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In mining transactions, section 11 consent under the Mineral and Petroleum Resources Development Act is often treated as a regulatory step that must be worked through before a transaction can be completed. However, in practice the timing of that consent can become commercially decisive.
The recent judgment in Afrimat Iron Ore (Pty) Ltd v Minister of Mineral and Petroleum Resources and Others concerned a delay of approximately nine months in obtaining consent under section 11(1) of the MPRDA. For mining companies, investors and transaction parties, the case is a reminder that administrative delay is not always a neutral inconvenience. Where delay causes serious prejudice, it may give rise to a remedy under the Promotion of Administrative Justice Act.
The role of section 11 consent
Section 11(1) of the MPRDA provides that a prospecting right, mining right, interest in such a right, or controlling interest in a company or close corporation, may not be ceded, transferred, let, sublet, assigned, alienated or otherwise disposed of without the written consent of the Minister, except in the case of a change of controlling interest in listed companies.
This requirement places an administrative responsibility on the Minister. In practical terms, it means that certain mining transactions cannot be fully implemented until the required consent has been obtained. Where that consent is delayed, the consequences may extend well beyond legal process. Funding timelines, operational planning, export opportunities, investor confidence and employment may all be affected.
Administrative power and constitutional accountability
The Minister’s responsibility to decide a section 11 application must be understood within the broader constitutional framework governing public administration. Section 195 of the Constitution requires public administration to be guided by values that include accountability, transparency, fairness and efficiency.
Section 33 of the Constitution gives everyone the right to administrative action that is lawful, reasonable and procedurally fair. It also provides that persons whose rights have been adversely affected by administrative action have the right to be given written reasons. PAJA was enacted to give effect to these rights and to provide mechanisms through which administrative action, and administrative inaction, may be reviewed.
The Afrimat matter is significant because it illustrates that a failure to decide may itself become reviewable. PAJA is not only concerned with decisions that have been made unlawfully or unreasonably. It may also apply where an administrator has failed to take a decision within a reasonable time.
PAJA and the failure to make a decision
Section 6(2)(g) of PAJA allows for the judicial review of administrative action where there has been a failure to take a decision. Section 6(3) expands on this by providing that, where an administrator has a duty to make a decision, and no law prescribes a period within which that decision must be taken, a person may institute review proceedings on the basis that there has been an unreasonable delay.
This was central to Afrimat’s position. The complaint was not merely that the section 11 process was slow. The concern was that the delay had reached a point where it created serious commercial and operational prejudice.
The prejudice in the Afrimat matter
Afrimat required consent to acquire mining rights from Ochre Shimmer so that it could apply for allocations on the Iron Ore Export Corridor. Those allocations were available for a 10-year period. A failure to secure them could have affected Afrimat’s operations, threatened capital investment made in the mining rights and placed approximately 1,100 jobs at risk.
The delay was not simply an internal administrative backlog. It had the potential to affect a mining operation, employees, capital investment and the broader economic value attached to the rights in question. Public reporting on the judgment has similarly described the matter as one in which the court intervened after prolonged government delay in relation to the transfer of the mining right.
The court’s power to grant a just and equitable remedy
Courts are generally cautious about stepping into the role of an administrator. The ordinary position is that a court reviews administrative conduct rather than making the administrative decision itself. However, PAJA allows a court to grant a remedy that is just and equitable.
In the Afrimat matter, the court’s intervention reflects the seriousness of the prejudice caused by the delay. The case demonstrates circumstances in which a court may be prepared to go beyond ordinary review relief where administrative inaction has severe practical consequences.
This does not mean that every delayed section 11 application will justify urgent litigation or an order compelling consent. Each matter will depend on its own facts, the nature of the delay, the conduct of the parties, the reasons provided by the Department, and the prejudice caused. But affected parties are not always required to wait indefinitely.
Practical Implications
Mining companies and investors should treat section 11 applications as legally and commercially significant processes from the outset.
Applicants should keep a complete record of the application, all correspondence, follow-ups, requests for reasons and any responses received. They should also document the commercial consequences of delay, including transaction deadlines, funding conditions, export allocation windows, operational risks, employment implications and potential loss of investment value.
Where a delay becomes prolonged and unexplained, it may be necessary to assess whether the failure to decide has become unreasonable under PAJA. In appropriate circumstances, legal steps may be available to compel administrative accountability.
The broader point is that administrative power in the mining sector carries significant consequences. A delayed decision may affect not only the applicant, but employees, communities, investors and the continued operation of mineral assets. The Afrimat case shows that where section 11 delay threatens those interests, administrative silence may become a matter for judicial intervention.
Conclusion
The Afrimat judgment provides an important reminder that section 11 consent is not merely a procedural requirement. It is an administrative decision-making process that must be exercised in accordance with constitutional and PAJA principles.
For mining companies, where regulatory delay begins to threaten a transaction, an operation or employment, the issue should be managed carefully, documented properly and assessed against the remedies available under administrative law.
