Lapsed prospecting rights : "the custodian giveth and the custodian taketh away"? Palala Resources (Pty) Ltd v Minister of Mineral Resources and Energy

The decision in Palala Resources (Pty) Ltd v Minister of Mineral Resources and Energy & others 2014 (6) SA 403 (GP) (‘Palala Resources’) brings clarity about the lapsing of a company’s prospecting right in terms of s 56(c) of the Mineral and Petroleum Resources Development Act 28 of 2002 (‘the MPRDA’) upon deregistration of the company, and highlights some of the features of a statutory prospecting right. Section 56(c) determines that a company’s prospecting right will lapse upon deregistration of the company if no prior application has been made, in terms of s 11(1) of the MPRDA, to the Director-General of the Department of Mineral Resources for consent to alienate or transfer the right (item 1 of the Ministerial delegation of 12 May 2004). The principles underlying the decision could also be applied to mining rights granted in terms of the MPRDA. By way of introduction, these rights are briefly sketched before the decision will be set out and discussed. It will be argued that the case shows that despite the public law nature of the MPRDA, there is the need for a proper private-law analysis of these statutory rights.