and 663).

The complaint that no official record of the proceedings was made available, is in this particular instance not prejudicial to the case of the respondents. They are supposed to be in possession of such record and they could have made use thereof in these proceedings, whenever it was necessary. For these reasons I am of the view that the point in limine is without any substance.

As far as the merits are concerned, it was argued on behalf of the respondents that the mining authorisation was granted to a company known as Terra Bricks (Pty) Limited and not to the first applicant which is Terra Bricks CC, a close corporation.

The implication of this argument is that any activity conducted by the first applicant (as a close corporation) on the property which requires authorisation, is on this account alone illegal. The background to this contention is that the first applicant was converted from a company to a close corporation in terms of section 27 of the Close Corporations Act 69 of 1984 on 28 May 1996.

According to the respondents this conversion implies a change of one entity into another. I do not agree with this submission. Section 27(5)(a)(b) and (d) of the said Act regulates the legal consequences of a conversion from a company to a close corporation.

It is expressly provided that:

"(t)he juristic person which prior to the conversion of a company into a corporation existed as a company, shall notwithstanding the conversion continue to exist as a juristic person, but in the form of a corporation."

In my view, this implies a change in form and not in substance.

It has been pointed out and explained in the founding affidavit that the applicants did not comply with the provisions of section 7(2)(a) of PAJA. There is also a prayer for condonation in this regard.

PAJA appears to place an onus on the person challenging the validity of an administrative action to show that all internal remedies have been exhausted and in the event that they have not been, to show that exceptional circumstances are present, justifying the review.

If exceptional circumstances are present, a court may exempt such person from the obligation to exhaust any internal remedy, if the Court deems it in the interests of justice. It has been pointed out by the applicants that certain departmental appeals have been noted by the applicants against the various steps taken already against them by the department.

Apparently one has been already decided against the applicants by the fourth respondent but the others have not been decided as yet. The applicant's case in this regard is that it is necessary and in the interests of justice and the public interest that a court should pronounce on the main dispute which is in essence a legal dispute regarding the correct interpretation of certain relevant national statutes.

It has also been pointed out in the founding affidavit, with regard to a letter of the department dated 27 January 2004, that the Director-General is perhaps also of the view that this Court should decide the issue without proceeding within the other internal appeals.

In this particular letter, the Director-General has given the following undertaking:

"The department is . . . prepared to suspend the instructions as aforesaid, until the High Court application has been finally adjudicated, thus the urgent application should fall away. We therefore suggest that you issue a notice of motion in the normal course of business and must be served on us . . . before the end of business."

Without deciding that the Director-General specifically applied his or her mind to the provisions of section 7(2)(a) of PAJA, it seems to me that these circumstances can be regarded as "exceptional circumstances" and therefore I should exercise my discretion in favour of granting the applicants the exemption referred to in subsection (c).

I now intend to deal with the main issue between the parties. The essential facts can be summarised as follows: The first applicant commenced mining brick-making clay and manufacturing bricks during May 1996 on the farm Roodepoort in the district of Polokwane. According to the applicants the brick making takes place on a distinct and separate part of the property. It is at least 500 metres from the clay quarry where the clay mining activities take place. Because the first applicant was initially unsure of exactly where the clay deposits were located, it discussed its application for a mining authorisation with a former director, mining development who advised the first applicant to apply for authorisation covering the whole property, although it was intended to conduct mining on a limited portion of the property only.

According to this advice, once the location of the clay deposits had been determined with certainty, the superfluous areas could easily be abandoned if no mining had been done in the area concerned.

The mining authorisation was issued on 28 May 1996. According to the applicants, the mining of clay and the manufacturing of bricks are two separate and distinct operations. The various procedures to manufacture bricks are described in detail in the founding affidavit. The first applicant performed both the mining and brick making operations until 2002.

