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De Beers Consolidated Mines (Pty) Ltd v Regional Manager, Limpopo: The Department of Mineral Resources & Energy and Others

4 September 2023

  • The judgment of the High Court, Gauteng Division, Pretoria, can be found here.
  • Neutral citation: De Beers Consolidated Mines (Pty) Ltd v Regional Manager, Limpopo: The Department of Mineral Resources & Energy and Others (66559/2020) [2023] ZAGPPHC 1111
  • Case number: 66559/2020
  • Coram: Khumalo NV J
  • Date delivered: 4 September 2023
  • Outcome: The DMRE is ordered to decide an internal appeal regarding an application for a closure certificate for a diamond mine previously operated by De Beers. The decision must apply and take into account the requirements of section 43 of the MPRDA, as amended.

Summary

De Beers operated a diamond mine called Oaks Mine in the Musina region of Limpopo province. It was awarded a mining licence under the Minerals Act in 1998, and an Environmental Management Programme (EMP) was approved by the Department of Mineral Resources and Energy (DMRE) in 1998. The EMP expressly indicated that the 8 hectare large mine pit would be rehabilitated by the placement of certain safety measures, but would in its end state remain open (i.e the pit would not be filled in).

In 2003, De Beers applied to amend its EMP. The Amended EMP still contained closure steps and rehabilitation measures but stipulated that the mine pit was to remain open. The amended EMP was approved by DMRE in terms of the Minerals Act. This was just prior to the commencement of the MPRDA on 1 May 2004.

De Beers operated the mine for 10 years until 2008 when operations stopped. The mining license lapsed as it was not converted to the new order right. De Beers submitted that the amended EMP remained valid and enforceable in accordance with item 10 of the transitional arrangements in schedule II of the MPRDA.

In 2009, De Beers applied to the DMRE for a closure certificate for the Oaks mine and attached a closure plan which provided for safety, stability and sustainable land and vegetation as well as waste management measures with regard to the open pit mine. The closure plan provided for post closure maintenance and control of the open pit, but stated that upon closure of the mine, the pit was to remain open. De Beers argued that its EMP was approved unconditionally, as a result it had designed its mining activities and planned its operations on the basis that the pit would remain open.

In 2011, the DMRE conducted a site inspection and assessed the closure plan. It reported that De Beers needed to address environmental flaws before a closure certificate can be issued because:

  • The open pit will pose a high risk to scavengers and illegal mining;
  • The Department would like to see a practical plan for future land uses that would not encourage illegal mining and scavenger;
  • All relevant stakeholders must have been consulted for future land use including the principal inspector of mines;
  • The Department will not issue any Closure Certificate until all the requirements of relevant legislation had been satisfied.

In 2012, the DMRE decided not to process the application for the closure certificate unless De Beers complied with these conditions.

In 2014, NEMA was amended and a new provision was introduced which holds the holder of an old order mining right and owner of works responsible for any environmental liability, pollution or ecological degradation, the pumping and treatment of extraneous water, the management and sustainable closure notwithstanding the issuing of a closure certificate by the DMRE.

In 2016, the DMRE wrote to De Beers reminding it of its conditions and notifying the mine that its mine closure application would only be processed once they had been addressed.

De Beers responded in 2017, requesting the DMRE to agree to an amendment of its 2003 approved EMP, and to providing it with the Closure Certificate in terms of s 43 of the MPRDA after execution of a new proposal under which the mine would reshape the open pit (but not close it). De Beers informed the DMRE that the mine property had been sold to a game farm and that as part of the decommissioning and closure process that took place in 2009, various consultations took place with the DMRE and other interested and affected parties.

In 2018, the DMRE rejected De Beers’ closure application and closure plan on the basis that it wanted the pit closed and rehabilitated. It called on the mine to submit a new Closure Plan that will indicate how the pit will be rehabilitated and include proof of results of consultations with interested affected parties and the Department, prior to submission of a revised Closure Plan. In 2019, the Regional Manager wrote a Memorandum to the DMRE’s Chief Director: Legal Service maintaining that the pit at the Oaks Mine must be backfilled on the basis of health and safety reasons.

In 2019, De Beers again submitted a closure application and alleged that the Oaks mine had been successfully rehabilitated in accordance with its authorisation. De Beers argued that the DMRE had unlawfully delayed in issuing it with the closure certificate for over a decade and stated that the DMRE’s condition to backfill the pit was procedurally unfair and irrational. Various reasons were provided for why filling the pit would not be efficient, cost effective and financially feasible. De Beers also argued that filling the pit would be impractical and irrational from an environmental, practical, technical and financial perspective.

The mine followed up in 2020 asking for the outcome of its closure certificate application. It provided evidence that its rehabilitation efforts over the last decade had been successful mentioning that no wall failures were recorded, no illegal mining has taken place due to the remote location, a blasting over of the remaining kimberlite took place, strict access control measures had been put in place, a 2.4 cm fence and a 700mm safety berm that demarcates the pit area continued to restrict access to the pit. De Beers reiterated that any demand by DMRE to backfill the open pit was unreasonable and irrational.

De Beers argued that the DMRE had failed to make a decision on its application for closure and that this application should be decided in terms of section 43 of the MPRDA and its Regulations as they stood when the the EMP was approved in 2004. The mine argued that the amendments to section 43 as well as to NEMA and its regulations which were effective post the date of its closure application were not applicable.

