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Minerals and prospects

10 February 2005

Act No.28 of 2002 and Act No. 24 of 2003
The Mineral and Petroleum Resources Development Act 28 of 2002, ("the MPRD Act") and the Mining Titles Registration Amendment Act 24 of 2003 ("the MTRA Act"), came into operation on 1 May 2004. The above mentioned legislation brought about major changes to the registration procedures relating to mineral and prospecting "rights" in the country.

Amendment of Deeds Registries Act No 47 of 1937
Both section 53 of the MTRA Act and section 110 of the MPRD Act provide for the removal of all the functions and procedures relating to the registration of mineral rights and other rights connected therewith ("mineral rights") from the Deeds Registries Act. The effect of the above-mentioned amendment is that a registrar of deeds is no longer empowered to register any transactions relating to mineral rights, except for the de-registration of mineral rights as provided for in Schedule II to the MPRD Act.

Repeal of Chief Registrar's Circular No. 7 of 2004
Different arguments exist with regard to the interpretation of the MPRD Act, the differences surround whether or not it relates to the registration of mineral rights in a deeds registry. On the one hand it is argued that acts pertaining to the registration of mineral rights may be proceeded with in deeds registries, provided said rights have not been converted or lapsed, as provided for in Schedule II to the MPRD Act. On the other hand, it is argued that registrations pertaining to mineral rights, in terms of the Deeds Registries Act, had to have been discontinued with, upon the coming into operation of the MPRD Act. The latter argument is based on the definition of "holder" in Schedule II of the MPRD Act.

Uncertainty with regard to the correct interpretation of this act resulted in Chief Registrar's Circular No. 7 of 2004 being repealed and replaced with Chief Registrar's Circular No. 11 of 2004.

Chief Registrar's Circular No. 9 of 2004
Schedule I to the MPRD Act, as well as the Schedule to the MTRA Act, provide for the amendment of the Deeds Registries Act as far as it relates to the discontinuing of the registration of mineral rights in deeds registries (see section 110 of the MPRD Act and section 53 of the MTRA Act). The purpose of the amendment to the Deeds Registries Act by the Schedule of the MTRA Act, was to correct the erroneous amendment of the Deeds Registries Act made in Schedule I to the MPRD Act. The legislature never intended this Schedule, as far as it relates to the Deeds Registries Act, to come into operation. The intention, however, has not been given effect to and resulted in the erroneous amendment of the Deeds Registries Act by Schedule I of the MPRD Act.

The Department of Minerals and Energy is engaged with the amendment of Schedule I of the MPRD Act and CRC9/2004, which requests registrars of deeds to regard the amendment of the Deeds Registries Act by the Schedule as pro non scripto. This will be repealed with the promulgation of the amendment referred to above.

Chief Registrar's Circular No. 11 of 2004
CRC7 of 2004 was repealed and replaced by CRC11 of 2004. CRC11/2004 sets out the procedure for de-registration of mineral rights in deeds registries and further provides for the discontinuance, with effect from 16 July 2004, of any further acts of registration relating to mineral rights in deeds registries.

I will now briefly discuss the procedures for de-registration of mineral rights in deeds registries.

Conversion and registration in the Mineral and Petroleum Titles Registration Office
Schedule II to the MPRD Act ("Schedule II") provides for the conversion, by the Minister of Minerals and Energy, of the different rights referred to in item 1 of the Schedule ("rights"). The Schedule further provides for different time frames during which the rights need to be converted. Failure to convert the rights within the prescribed time will have the effect that such rights lapse by law and will automatically be de-registered. Upon conversion of a right by the Minister of Minerals and Energy, the holder of such right must lodge the notice of the conversion of the right, together with the title deed of the converted right, for registration in the Mineral and Petroleum Titles Registration Office.

De-registration in deeds registry

Application and endorsement of title deed
In order to provide for de-registration in a deeds registry of a right to minerals that has been registered in the Mineral and Petroleum Titles Registration Office, the notice of the conversion, together with the title deed of the mineral rights must be lodged in the deeds registry concerned. The above mentioned documentation must be accompanied by an application for the endorsement of the title deed in order to reflect the de-registration of the mineral rights in the deeds registry. Where it is evident from the title deed of the mineral rights that the rights held there under are mortgaged by a mortgage bond, the office copy of such mortgage bond must also be endorsed to reflect the de-registration of the mineral rights in the deeds registry.

Mortgage bond registered over mineral rights
No transactions with regard to a mortgage bond that is registered over mineral rights must be registered in a deeds registry. The reason is the removal from the Deeds Registries Act of all references to mineral rights. Furthermore, a registrar of deeds is not in the position to determine whether a mineral right that has been mortgaged by a mortgage bond, has been converted or whether such right has lapsed. Transactions pertaining to such mortgage bonds must, therefore, be registered in the Mineral and Petroleum Titles Registration Office.

Conditions in title deeds to immovable property
Schedule II provides for different time frames during which rights need to be converted. OP26 mining leases must, for example, be converted within a period of 5 years from the date of the operation of the MPRD Act (that is 1 May 2004). Old order prospecting rights, on the other hand, need to be converted within a period of 2 years from 1 May 2004, and unused old order rights, within 1 year from 1 May 2004. The deeds registration procedure is not familiar with the names allocated to the rights referred to in Schedule II, and a registrar of deeds is therefore not in the position to identify the time period during which a mineral right needs to be converted.

Where a title deed to immovable property contains a condition with regard to the reservation of mineral rights, such condition must remain in the title deed to that immovable property. If conditions relating to mineral rights are removed at this stage, the possibility exists that the Department of Minerals and Energy may regard the new owner of the immovable property as the holder of the mineral rights held there under.

Reservation of mineral rights in mortgage bonds
Mortgage bonds will not have to be made subject to the reservation of mineral rights. However, where a bond has been made subject to the reservation of mineral rights, reference to such rights should be treated as pro non scripto.

Issuing of copies of title deeds to minerals
A copy in lieu of original deeds to minerals may not be issued in instances where such title deed has been endorsed with regard to de-registration of the mineral rights in the deeds registry. A copy of the title deed relating to the said mineral rights must then be applied for at the Mineral and Petroleum Titles Registration Office. However, copies of deeds to minerals for information (regulation 66 of the Deeds Registries Act) and judicial purposes (regulation 67 of the Deeds Registries Act) may still be issued after de-registration of the mineral rights in the deeds registry.

Office fees
No office fees shall be payable in respect of the noting of de-registrations of mineral rights in deeds registries.

The matter of registration of mineral rights has not as yet been laid to rest. The Law Society of the Northern Province is contemplating court action to compel the Registrars to register - Editor of SA Deeds Journal.

Republished with permission

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