Thereafter, the operations were restructured. The first applicant would continue the mining operation whereas the second applicant would own and operate the brick factory. As part of this restructuring the applicants resolved to abandon that portion of the property which was not required for the mining of clay and which was used for non- mining activities, such as brick making.

On 25 April 2002, the first applicant notified the first respondent that it had abandoned that portion of the first applicant's mining area indicated on a sketch plan. On 13 January 2005, the first applicant received a notice in terms of section 93(1)(b)(ii) of the MPRD (Act 28 of 2002) in which it was ordered as follows:

"To stop and terminate with immediately (sic) effect all activities, prospecting, exploration, mining, production or processing operations, including all activities of Polokwane Bricks (Pty) Limited, on mining area abandoned by Terra Bricks CC (formally Terra Bricks (Pty) Limited) on the remaining extent of portion 1 of the farm Roodepoort 744 LS, district of Pietersburg. Any activity on the abandoned area over which no closure certificate has been issued, is illegal."

This order which was signed by both the first and second respondents is dated 5 January 2005 and a copy thereof is annexed to the founding affidavit as Annexure GR5.

It seems to me that the central issue in this matter is what the word "mine" means in the MA, the MHSA and the MPRDA and whether the second applicant's brick making activities in fact constitute "a mine" or "mining".

The first and second respondents in essence contend that the brick factory is a mine or part of the first applicant's clay mine. It is the applicants' case in essence that the second applicant's brick making activities on the property do not constitute a "mine", or form part of the first applicant's mining activities and that, as a consequence, the first applicant is not liable to comply with the provisions of the MHSA read with section 12(2) of the MA, in respect of its brick making activities on the abandoned portion of the mine area, during the period 1996 to 2002 or in any other period.

Prior to the commencement of the MPRDA, which repealed the MA and amended the definition of "mining area", in section 102 of the MHSA, with effect from 1 May 2004 the words "mine" and "mining area" were defined almost identically in section 1 of MA and section 102 of the MHSA.

In the Minerals Act "mine" and "mining area" were defined as follows:

"'Mine' means when

(a) used as a noun

(i) any excavation in the earth including the portion under the sea or under other water or in any tailings as well as any borehole, whether being worked or not, made for the purpose of searching or for winning a mineral; or

(ii) any other place where a mineral deposit is being exploited, including the mining area and all buildings, structures, machinery, mine dumps, access roads or objects situated on such area and which are used or intended to be used in connection with such searching, winning or exploitation or for the processing of such mineral: provided that if two or more such excavations, boreholes or places or excavations, boreholes and places are being worked in conjunction with one another they shall be deemed to comprise one mine unless the Director: Mineral Development notifies the owner thereof in writing that such excavations, boreholes or places or excavations, boreholes and places compromise two or more mines; and

(b) used as a verb the making of any excavation or borehole referred to in paragraph (a)(i) or the exploitation of any mineral deposit in any other manner for the purpose of winning a mineral, including any prospecting in connection with the winning of such mineral."

"'Mining area' means the area comprising the subject of any prospecting permit or mining authorisation including–

(a) any adjacent surface of land;

(b) any non-adjacent surface of land if it is connected to such area by means of any road, railway line, power line, pipeline, cableway or conveyer belt; and

(c) any surface of land on which such road, railway line, power line, pipeline, cableway or conveyer belt is located under the control of the holder of such permit or authorisation and which he is entitled to use in connection with the operations performed or to be performed under such permit or authorisation."

The words "mine" and "mining area" were defined as follows in the MHSA:

"'Mine' means when:

 (a) used as a noun

(i) any borehole or excavation in any tailings or in the earth including the portion of the earth that is under the sea or other water, made for the purpose of searching or for winning a mineral whether it is being worked or not; or

(ii) any other place where a mineral deposit is being exploited, including the mining area and all buildings, structures, machinery, mine dumps, access roads or objects situated on or in the area that are used or intended to be used in connection with searching, winning, exploitation or processing of a mineral or for health and safety purposes, but if two or more excavations, boreholes or places are being worked in conjunction with one another they are deemed to comprise one mine, unless the Chief Inspector of Mines notifies their employer in writing that those excavations, boreholes or places comprise two or more mines; or

(iii) a works; and

(b) used as a verb, the making of any excavation or borehole referred to in paragraph (a)(i), or the exploitation of any mineral deposit in any other manner for the purpose of winning a mineral including prospecting in connection with the winning of a mineral."