The DMRE informed De Beers that its closure application would remain pending until a revised closure plan has been submitted, which must include an explanation of how the open pit would be backfilled.

Consequently, the mine lodged an internal appeal in July 2020 against the DMRE’s refusal to process the closure certificate and its failure to take a decision on the closure application. The DMRE is yet to make a decision, and the appeal remains open.

De Beers applied to court to for an order reviewing and setting aside the DMRE’s refusal to grant it a closure certificate, alternatively the DMRE’s failure to take a decision on its application. De Beers advanced a number of grounds including those relating to its position that the application should be decided under the law that applied in 2004 when its EMP had been approved. Its also argued that the DMRE had acted under a mistake of law and took irrelevant considerations into account and that the DMRE’s decision was irrational, arbitrary and capricious.

The court examined the legislative regime pertaining to EMPs and the transitional arrangements brought about by the commencement of the MPRDA (which repealed most of the Minerals Act). In particular, item 10 of the transitional arrangement contained in Schedule 11 to the MPRDA provides:

Continuation of approved environmental management programme

  1. Any environmental management programme approved in terms of s 39 (1) of the Minerals Act and in force immediately before this Act took effect, and any steps taken in respect of the performance assessment and duty to monitor connected with that environmental management programme continues to remain in force when this Act comes into effect.
  2. Sub item 1 does not prevent the Minister from directing the amendment of the environmental management programme in order to bring it into line with the requirements of this Act.
  3. Any person exempted in terms of s 39 (2) (a) of the Minerals Act before this Act took effect and whose exemption does not otherwise remain in force in terms of this Act, must apply for an exemption in terms of this Act within 1 year from the date on which this Act took effect, otherwise the exemption lapses.
  4. if the holder of an old prospecting right or old order mining right ceases the relevant prospecting or mining operation, the holder must apply for a closure certificate in terms of s 43.
  5. s 38 applies to a holder of an old prospecting right or old order mining right.”

De Beers argued that the initial EMP and the amended EMP continued to apply when the MPRDA took effect on 1 May 2004. At the time the mine lodged its closure application in 2009, section 43 provided that upon grant of a closure certificate all obligations of a mining right holder would cease.

The DMRE argued that that De Beers’ amended EMP of 2003 was approved on condition that certain pubic participation processes were conducted. Proof of such consultation was not submitted to the DMRE and therefore the mine’s review should be dismissed. It also argued that certain guidelines related to financial provisioning were published in 2005 introducing guidance to holders of old order mining rights on how to comply with the stringent requirements of the new mining legislation. These guidelines contained directions relating to the infilling of pits. The DMRE argued that the mine’s reliance on the old 2003 EMP, issued under the repealed Mineral Act, fell short of the requirements of the Constitution, NEMA, the MPRDA and 2005 guidelines and that this was fatal to the review application which should then be dismissed. The DMRE also argued that De Beers failed to provide mandatory information to the Regional Manager before the sale of the property to a game farmer (for example an application for transfer of environmental liabilities filed in terms of s 43 (3) from De Beers to the game farmer and the mine’s Health and Safety Plan or risk assessment studies approved by the Chief Inspector).

The DMRE urged the court to refuse the mine’s request for a declaratory order declaring that it was not under an obligation to fill the pit based on the polluter pays principle contained in section 2 of NEMA, and the duty of environmental care contained in section 28 of NEMA. The latter specifically applies retrospectively to environmental harm done in the past. De Beers argued that the NEMA principles do not  impose any obligations to the holders of mining rights but set out principles and factors which guide organs of state in decision making.

A central question in this matter was the application of section 43 of the MPRDA and whether it should be applied prospectively (as argued by De Beers) or retrospectively (as argued by the DMRE)  to the facts in this matter.  The court found that because De Beers had submitted its closure plan to the DMRE in 2009, after the MPRDA came into effect on 1 May 2004, this meant that section 43 of the MPRDA (which imposes an obligation on a mining right holder to rectify any adverse impact on the environment as a result of the mining operations until a closure certificate is issued) applied. The court analysed the purpose of section 43 of the MPRDA in the context of the NEMA principles and duty of care and reasoned that “If section 43 is only applied prospectively, it would not be in sync with NEMA provisions that apply retrospectively.”

The court ordered the DMRE to decide the internal appeal lodged by De Beers. Judge Khumalo held in para 151:

In relation to the application of MPRDA’s section 43, it is instructive that even if this provision has been applied prospectively, NEMA continues to apply retrospectively. This implies that the principles of duty of care and polluter pays still applies to [De Beers Consolidated Mines]. It therefore would be realisable by the Application of s 43 as amended. There should therefore be compliance in terms of the new s 43 (3) and 15.

The final court order read as follows:

  1. The Applicant is ordered to exhaust the internal remedies, and the matter is sent back to the 3rd Respondent who is directed to consider and decide Applicant’s internal appeal within 30 days of the grant of this order, having regard to this Court’s judgement and to communicate his decision to DBCM within 10 days of it being taken;
  2. The decision on the Appeal is to be taken in line with the legislative framework applicable in respect of the Closure Applications as it presently exists (that is per s 43 of the amended MPRDA).
  3. The Applicant to pay the costs of the Application including the costs of two Counsel.