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IN THE HIGH COURT
OF BOTSWANA HELD AT LOBATSE

M
AHLB-000027-12

DATE:
10 MAY 2013

IN THE MATTER
BETWEEN:

STRATA (PTY)
LTD……………………………………………………………………………..APPLICANT

AND

THE ATTORNEY
GENERAL…………………………………………………………RESPONDENT

Advocate Mr
Entrobus with Advocate Mr Vivian and Attorney Ms

K. Alidi for the
Applicant

Attorney Mr K.
Itseng for the Respondent

JUDGMENT

TAU J.

1. By notice of
motion filed on the 19th January 2012, the Applicant applied for an
order in the following terms:

a) Reviewing and
setting aside the decision of the Honourable Minister of Minerals,
Energy and Water Resources made on the 19th
September 2011, in terms
of which he cancelled the prospecting licences granted to the
Applicant;

b) Directing that
the Applicant be and is entitled to apply for renewal of each of the
licences within 30 days of the date of this
order in terms of Section
17 (3) of the Mines and Minerals Act and further that the Applicant
be and is entitled to submit, together
with such applications to
further transfer the licences;

c) Directing that
the Honourable Minister of Minerals Energy and Water Resources shall
thereafter consider the applications in terms
of the Act; and

d) Ordering the
Respondent to pay the costs of this application.

2. The Applicant is
Strata (Pty) Ltd, a private company duly incorporated with limited
liability and carrying on business as a prospector
for various
minerals and has its registered office at Fairground Office Park in
Gaborone. For purposes of these proceedings the
Applicant will be
referred to as Strata.

3. The Respondent is
The Attorney General in her representative capacity for and on behalf
of the Minister of Minerals, Energy and
Water Resources, in terms of
Section 3 (1) of the State Proceedings (Civil Actions by or against
Government or public officials)
Act.

4. The history of
the matter is, briefly, as follows: Strata applied for prospecting
licences for various mineral commodities between
June and November
2006. The Department of Geological Survey determined that Strata’s
applications did not meet the requirements
of the Mines and Minerals
Act. A decision was therefore made rejecting the Applicant’s
applications on the basis that Strata
did not have enough financial
resources to meet the minimum expenditure of at least P60 395 000
necessary to undertake the programme
of prospecting. It was further
decided that the private equity funding which was still being
considered was not available to carry
out exploration activities.

5. Strata appealed
to the Permanent Secretary who overturned the Director’s
decision and directed that Strata’s applications
be considered.
The Permanent Secretary thereafter wrote a letter to Strata
withdrawing the letter of rejection by the Director
of Geological
Survey and issued a letter of comfort to Strata so as to allow it to
complete the financial transactions it alleged
were about to be
completed. The undertaking given by the Permanent Secretary, for
applications to be processed, was conditional
on Strata meeting the
financial obligations as required by the Act.

6. Strata was
informed that its lack of performance on its earlier licences granted
in 2005 casts doubt on its ability to perform
on a much larger area
and that it was in default in terms of section 14 (1) (d) of the
Mines and Minerals Act which would constrain
the Minister to grant it
further licences.

7. The Ministry of
Minerals Energy and Water Resources took long to resolve Strata’s
issue which created a perception that
there was deliberate action to
frustrate Strata and to ultimately deny it prospecting licences. Due
to the delay and lack of communication
Strata appealed to the
Minister and ultimately to the Vice President. The Ministry decided
to issue the licences but directed the
Department of Geological
Survey to monitor performance of the company diligently. Strata was
ultimately issued with 87 (Eighty
seven) prospecting licences for
coal and coalbed methane, metals, Industrial Minerals and Radioactive
on the 19th August 2008.
The effective date for the validity period
of the licences was the 1st October 2008 and they were valid for
three years ending
the 30th September 2011.

8. On the 10th March
2009 Strata wrote a letter to the Permanent Secretary requesting
permission to transfer its licences to four
of its sister companies,
Bosa energy (Pty) Ltd, Ironton (Pty) Ltd, Ferro-m (Pty) Ltd and
Gassexx (Pty) Ltd indicating that it was
inappropriate to house all
licences under a single corporate entity, that different industry
players were interested in different
minerals and that no single
entity could finance exploration programmes for the entire portfolio
of licences. On the 5th June 2009,
the Department of Geological
Survey wrote to Strata asking it to submit details of the
transferees, ie, prove of access to financial
resources, technical
competence and experience to carry effective prospecting operations.
Strata was given 30 days within which
to submit such information.

