Introduction
This article is pursuant to those I have written in the last few weeks. It covers registration of the following mining rights in terms of the Mines and Minerals Act (Chapter 21:05) (“the Act”):
- Transfer of mining locations or rights therein,
- Hypothecations
- Options
- Tribute agreements
These are covered in sections 274 to 280 of the Act.
Registration of transfer of mining locations and duty payable
Section 275 of the Act applies. In terms of section 275(1) when any registered mining location or interest therein is sold or otherwise alienated (transferred) in any manner whatsoever, the seller or the person who so alienates (transfers) shall notify the mining commissioner (now provincial mining director) within 60 days. Information to be disclosed include name of the person to whom such location or interest is sold or otherwise alienated, the amount of the valuable consideration if any and the date of the transaction.
It is a requirement that in such transactions transfer duty be paid within six months. The transfer duty payable shall be calculated on the cash value of the transaction.
In terms of section 275(7) the mining commissioner, if satisfied that provisions of the Act have been complied with, may register the transfer by making necessary entries his or her registers and other records.
Registration of hypothecation of mining location
Section 276 of the Act applies. Simply defined, hypothecation means pledging an asset as security or collateral, usually for a loan, without giving up title, possession or ownership rights. In terms of section 276 any holder of a registered mining location may make application to the mining commissioner for the hypothecation of the whole or any portion of his or her interest in such location. Subject to formalities under this section, the Secretary shall thereupon inscribe upon such deed of hypothecation an official or registered number, and also a certificate of registration of such hypothecation.
Hypothecation in respect of loans granted by State
In terms of section 277(1) the Minister may instruct the Secretary to register, in favour of the State, a hypothecation of all or any of the mining locations registered in the name of such holder, if the holder failed to give suitable and sufficient security for money he or she benefitted from the State for the mining location:
a) As a loan to such holder, or
b) If the State caused work to be done on the mining location, or
c) If the State sold such holder mining machinery for use on such location.
Registration of options on mining locations
In terms of section 278(1) when any holder of a registered mining location(s) has agreed in writing to grant to any other person (option holder) the option of exercising the right to purchase, or in any other manner to deal with such locations at a future date, such option holder may apply to the mining commissioner for the registration of a notarial deed embodying the terms of such contract. The mining commissioner shall keep a register in which full particulars as to such contract shall be described and such particulars shall include:
a) Names of the parties to the contract, and
b) Name and registered number of the mining location(s)
c) The date upon which the right or option conferred by such contract commences or expires.
Registration of tribute agreement
According to section 280(1) of the Act if any holder of a registered mining location has agreed in writing to grant a tribute or any other limited right to work such mining location to any other person, hereinafter called the tributor, such tributor may, after such agreement has been approved in terms of this Act apply to the mining commissioner (provincial mining director) for the registration of a notarial deed embodying the terms of such agreement in the office of such mining commissioner, where a register shall be kept in which particulars as to such agreement shall be entered.
The particulars of the tribute agreement shall include:
(a) The names of the parties to the agreement; and
(b) The name and registered number of the mining location or the registered number of the mining lease to which such agreement relates; and
(c) The date upon which the rights conferred by such agreement commence and expire.
It is emphasized that the tribute agreement has to be in the form of a notarial deed.
In terms of section 280(4) the mining commissioner shall, on receipt of an application and of the requisite documents:
a) Register the agreement,
b) Retain two copies of the deed,
c) Return other copies of the deed to the applicant with an endorsement made thereon by him of the fact of such registration, and
d) Inscribe on the certificate of registration or of special registration or copy of the mining lease, at the case may be, the fact of the agreement having been registered and the date of the registration thereof.
In terms of section 280(6) any agreement registered in terms of this section shall, while it remains in force, be binding upon any person who acquires the ownership of such mining location or any interest therein, and it shall not be lawful for the holder of such mining location to abandon the whole or part of such location during the period that such agreement remains in force.
Disclaimer
This simplified article is for general information purposes only and does not constitute the writer’s professional advice. Due to the numerous laws involved frequent changes are inevitable. To be compliant organisations and individuals are advised to consult adequately.
Godknows Hofisi, LLB(UNISA), B.Acc(UZ), CA(Z), MBA (EBS, UK) is a legal practitioner / conveyancer with a local law firm, chartered accountant, insolvency practitioner, registered tax accountant, consultant in deal structuring, business management and tax and is an experienced director including as chairperson. He writes in his personal capacity. He can be contacted on +263 772 246 900 or gohofisi@gmail.com.
