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Part B: Mineral Rights - Part B-3: Large Scale Exploitation - 26. Large Scale Exploitation Licensing | 26.11 Termination of Licence

A mining law should state clearly in one place the various ways in which an exploration licence can terminate, which would include expiration of the term, surrender by the holder, and cancellation or withdrawal by the issuing authority. The law should make clear what the status of the licenced area is upon termination in each manner and any remaining potential liabilities or incapacities that the licence holder may have upon termination. Additionally, a mining law should clearly note instances where an exploration licence is automatically extended during the application process for a mining licence once a timely application by the holder has been filed.

In countries where the mining law provides that the State and the licence holder will enter into an agreement covering the exploitation stage, the agreement may specify that the licence will terminate in the event of a serious breach of the agreement that is not remedied after notice and opportunity to sure.

26.11. Example 1:

Article [_]

(1) Any right, permit, permission or licence granted or issued in terms of this [Act][Code][Law] shall lapse, whenever –

(a) it expires;

(b) the holder thereof is deceased and there are no successors in mineral right;

(c) a company or close corporation is deregistered in terms of the relevant

Acts and no application has been made or was made to the [Regulating

Authority] for consent or such permission has been refused;

(d) save for cases referred to in section [_](providing for exceptions to liquidation/sequestration rules), the holder is liquidated or sequestrated;

(e) it is cancelled in terms of section [_](addressing cancellation of licence); or

(f) it is abandoned.

Annotation

Drawn from South Africa’s mining law (2002), this provision states all of the different ways in which a mineral right granted pursuant to the Act may terminate. However, it does not go on to specify the consequences for the area, any installed structures and equipment, or the licence holder under each form of termination.

26.11. Example 2:

Article [_]

(1) Where the holder of a mineral concession intends to cease operations either during the period of or on termination of his licence, he shall, not less than three months or such other period as the [Regulating Authority] may allow before such cessation or termination, furnish to the [Regulating Authority a full register of assets showing those assets which he intends to remove and those which he intends to leave in the concession area, and shall further notify the [Regulating Authority] of any potentially hazardous substances, erections or excavations in the concession area.

(2) On receipt of a notice in terms of subsection (1) above, [Regulating Authority] shall, if he deems it necessary—

(a) certify that specified items of fixed machinery are necessary for the care and maintenance of the concession area and such items and machinery shall not be removed;

(b) require that specified buildings and other items of fixed machinery shall be removed; or

(c) require that potentially hazardous substances, erections and excavations be removed or made safe in such manner as he may direct.

(3) If removal of specified assets which the holder has indicated that he wishes to remove is prohibited under subsection 2(a) above, the Government shall pay reasonable compensation to the holder for such assets and any person who acquires a mineral concession over the area concerned shall reimburse the Government the sum equal to the compensation so paid.

(4) Upon cessation of operations by the holder of a mineral concession in terms of this clause, the mining area shall revert to the owner thereof provided that should the [Regulating Authority] determine that the area should be retained, it shall be so retained by the Government subject to payment of fair compensation to the owner for such right of retention.

(5) Any fresh water dam and the waters impounded thereby shall be left intact on cessation of operations in or termination of a mineral concession.

(6) Upon termination of any mineral concession the holder thereof shall deliver to the [Regulating Authority]—

(a) all records which the holder is obliged under the provisions of this [Act][Code][Law] to maintain; and

(b) all plans or maps of the area covered by the mineral concession prepared by the holder or at his instructions.

(7) Any person who fails to deliver any document required to be delivered under the provisions of subsection (1) within 14 days of being called upon to do so by the [Regulating Authority] shall be guilty of an offence.

(8) Where the holder of—

(a) a prospecting licence has made application for a renewal thereof or for either a retention licence or a mining licence over part of the area covered by his prospecting licence;

(b) a retention licence has made application for a renewal thereof or for a mining licence; or

(c) a mining licence or a minerals permit has made application for a renewal thereof, the [Regulating Authority] may extend the period of validity of such prospecting licence, retention licence, mining licence or minerals permit, as the case may be, pending his decision on the application.


Annotation

Drawn from Botswana’s mining law (1999), this provision details what happens to several key items connected to the licence upon termination: assets, records, ownership of the area under the licence, water resources, and maps describing the area. Similar to South Africa, Botswana addresses the different ways in which termination occurs elsewhere in the law, but this provision goes further to explicitly spell out the effect of termination beyond simply the end of the right to mine under the licence.