by Nov 3, 2023Mining

“I have received a grant letter for my mining right, now why can’t I mine?”

This is a query that we often receive in practice.

After applying for a mining right and undertaking a very detailed and extensive public participation process, the Department of Mineral Resources and Energy (“DMRE”), after months, issues a grant letter confirming that the right which was applied for has been granted. This is a significant moment as it seems to establish the existence of a right in law at that point in time (according to the Mawetse judgment). However, having secured the letter of grant does not, in our view, mean that the holder of the right may immediately commence mining activities.

Section 23(5) of the Mineral and Petroleum Resources Development Act, 2002 (“MPRDA”) specifically states that:

“A mining right granted in terms of subsection (1) comes into effect on the effective date.”

The effective date is defined as being “the date on which the relevant permit is issued or the relevant right is executed”.

In addition, the MPRDA imposes a number of obligations on to the holder, which are triggered by the effective date, such as the obligation to commence with mining operations within one year from the date on which the mining right becomes effective. The inclusion of section 23(5) in the MPRDA clearly indicates that the relevant right only takes effect on the date that it is executed, and that the holder may accordingly only exercise the right from that date, provided the other requirements in the MPRDA have been complied with.

Conclusively, the receipt of a grant letter for a mining right marks a crucial milestone in the complex journey of securing a mining right. However, it is important to recognise that this document, while signifying the existence of a legal right, does not grant immediate permission to commence mining activities.  In essence, it is the execution of the mining right that truly empowers the holder to exercise their rights, provided that all the prerequisites outlined in the MPRDA have been met. This distinction between the grant letter and the effective date is a critical aspect of the mining industry, where careful adherence to the legal framework is paramount. Navigating the intricacies of mining rights requires not only securing the grant letter but also understanding the legal landscape that governs when and how these rights come into effect. Only then can miners move forward with confidence, ensuring compliance with the law and the responsible mining of our mineral resources.

If you have any further questions or require guidance on this matter, please do not hesitate to reach out at chantal@bv-inc.co.za