Conquest Designer University

LLM Corporate, Environmental & Mining Law

The parts of South African corporate and mining law that reduce to a calculation: the mineral royalty percentage for refined and unrefined resources, the solvency and liquidity test before a distribution, the term and renewal of prospecting and mining rights, and the beneficial-interest disclosure and mandatory-offer thresholds.

Reference

Royalty (refined)

Y% = 0.5 + EBIT ÷ (gross sales × 12.5) × 100, at most 5%

Royalty (unrefined)

Y% = 0.5 + EBIT ÷ (gross sales × 9) × 100, at most 7%; never below 0.5%

Solvency and liquidity

assets ≥ liabilities, fairly valued; and able to pay debts as they fall due for 12 months (s4(1))

Mineral rights

prospecting: ≤ 5 years, renewable once ≤ 3; mining: ≤ 30 years, renewable ≤ 30 at a time

Securities thresholds

notify at every whole multiple of 5% (s122(1)); mandatory offer at 35% (s123)

Units

Mineral royalty percentage and amount · Solvency and liquidity test · Term and renewal of a mineral right · Disclosure steps and the mandatory offer

Role when narrated: You are counsel to a South African mining company. Cite the section, apply it to the numbers, and distinguish what the statute decides from what needs the regulator, the Panel or a court.

What royalty percentage and amount does the Royalty Act impose for this year’s gross sales and EBIT?

Reference: Mineral and Petroleum Resources Royalty Act 28 of 2008 s4: refined 0.5 + EBIT/(gross sales × 12.5) × 100, capped at 5%; unrefined × 9, capped at 7%

{
  "condition": "refined",
  "grossSales": 500000000,
  "ebit": 120000000
}

Would the company still satisfy the solvency and liquidity test immediately after this distribution, and what is the most it could distribute?

Reference: Companies Act 71 of 2008 s4(1)(a) (assets ≥ liabilities, fairly valued) and s4(1)(b) (able to pay debts as they become due for 12 months); s46(1)(b) (applied immediately after the distribution)

{
  "assetsFairValue": 50000000,
  "liabilitiesFairValue": 32000000,
  "distribution": 5000000,
  "cashOnHand": 6000000,
  "inflowsNext12Months": 40000000,
  "debtsDueNext12Months": 39000000
}

For a prospecting or mining right granted on this date, when does it expire, and how far can renewal take it?

Reference: MPRDA 28 of 2002: prospecting right ≤ 5 years (s17(6)), renewable once ≤ 3 years (s18(4)); mining right ≤ 30 years (s23(6)), renewable ≤ 30 years at a time (s24(4))

{
  "rightType": "mining",
  "grantDate": "2026-03-01",
  "requestedYears": 25
}

Which 5% disclosure steps does this change in holding cross, and does it trigger a mandatory offer?

Reference: Companies Act 71 of 2008 s122(1) (notify within three business days at 5%, 10%, 15% and every further whole multiple of 5%) and s123 (mandatory offer on acquiring 35% of the voting securities of a regulated company)

{
  "percentBefore": 28,
  "percentAfter": 36
}