Prior to the repeal of the definition of "mining area", by the MPRDA on 1 May 2004, the definition of "mining area" in the MHSA was "the mining

area as defined in section one of the Minerals Act".

Since the coming into operation of the MPRDA on 1 May 2004, "mining area" is now defined in the MHSA to mean:

"A prospecting area, mining area, retention area, exploration area and production area as defined in section one read with section 65(2)(b) of the Petroleum and Mineral Resources Development Act 2002 (Act 28/2002)."

The abovementioned definitions in the MA and the MHSA (prior to 1 May 2004) referred to three areas. Firstly, there is an area which constitutes the "mine" where mining operations are being conducted. Secondly, there is the area which comprises the subject of any mining authorisation, ie the area where mining operations may be conducted (section 5(2) of the MA). Thirdly, there is the "mining area". This comprises the area referred to in the previous sentence, but possibly also other areas where mining operations are not allowed (because the area does not comprise the subject of the authorisation).

On a proper interpretation of the definition of "mine", as a noun in the MA, I am of the view that it comprises the following: In the first instance, any excavation in the earth and any borehole made for the purpose of searching for or winning a mineral constitute a mine. To search is to "look through or go over thoroughly to find something" (Oxford Encyclopaedic English Dictionary (2 ed) 1995).

To win in this context, is to "obtain (ore) from a mine" (Oxford Encyclopaedic English Dictionary (2 ed) 1995). The definition requires searching for or winning a mineral. "Mineral" is defined in the MA, to include clay (but not bricks), as follows:

"Mineral means any substance whether in solid, liquid or gaseous form, occurring naturally in or on the earth, in or under water or in tailing and having been formed by or subjected to a geological process, excluding water but including sand, stone, rock, gravel and clay as well as soil other than top soil."

Secondly, a mine is also any other place where a mineral deposit is being exploited. Exploit is here used in the sense of "ontgin" as used in the Afrikaans version of the Act. Also important is the reference to exploitation of a "mineral deposit". This qualification of the word "mineral" indicates that the exploitation or "ontginning" of minerals in situ, ie where they occur naturally, was intended. Significantly the reference to exploitation of a mineral deposit is repeated in the definition of a mine as a verb.

Thirdly, the concept of "any other place where a mineral deposit is being exploited" is stated to include the mining area and/or buildings, structures, machinery, mine dumps, access roads or objects situated on such area and which are used or intended to be used in connection with such searching, winning or exploiting or for the processing of such mineral.

The meaning of the definition is clearly not the whole of the mining area. Only if a part of the mining area or buildings etcetera are used or intended to be used in connection with such searching, winning, exploiting or processing of a mineral, do they form part of the mine. I am of the view that this phrase qualifies both mining area and the buildings situated in or on the mining area.

On the basis set out above I am of the view that brick making activities are not activities aimed at searching or winning a mineral or exploiting a mineral deposit. The clay is searched for, won and exploited ("ontgin") at the clay quarry. In this regard it was explained (paragraph 5.2 of the founding affidavit) on behalf of the applicants that:

"Mining is done by means of an excavator, bulldozer and front end-dump-trucks. After a layer of top soil with a thickness of approximately 300 to 500mm has been removed to expose the clay, mining is done in 'strips' to a depth of approximately 5 meter (sic) down to sandstone level . . . The clay mined on the property is then stock piled at the factory together with other materials, such as clay from other regions and pulverised fine charcoal used in the brick making process by mixing it according to certain formulas."

