Lapsed Prospecting Rights : ‘The Custodian Giveth and the Custodian Taketh Away’? Palala Resources (Pty) Ltd v Minister of Mineral Resources and Energy

The vesting and re-vesting of rights to minerals in terms of the MPRDA in the State can be explained by private law analysis. It was decided in the Palala Resources decision that upon the deregistration of a company holding a prospecting right in terms of the MPRDA, such prospecting right lapsed and was re-vested in the state as custodian. Vesting in the state as the holder of rights ought to have been recognised. Such a principle about the re-vesting of a right upon termination of a prospecting right by the MPRDA is also supported by the approach of Moseneke DCJ in the Sishen decision of the Constitutional Court and private-law theory. The Palala Resources decision illustrates the continued need and importance of private-law analysis. This may even more true in future attempts to increase the fiscus for redistribution. Re-vesting of a right or ‘something' by the MPRDA in the state implies that the right or ‘something' must have been vested in the state in the first place. It will become more difficult in the future for the courts, in cases dealing with the termination of statutory rights, not to acknowledge that vesting in the state, as custodian or otherwise, did not take place at the outset. It was further decided in Palala Resources that, upon restoration of the registration of a company, s 73(6A) of the Companies Act retrospectively restores the rights and assets to the company that still have legal existence, but it does not restore rights that have lapsed by operation of s 56(c) of the MPRDA. These principles can also be applied to other instances of lapsed prospecting or mining rights due to the loss or restrictions of legal personality by s 56(1) of the MPRDA