In the matter of Limpopo Economic Development Agency v Johannes Frederick Klopper NO, Christopher Raymond Rey NO, Liebenberg Dawid Ryk Van Der Merwe NO, Lebogane Mpakati NO, Dilokong Chrome Mine Pty Ltd, ASA Metals Pty Ltd, Eastern Asia Metal Investment Co Ltd, Minister of Mineral Resources, Director-General Department of Mineral Resources, Regional Manager Limpopo Division of the Department of Mineral Resources, Cheetah Chrome South Africa Pty Ltd, the Supreme Court of Appeal of South Africa has delivered its judgment. The case revolves around the interpretation of clause 17 of the Mining Right issued to Dilokong Chrome Mine Pty Ltd (DCM) under the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA). The Limpopo Economic Development Agency (LEDA) holds a 40 percent stake in ASA Metals Pty Ltd (ASA), which in turn is the sole shareholder of DCM. LEDA claimed that it had a 40 percent stake in DCM's mining right, while the Minister of Mineral Resources argued that LEDA only had a 40 percent shareholding in ASA. The court held that LEDA's interpretation of clause 17 was incorrect and that LEDA did not have a stake in DCM's mining right. The appeal was dismissed, and LEDA was ordered to pay the costs of the respondents.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no  982 2020  In the matter between   LIMPOPO ECONOMIC DEVELOPMENT AGENCY  APPELLANT  and  JOHANNES FREDERICK KLOPPER NO  CHRISTOPHER RAYMOND REY NO  LIEBENBERG DAWID RYK VAN DER MERWE NO  LEBOGANE MPAKATI NO  DILOKONG CHROME MINE  PTY  LTD  ASA METALS  PTY  LTD  EASTERN ASIA METAL INVESTMENT CO LTD  MINISTER OF MINERAL RESOURCES  DIRECTOR GENERAL  DEPARTMENT OF  FIRST RESPONDENT  SECOND RESPONDENT  THIRD RESPONDENT  FOURTH RESPONDENT  FIFTH RESPONDENT  SIXTH RESPONDENT  SEVENTH RESPONDENT  EIGHTH RESPONDENT   2  MINERAL RESOURCES  NINTH RESPONDENT  REGIONAL MANAGER  LIMPOPO DIVISION OF THE DEPARTMENT OF MINERAL RESOURCES  CHEETAH CHROME SOUTH AFRICA  PTY  LTD  TENTH RESPONDENT  ELEVENTH RESPONDENT  Neutral citation  Limpopo Economic Development Agency v Klopper NO   10 Others  Case no  982 2020   2022  ZASCA 73  25 May 2022   Coram   Petse DP  Plasket  Mbatha and Carelse JJA and Musi AJA  Heard   3 March 2022  Delivered   25 May 2022  Summary   Mineral and Petroleum Resources Development Act 28 of 2002      conversion of old order mining right into new order mining right     interpretation of shareholders agreement     interpretation of clause of mining right    3  ORDER  On appeal from  Gauteng Local Division of the High Court  Johannesburg  Coppin J sitting as court of first instance    The appeal is dismissed with costs  including the costs of two counsel   JUDGMENT  Plasket JA  Carelse JA and Musi AJA concurring     1   The appellant  the Limpopo Economic Development Agency  LEDA   holds 40  percent of the shares of the sixth respondent  ASA Metals  Pty  Ltd  ASA   The seventh respondent  Eastern Asia Metal Investment Co Ltd  EAMI   holds the remaining 60 percent of ASA   s shares  ASA  in turn  is the sole shareholder of the fifth respondent  Dilokong Chrome Mine  Pty  Ltd  DCM   Both DCM and ASA are under business rescue  the first and second respondents being the business rescue practitioners  BRPs  of DCM  and the third and fourth respondents being the BRPs of ASA    2   As DCM   s name suggests  it is a company that mines chrome  It now does so  on the authority of a mining right issued in terms of the Mineral and Petroleum Resources Development Act 28 of 2002  the MPRDA   Pursuant to a decision taken by DCM   s BRPs to sell its mining right to the eleventh respondent  Cheetah Chrome South Africa  Pty  Ltd  Cheetah   LEDA launched an application in the Gauteng Local Division of the High Court  Johannesburg  the high court  in which it sought wideranging relief that included  inter alia  a declarator that it held a 40 percent stake in DCM   s mining right  a prohibitory interdict to restrain DCM and its BRPs from disposing   4  of the mining right without LEDA   s consent  and a mandatory interdict to compel DCM to conclude an agreement with LEDA    contemplated by clause 17 of the Mining Right    within three months    3   The application was dismissed with costs by Coppin J  He refused leave to  appeal  Leave was subsequently granted on petition by this court    4   Despite the wide ranging relief that was claimed by LEDA  the issues for  determination are limited  They hinge  ultimately  on one issue  the interpretation of clause 17 of DCM   s mining right   Background  5   DCM was incorporated in 1978 and began its chrome mining operations  thereafter  It did so under the authority of a so called old order mining right     one issued in terms of the legislation which was in force before the coming into operation of the MPRDA on 1 May 2004 1   6   Item 7 of Schedule II provided for the conversion of old order mining rights to  new order mining rights issued in terms of the MPRDA  It did so by preserving the validity of old order mining rights for a period  during which holders were given the opportunity to apply for the conversion of their rights 2   7   Item 7 3  placed an obligation on the Minister of Minerals and Energy to convert  old order mining rights into mining rights under the MPRDA if the formal requirements of an application  set out in item 7 2   were complied with  if a holder    has conducted mining operations in respect of the right in question     if they undertake that they will continue with those mining operations once their right has been converted  if they have an approved environmental management program  and if they have paid the prescribed conversion fee   An old order mining right is defined in item 1 of Schedule II of the MPRDA as    any mining lease  mynpachten  consent to mine  permission to mine  claim licence  mining authorisation or right listed in Table 2 to this Schedule in force immediately before the date on which this Act took effect and