The next question is whether the activities at the brick factory are not possibly connected with "processing" of a mineral. The word "process" is defined in the Minerals Act to mean:

"In relation to any mineral the recovering, extracting, concentrating, refining, calcining, classifying, crushing, screening, washing, reduction, smelting or gasification thereof."

As already pointed out above, "mineral" is defined in the Act to include clay but not bricks. The brick making process is described in the founding affidavit (paragraph 5.6) as comprising the following basic steps:

"5.6.1 The clay is firstly mixed with other clay, coal or other materials, depending on the requirement of the particular product concerned.

5.6.2 This mixture is then crushed by means of a hammer mill, screened and transported to the brick making machine, by means of conveyer belts.

5.6.3 The brick making machine water is added to the mixture and air is extracted.

5.6.4 After proper mixing in this machine it is extruded through a mould into a column which is cut into the required sizes and shapes for the bricks.

5.6.5 The bricks are at this state (sic) known as wet green and are then removed and stacked to be dried before they are fired (baked) in the tunnel kiln or traditional open air clamp kiln respectively.

5.6.6 After they have cooled down, the bricks are sorted for quality by hand, stored and then loaded and delivered to customer."

Although "crushing" is included in the definition of "process", in casu it is a mixture of clay, mined on the property, clay from other sources and other material such as pulverised fine charcoal which are being crushed and not the mineral itself, ie the clay concerned.

I am of the view that upon a proper interpretation of the definition of "processing", it includes only processes which are aimed at winning a mineral in its pure form and that a distinct process which is aimed at the manufacturing of a new product such as bricks, no longer constitutes processing of a mineral as contemplated in the definition. Put differently, bricks in its final form are not mined, they are manufactured (cf Albertonse Stadsraad v Briti BK 2003 (5) SA 157 (SCA)).

The definition of "mine" in section 102 of the MHSA is almost identical to the definition of "mine" in the MA. The slight differences in word order and absence of certain words in the MHSA definition do not impact meaningfully on the meaning of "mine" in the MA. Therefore I am of the view that the interpretation of the MHSA definition is for all practical purposes the same as the interpretation of the MA definition.

Also the meaning of "mine" as verb has remained essentially the same under the MPRDA. "Mine" is no longer defined as a noun therein, but as a verb. It is defined in section 1 to mean:

"Any operation of activity for the purposes of winning any mineral on, in or under the earth, water or any residue deposit whether by underground or open working or otherwise and includes any operation or activity incidental thereto."

Mineral is again defined to include clay, but not bricks in a final form.

On 25 April 2002 the first applicant notified the first respondent in writing, in terms of section 11(2) of the MA, that it had abandoned that portion of the first applicant's mining area as indicated on the plan. It was argued on behalf of the respondents that in terms of section 11(3) the regional director has a discretion to accept or not to accept the abandonment.

According to the respondents, the regional director has not yet issued a certificate to certify that such abandonment was accepted. I do not think there is any force in this argument. As the brick factory is not used in connection with searching, winning, exploiting or processing of a mineral or for health and safety purposes, it is not a mine and it does not form part of the clay mine. This is so, whether the respondents have accepted the abandonment of that part of the remaining area on which the factory is situated, or not.

It was also argued on behalf of the respondents that the environmental management programme ("the EMP") and addenda thereto show that the first applicant regarded the brick factory as part of the mining activity. In paragraph 17 of the answering affidavit it is stated as follows:

"It will be seen from the 1996 EMP and 2001 addendum that the process of mined clay and brick making was regarded as mining for the purposes of the Act."

It was pointed out on behalf of the applicants that the author of the EMP appears to have been confused as to whether the brick factory is part of the clay mine or not, which confusion seems to have risen as a result of the fact that the brick factory was situated on the mining area.

