DE BEERS CONSOLIDATED MINES LTD v ATAQUA MINING (PTY) LTD & OTHERS1
(Case No. 3215/06, Orange Free State Provincial Division, 13 December 2007)
Importance
Parties
Facts
1
This is a key judgment pertaining to mine waste. The court held
that tailings dumps are movables and as such ownership vests in
the person who removed the minerals as they had occurred
naturally in or on the earth. It held further that the Mineral and
Petroleum Resources Development Act 28 of 2002 (MPRDA) did
not take away such ownership and did not control tailings
dumps created before the MPRDA commenced. Recent
developments indicate that this judgment is probably wrong.
These include the Constitutional Court’s decision in Agri South
Africa v Minister for Minerals & others (CCT 51/12 [2013] ZACC
9) where it was held that the MPRDA did not expropriate
minerals rights, and proposed amendments to the MPRDA which
indicate that the intention of the government is to include
historic tailings within the MPRDA’s regulatory reach. There is an
important obiter decision on the failure to comply with the
public participation requirements of the MPRDA being sufficient
to set aside the granting of a prospecting or mining right.
Applicant: De Beers Consolidated Mines Ltd
First Respondent: Ataqua Mining (Pty) Ltd
Second Respondent: Regional Manager: Free State Region,
Department of Minerals and Energy
Third Respondent: Deputy Director-General: Department of
Minerals and Energy
Fourth Respondent: Minister of Minerals and Energy
This case was concerned with the ownership of a mine or
“tailings” dump on subdivision 16 of the farm Jagersfontein.
Mining in this area began in 1887 by the New Jagersfontein
Mining and Exploration Company (New Company). By 1932, the
New Company had become part of the De Beers Consolidated
Mines Limited (De Beers) group of companies. From the 1940s to
the early 1970s De Beers exploited the resources of the
Jagersfontein mine through a variety of legal agreements with
the New Company. In 1971, De Beers ceased the mining
operations of the New Company, but it had full knowledge of the
fact that the tailings dumps contained diamondiferous material
that could be the subject of further mining operations when
economic conditions became more favourable. By two notarial
deeds of session in late 1973, the New Company ceded the
rights to all precious stones and all precious metals, base
Authored by Professor Tracy Humby, School of Law, University of the
Witwatersrand. The arguments in this note must be acknowledged as those of the
author.
Relief Sought
Legal Issues and
Judgment
minerals and oils in the farm to De Beers, along with all its
assets, whether movable, immovable, incorporeal or otherwise.
There was a further notarial cession of minerals rights by the
New Company to De Beers in September 1993. De Beers also
held a prospecting permit and mining authorisation to mine the
tailings on the Jagersfontein farm in terms of the Minerals Act 50
of 1991.
When the MPRDA came into effect, the Department of
Minerals and Energy (DME) invited De Beers to apply for the
conversion of the prospecting right it held regarding the dumps
to a new order prospecting right. De Beers declined this
invitation. On 31 December 2006 the DME issued a new order
prospecting right to Ataqua Mining (Pty) Ltd.
De Beers applied for the following orders: (i) that it was the
owner of the tailings dumps on the farm, and that Ataqua
Mining was not entitled to conduct prospecting operations in
respect of these dumps; and (ii) that the decision of the Deputy
Director-General and the Minister to grant Ataqua Mining a new
order prospecting right in respect of the dumps be reviewed and
set aside.
The central question in this case was whether the MPRDA
deprived De Beers of the ownership of the minerals in the
tailings dumps on subdivision 16 of the farm Jagersfontein (para
67). Implicitly, this question would then also be bound up with
the authority on the part of the DME is issue new order
prospecting or mining rights in respect of tailings dumps created
before the MPRDA came into effect. In order to answer these
questions, the following legal issues had to be determined:
Issue 1: Were tailings dumps movables or immovables?
This question was important in deciding in whom the ownership
of tailings vested. If immovable, the owner of the land would be
the owner of the dump. If movable, ownership vested in the
mining company that had lawfully severed the ore and minerals,
unless abandonment of ownership had subsequently taken
place.