in respect of which mining operations are being conducted     2 Item 7 1   1   5   8   In terms of item 7 7   on the conversion of the right and its registration  the old  order right ceases to exist  In terms of item 7 8   if a holder does not apply for conversion before the expiry of the period of grace referred to in item 7 1   the old order mining right ceases to exist    9   DCM applied for the conversion of its old order mining right  The converted  mining right was issued to it on 20 March 2014    10   DCM was placed under business rescue on 24 March 2016  As part of the  business rescue plan  the BRPs envisaged the sale of DCM   s mining right  LEDA was interested in acquiring it  To this end  it participated in a    bid out     Bidders were required to pay a deposit of R50 million in order to take part  LEDA made an offer of R450 million  Cheetah submitted an offer of R456 million  It was accordingly the successful bidder    11   At this point  LEDA  having become aware of clause 17 of DCM   s mining right  some time before the    bid out     sought to prevent the sale of the mining right to Cheetah  It did so  inter alia  by launching the proceedings that are the subject of this appeal  On 1 November 2019  the Director General of the Department of Mineral Resources  on behalf of the Minister  granted consent in terms of s 11 of the MPRDA for the cession of DCM   s mining right to Cheetah  LEDA has taken this decision on internal appeal to the Minister in terms of s 96 of the MPRDA   The shareholders agreement  12   LEDA  then known as the Limpopo Economic Development Enterprise   Limdev   and EAMI entered into a shareholders agreement on 11 December 2006  They did so in relation to the    company     defined in clause 1 2 4 as ASA  In clause 1 2 2  the term    business    is defined to mean    the business to be conducted by the company     including the    business of an investment holding company and more particularly  the holding of an investment in Dilokong Chrome Mine  Pty  Ltd    and     c onducting the business of a ferrochrome smelting plant and related activities  including sales of finished chrome products       6   13   DCM is referred to in clause 1 2 7 and  in clause 1 2 8  the term    designated  business    is defined as    the business to be carried on by DCM as a subsidiary of the company as contemplated in this agreement  namely the mining and sale of chrome ore to the company and to parties in favour of whom it has supply commitments       14   Two major issues that are dealt with in the shareholders agreement stand out   They are the planned expansion of the business of ASA and the inclusion of a BEE shareholder  As the second issue is particularly relevant to this matter I shall  in outlining the terms of the shareholders agreement focus on it    15   The need for the inclusion of a BEE shareholder in ASA arose because neither  LEDA or EAMI were historically disadvantaged South Africans for the purposes of the MPRDA3 and the Mining Charter  This was recognized in clause 1 2 1 of the shareholders agreement which defined the term    BEE transaction    as    any transaction s in terms of which shares are sold to a BEE corporate body to ensure that the company complies with the Mining Charter       16   Clause 5 1 provides that ASA   s shareholding structure would be changed to  cater for    the introduction of a BEE shareholder at the company level     LEDA was required to identify  and then negotiate with the BEE shareholder  subject to    the approval of the shareholders in general meeting     That person would purchase shares from LEDA so that they would hold 30 percent    of the total issued capital of the company     The entire process was required  in terms of clause 5 2  to be completed by the end of March 2007 or an agreed extended period  Clause 5 2 proceeds to say     It is further agreed that the identified BEE shareholder  if approved at the shareholders meeting  shall be expected to bind himself to this agreement  failing which he shall be disqualified  The parties hereby agree that for the identified BEE partner to be approved he The term    historically disadvantaged person    is defined in s 1 of the MPRDA  It means      a  any person  category of persons or community  disadvantaged by unfair discrimination before the Constitution took effect   b  any association  a majority of whose members are persons contemplated in paragraph  a    c  a juristic person  other than an association  which i  is managed and controlled by a person contemplated in paragraph  a  and that the persons collectively or as a group own and control a majority of the issued share capital or members  interest  and are able to control the majority of the members  vote  or  ii  is a subsidiary  as defined in section 1 e  of the Companies Act  1973  as a juristic person who is a historically disadvantaged person by virtue of the provisions of paragraph  c  i      3   7 must  amongst others  be broad based  compliant with the Broad Based Black Economic Empowerment Act and the mining Charter and be a single corporate entity       17   Clauses 5 4 and 5 5 record the effect of the inclusion of a BEE shareholder on  ASA   s shareholders  Prior to the pro

<p>Mineral and Petroleum Resources Development Act 28 of 2002 – conversion of old order mining right into new order mining right – interpretation of shareholders agreement – interpretation of clause of mining right.</p>

Limpopo Economic Development Agency v Johannes Frederick Klopper NO; Christopher Raymond Rey NO; Liebenberg Dawid Ryk Van Der Merwe NO; Lebogane Mpakati NO; Dilokong Chrome Mine (Pty) Ltd; ASA Metals (Pty) Ltd; Eastern Asia Metal Investment Co Ltd; Minister of Mineral Resources; Director-General: Department of Mineral Resources; Regional Manager, Limpopo Division of the Department of Mineral Resources; Cheetah Chrome South Africa (Pty) Ltd (982/2020) [2022] Supreme Court of Appeal