This, in my view, seems to be a reasonable possibility. Notwithstanding this, it is important to point out that the subjective view of one of the parties should not and cannot have any effect on the question of whether the brick factory is in fact a mine or not. This is a question for a decision by this Court based on objective facts and the wording of the relevant statutes. The subjective view of one of the parties can only be regarded as a personal opinion (not that of an expert) and I am not bound by that.

I should also mention that as far as the grounds of review are concerned, it was argued on behalf of the respondents that the applicants have failed to identify the relevant provisions of PAJA, upon which they base their cause of action. Therefore, so it was argued, the applicants have failed to prove the alleged grounds of review. I do not agree with this submission. In paragraph 4.3 of the founding affidavit the following is stated in this regard:

"The grounds for the review are that the decision of the first and second respondents is unlawful and unreasonable, more particularly in that it:

4.3.1 Is materially influenced by several errors of fact and law and

4.3.2 Is not authorised by the empowering legislation on which it purports to be based."

Section 6 of PAJA deals with judicial review and administrative action. Subsection (2) provides that a court has the power to judicially review an administrative action if the action was materially influenced by an error of law (subsection (d)) or if the action itself is not authorised by the empowering provision (subsection (f)).

It is obvious that the grounds of review referred to in paragraphs 4.3.1 and 4.3.2 of the founding affidavit, refer to these subsections of section 6 of PAJA.

For these reasons I am of the view that the application should be granted. However, as far as costs are concerned it was argued on behalf of the applicants that the order to close down the brick factory issued by the first and second respondents was not only issued in breach of all principles of natural justice, but it was also the culmination of a process of persecution. Therefore, so it was argued, I should grant the application with costs on the attorney and client scale. I do not agree. This is not a simple matter. I accept that the officials of the department acted bona fide in an attempt to comply with the provisions of the various legislation as they interpreted it. Therefore I shall not exercise my discretion to make such a punitive costs order.

Under the circumstances I make the following order:

Order

1. The first and second applicants are exempted in terms of section 7(2)(c) of the Promotion of Administrative Justice Act 3 of 2000 from the requirements of section 7(2)(a)(b) of the Act to first exhaust their internal remedies before the decision referred to in 2 below, can be reviewed.

2. The decision of the first and second respondents, Regional Manger, Limpopo region and/or the Principal Inspector, Limpopo region of the Department of Minerals and Energy of the RSA, purportedly taken in terms of section 93(1)(b)(ii) of the Mineral and Petroleum Resources Development Act 28 of 2002 read with the Minerals Act 50 of 1991 and the Mine Health and Safety Act 29 of 1996, which decision is embodied in their letter dated 5 January 2005 (received by the applicants on 13 January 2005) to instruct the first applicant to stop and terminate with immediate effect all activities including all activities of the second applicant on the portion of the mining area abandoned by the first applicant on the remaining extent of portion 1 of the farm Roodepoort 744 LS district of Pietersburg, is hereby set aside.

3. It is declared that the brick making activities conducted on the aforesaid abandoned area do not constitute a "mine" or "mining" in terms of the statutes aforementioned.

4. It is declared that:

4.1 The first applicant is not liable to comply with the provisions of the Minerals Act 50 of 1991 and the Mine Health and Safety Act 29 of 1996 in respect of its past brick making activities on the aforesaid abandoned area, as contemplated in section 12(1) and 12(2) of the Minerals Act 50 of 1991;

4.2 The first applicant and second applicant are not liable to comply with the provisions of the Minerals Act 50 of 1991 and the Mine Health and Safety Act 29 of 1996 in respect of the brick making activities on the aforesaid abandoned area;

4.3 The second applicant is not liable to comply with the provisions of the Mine Health and Safety Act 29 of 1996 and the Mineral and Petroleum Resources Development Act 28 of 2002 in respect of its activities at the brick making factory situated on the aforesaid abandoned area.

5 The first, second and fourth respondents, in their official capacity, are ordered to pay the applicants' costs jointly and severally.