google.com, pub-3787448768440954, DIRECT, f08c47fec0942fa0 [google-translator]
LocalNews

Understanding mining tribute agreements

It is a requirement in terms of section 284 of the Act that the terms of every tribute agreement shall be reduced to writing and such agreement, together with the prescribed number of copies thereof shall be submitted to the mining commissioner for examination and approval by the MAB or the mining commissioner.

By Godknows Hofisi

HARARE (Mining Index) – TRIBUTE agreements are quite common in the mining sector. This article seeks to give readers insights into these agreements which are regulated by the Mines and Minerals Act (Chapter 21:05) (“the Act”).

Key definitions

According to section 283 of the Act a tribute agreement means any agreement or arrangement whereunder any person has given a tribute, licence, concession, authority or other right to mine a mining location to a tributor and any agreement to alter the terms of a tribute agreement which has been approved by the Mining Affairs Board (“MAB”) and any renewal of a tribute agreement which has been approved by the MAB.

In relation to a tribute agreement a tributor means the person who has been granted the right to mine a mining location under a tribute agreement. A grantor means any person who has under a tribute agreement given a tributor the right to mine a mining location.

Godknows Hofisi

Registration of tribute agreement

According to section 280 of the Act if any holder of a registered mining location has agreed in writing to grant a tribute or any other limited right to work such mining location to any other person (tributor), such tributor may, after such agreement has been approved in terms of this Act apply to the mining commissioner (now provincial mining director) for the registration of a notarial deed embodying the terms of such agreement.

The particulars of the tribute agreement shall include:

(a)        the names of the parties to the agreement; and

(b)        the name and registered number of the mining location or the registered number of the mining   lease to which such agreement relates; and

(c)        the date upon which the rights conferred by such agreement commence and expire.

It is emphasized that the tribute agreement has to be in the form of a notarial deed.

In terms of section 280(6) any agreement registered in terms of this section shall, while it remains in force, be binding upon any person who acquires the ownership of such mining location or any interest therein, and it shall not be lawful for the holder of such mining location to abandon the whole or part of such location during the period that such agreement remains in force.

Approval of tribute agreement

It is a requirement in terms of section 284 of the Act that the terms of every tribute agreement shall be reduced to writing and such agreement, together with the prescribed number of copies thereof shall be submitted to the mining commissioner for examination and approval by the MAB or the mining commissioner.

Approval by the mining commissioner

Sections 285(1) provides that the MAB may authorise the mining commissioner to approve any tribute agreement which conforms to a standard agreement drawn up and approved by the MAB. If he or she approves the tribute agreement the mining commissioner shall report such approval to the MAB, the occupier or the owner of the land concerned and furnish the MAB with a copy of the agreement.

In terms of section 283(3) of the Act if the mining commissioner does not himself approve a tribute agreement he shall submit the agreement to the MAB for consideration.

Approval by the Mining Affairs Board

According to section 286, if upon examination of any tribute agreement which has been submitted to it by a mining commissioner, the MAB may approve the agreement and shall endorse such approval thereon and shall inform the owner or occupier of the land concerned, if satisfied:

  1. a) that the method of fixing the tribute royalty payable to the grantor and the rate of such royalty are satisfactory and are not likely to retard the progress or expansion of the mine or bring about        the early cessation of mining operations, and
  2. b) that the interests of both the grantor and the tributor are adequately safeguarded, and
  3. c) that the period of such agreement is clearly defined and, if termination of the agreement by notice is provided for, that the interests of the parties are adequately protected.
  4. d) that the development work required by the agreement is reasonable in the circumstances and is not unduly burdensome or likely to cause the premature cessation of mining operations on the           mine, and
  5. e) that the tributor is required to carry out sufficient development work to ensure the continuity of mining operations on the mine, and
  6. f) that the grantor is entitled periodically and at reasonable times to inspect the mine and satisfy himself that the terms of the agreement are being observed, and
  7. g) that in all respects the agreement is satisfactory and likely to result in the mine being mined to the best advantage.

Disclaimer

This simplified article is for general information purposes only and does not constitute the writer’s professional advice.

Godknows Hofisi, LLB(UNISA), B.Acc(UZ), CA(Z), MBA(EBS,UK) is a legal practitioner / conveyancer with a local law firm, chartered accountant and insolvency practitioner. He writes in his personal capacity. He can be contacted on +263 772 246 900 or gohofisi@gmail.com.

ENDS// www.miningndex.co.zw

Twitter @IndexMining Facebook @MiningIndexNews LinkedIn @MiningIndex

Show More

Related Articles

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Back to top button
google.com, pub-3787448768440954, DIRECT, f08c47fec0942fa0