Judgment: In order to determine whether tailings had acceded
to the land or not, one had to look at the nature of the dumps,
the manner of their attachment to the land, and the intention of
the owner of the movable property at the time of accession
(para 21). The court noted that despite the size of the dumps,
they were distinguishable from the surface of the farm and could
be removed without injuring the land (para 23). The court
followed the ‘modern approach’ to determining accession,
whereby the subjective intention of the owner of the movable
property is determinant, finding that the nature of the tailings
dumps and the manner in which they had been affixed was
further indicative of such intention. The court accordingly held
that the tailings dumps were to be considered as movables (para
25). When they conducted mining operations neither the New
Company nor De Beers displayed an intention to discard the
tailings and attach them permanently to the land (para 19). As
such, De Beers owned the tailings dumps.
Issue 2: Does the MPRDA apply to tailings dumps created
before it came into effect?
Having determined that the De Beers was the owner of the
tailings dump, the court next had to determine whether the
MPRDA had deprived it of its ownership of the minerals. A
variety of considerations impacted upon the court’s finding in
this regard including: The origin and genesis of the MPRDA, the
approach to interpreting the MPRDA, whether De Beer’s rights
had been expropriated, whether historical tailings dumps can be
regulated by the National Environmental Management Act 107
of 1998 (NEMA), the meaning of “mineral” in the MPRDA, and
the nature of tailings.
Judgment: The court decided that “tailings dumps” are not
subject to control by the MPRDA (para 68). Central to
determining the reach of the MPRDA were the definitions of
“mineral”, “mine”, “residue stockpile” and “residue deposit”.
These definitions read as follows:
A “mineral” is defined as “any substance, whether in solid, liquid
or gaseous form, occurring naturally in or on the earth or in or
under water and which was formed by or subjected to a
geological process, and includes sand, stone, rock, gravel, clay,
soil and any mineral occurring in residue stockpiles or in residue
deposits …”.
“Mine” is defined as “any operation or activity for the purposes
of winning any mineral on, in or under the earth, water or any
residue deposit, whether by underground or open working or
otherwise and includes any operation or activity incidental
thereto”.
“Residue stockpile” is defined as “any debris, discard, tailings,
slimes, screening, slurry, waste rock, foundry sand, beneficiation
plant waste, ash or any other product derived from or incidental
to a mining operation and which is stockpiled, stored or
accumulated for potential re-use, or which is disposed of, by the
holder of a mining right, mining permit or production right”.
“Residue deposit” is defined as “any residue stockpile remaining
at the termination, cancellation or expiry of a prospecting right,
mining right, mining permit, exploration right or production
right.”
The term “tailings” had in turn been defined in the Minerals Act
50 of 1991 as “any waste rock, slimes or residue derived from
any mining operation or processing of any mineral”.
The following factors proved decisive in the court’s reasoning:

Outcome
Obiter
The diamonds in tailings dumps do not occur naturally
“in or on the earth” as indicated by the MPRDA’s
definition of “mineral” (para 68(i) and 68(xi)). Tailings
are man-made structures and as such a unique place in
which minerals can be found after someone has
removed them from the earth and processed them to
some extent. The owner of tailings has made later
extraction by improved means possible. As such, tailings
are not part of the “heritage” to which s 3(1) of the
MPRDA refers (para 68(xii)).
 De Beer’s ownership of the tailings was undisputed and
they had spent money, labour and time on the dumps
(paras 68(iii) and (x)).
 There were multiple indications that the MPRDA did not
intended to regulate tailings dumps: The transitional
provisions in schedule II of the MPRDA did not provide
for authorisations issued in respect of tailings under the
Minerals Act to be continued (para 68(iv)); “mining” of a
tailings dump is in fact “processing” (para 68(iv)); the
Minerals White Paper and the objects of the MPRDA are
silent on tailings (para 68(v)); the purpose of the MPRDA
is not defeated or notably reduced by excluding tailings
dumps (para 68(v)); and no absurdity follows if tailings
are excluded from the ambit of the MPRDA (para
68(viii)).
 A finding that the state is the custodian of the minerals
remaining in tailings dumps would amount to
expropriation. If the legislature had intended to take
away private rights in tailings dumps that had existed for
more than one hundred years, it would have stated so
clearly and unambiguously (para 68(vi)).
 In enacting the MPRDA the legislature must have
contemplated that environmental legislation such as
NEMA would adequately regulate the processing of
minerals from dumps created before 2002. As such, the
processing of tailings dumps is not an unregulated
activity (para 68(ix)).
The court granted the application.
There as a concession that the grant of the prospecting right to
Ataqua Mining should be set aside on the basis of failure to
comply with the publication participation requirements of s
16(4) of the MPRDA and Regulation 3(3) of the MPRDA
regulations (paras 9–14).