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Part B: Mineral Rights - Part B-5: Development Minerals - 30. Development Minerals Exploration Licence | 30.11 Revocation of Licence

A provision in which a licence is withdrawn and/or taken away by the Regulating Authority is referred to as revocation of the licence. Whereas suspension or monetary penalties may be imposed for various failures to comply with health, safety, environmental protection and other qualitative obligations – thereby providing an incentive to comply while protecting workers and communities from the consequences of such breaches, revocation of the licence is the ultimate penalty, the grounds for which should be limited and clearly stated, and due process should be granted to the Licensee, even in the administrative phase. The revocation provisions of the law should also state whether the ground for revocation is one that can be cured and, if so, within what timeframe after notice.

30.11 Example 1:

Article [_] Revocation of licence

(1) The [regulating entity] may revoke a licence granted where,

(a) the [Regulating Authority] is satisfied that the licensee has contravened or failed to comply with a term or condition of the licence or a requirement applicable to the licensee,

(b) the licensee is convicted of any offence relating to the smuggling or illegal sale or dealing in minerals, or

(c) fails to make payment on the due date, whether due to the Republic or another person, required by or under this [Law][Act][Code],

(d) becomes insolvent or bankrupt, enters into an agreement or scheme of composition with the holder’s creditors, or takes advantage of an enactment for the benefit of its debtors or goes into liquidation, except as part of a scheme for an arrangement or amalgamation,

(e) makes a statement to the [regulating entity] in connection with the mineral right which the holder knows or ought to have known to be materially false, or

(f) for a reason, becomes ineligible to apply for a mineral right under this [Law][Act][Code].

(2) The [Regulating Authority] shall, before suspending or cancelling a mineral right under subsection (1), give notice to the holder and shall in the notice, require the holder to remedy a breach of the condition of the mineral right within a reasonable period, being not less than sixty days and no more than 120 days, to show cause to the reasonable satisfaction of the [Regulating Authority] why the mineral right should not be suspended or cancelled.

(3) On cancellation of a mineral right under this section, the right of the holder shall cease but without prejudice to the liabilities or obligations incurred by another person in relation to the mineral right prior to the date of the cancellation.

(4) Without limiting the scope of section (2), the [Regulating Authority] shall cancel a mining lease or a restricted mining lease if the holder has failed other than for good cause, for a period of two years or more, to carry out any or a material part of the holder’s program or mineral operations.

(5) The [Regulating Authority] shall before cancelling a mining lease give notice to the holder and shall in the notice, require the holder to remedy the breach within a reasonable period, being not less than one hundred and twenty days, and where the breach cannot be remedied, to show cause to the reasonable satisfaction of the [Regulating Authority] why the mining lease or restricted mining lease should not be cancelled.

Annotation

Drawn from Zambia’s mining law (2008), this provision states clear causes for the revocation of the licence granted by the government. It closes the door for discretionary action from the government officers. Also, it includes the obligation of providing a term for defence of the Licensee, when it can justify or remedy the problem presented and in consequence, continue executing its rights.

30.11 Example 2:

Article [_]

(1) Subject to subsections (2), (3) and (4), the [Regulating Authority] may cancel or suspend any prospecting/reconnaissance permission, exploration right, mining right, mining permit or retention permit if the holder thereof –

(a) is conducting any prospecting/reconnaissance, exploration or mining operation in contravention of this [Law][Act][Code];

(b) breaches any material term or condition of such right, permit or permission;

(c) is contravening the approved environmental management programme; or

(d) has submitted inaccurate, incorrect or misleading information in connection with any matter required to be submitted under this [Law][Act][Code].

(2) Before acting under subsection (1), the [Regulating Authority] must –

(a) give written notice to the holder indicating the intention to suspend or cancel the right;

(b) set out the reasons why he or she is considering suspending or cancelling the right;

(c) afford the holder a reasonable opportunity to show why the right, permit or permission should not be suspended or cancelled; and

(d) notify the mortgagor, if any, of the exploration right, mining right or mining permit concerned of his or her intention to suspend or cancel the right or permit.

(3) The [Regulating Authority] must direct the holder to take specified measures to remedy any contravention, breach or failure.

(4) If the holder does not comply with the direction given under subsection (3), the [Regulating Authority] may act under subsection (1) against the holder after having –

(a) given the holder a reasonable opportunity to make representations; and

(b) considered any such representations.

(5) The [Regulating Authority] may by written notice to the holder lift a suspension if the holder –

(a) complies with a directive contemplated in subsection (3); or

(b) furnishes compelling reasons for the lifting of the suspension.

Annotation

Drawn from South Africa’s mining law (2002), this provision provides broader grounds for the cancellation or revocation of an exploration licence (called “prospecting right”) than do the provisions of the DRC Code. However, the South African provision also provides due process safeguards in the form of notice of grounds for revocation (to the Licensee and any mortgagees), an opportunity for the Licensee to respond with justifications, and required instructions for curative measures. The revocation can only proceed if the cause is not cured within the allotted timeframe.