9. Upon monitoring,
the Department of Geological Survey noticed that Strata had failed to
fulfil its obligations as set out in its
licences and was therefore
in default as per the Act and they recommended that Strata be
notified accordingly. Based on that advice
the Minister wrote to
Strata on the 15th March 2010 indicating that it had failed to carry
out the approved prospecting programme
and to meet the minimum annual
expenditure as set out in its licences. Strata was given 30 days
within which to remedy the default
and to show cause why its licences
could not be cancelled. The Applicant in response argued that it had
not complied as its transfer
applications had not been considered. It
argued that approval of transfer would enable it to remedy the
default and to meet its
financial obligations as required by the Act.
The Applicant requested the Minister to grant it an indulgence as it
was at an advanced
stage of negotiations with investors who were
willing to finance the exploration.

10. Following this
Strata met with the Department of Geological Survey officials whereat
it was resolved that Strata had arrear
rentals and it had not
performed per expectation. An undertaking was made at that meeting
that if Strata cleared its arrears and
provided information as
requested earlier transfer would be effected. Following this meeting
Strata paid arrear rentals less for
Uranium prospecting licences
which it indicated were being relinquished. Strata did not however
relinquish the licences as per
its undertaking nor submit the
required information.

11. As Strata had
not furnished the information required to effect transfer, ministry
officials urged the Minister to write Strata
notifying it of none
performance and to ask it to remedy the default. The Minister wrote
to Strata indicating that it has failed
to submit information as
requested to prove that its sister companies had access to technical
competence and financial resources
and gave it 30 days to remedy the
default and show cause why its licences should not be cancelled. In
response Strata indicated
that the notice was based on incorrect and
false information and it was difficult to respond to it. Strata
further said the Minister’s
notice was oblivious of the fact
that a material development had occurred whereat the officials had
undertaken to approve transfer
subject to arrear rentals being paid
which payment was effected. That despite that undertaking approval
for transfer did not take
place which led to the problem of potential
investors expressing disquiet at the failure to transfer. Strata
again asked for indulgence.

12. On the 27th May
2011, the Minister again wrote to Strata indicating that it had
failed to submit information to demonstrate
proof of access to
technical competence and financial resources for its sister companies
to enable him to consider its request
for transfer of licences and he
therefore rejected Strata’s applications for transfer. In that
letter the Minister indicated
further that Strata had failed to carry
out the approved prospecting programmes and to incur minimum annual
expenditure as set
out in its licences and gave it 30 days to show
cause why its licences could not be cancelled and to remedy the
default. Strata
wrote explaining that failure to approve transfer as
earlier requested had rendered it unable to comply and that it had
relinquished
some of its licences. Strata again asked for indulgence.
Following this the Minister cancelled the prospecting licences on the
19th September 2011. This prompted the current application.

13. The purpose of
this application is to ask Court to review and set aside the decision
of the Honourable Minister of Minerals,
Energy and Water Resources
made on the 19th September 2011, in terms of which he cancelled
prospecting licences held by the Applicant
which were granted to it
in August 2008.

14. The grounds upon
which the review is sought are that the decision to cancel was
irrational, grossly unreasonable and unlawful
and thus fall to be set
aside.

15. The Respondent
argues to the contrary. She contends that the decision to cancel the
licences was objective, reasonable and lawful.
That the decision was
based on the Applicant’s failure to perform in accordance with
its proposed prospecting programme.
The Respondent contends further
that the Applicant’s application did not meet the requirements
prescribed by the Act because
the Applicant failed to provide
adequate financial resources to carry out its proposed prospecting
operations. That the applicant
alleged that it had entered into
agreements with certain investors but had failed to demonstrate that
those investors had the required
resources or access to resources so
as to finance the Applicant’s prospecting operations. The
Respondent asserted that the
Applicant has failed to provide bank
statements or audited financial reports for itself or its investors
to satisfy the Minister
that it was financially capable of utilising
the licences fully. The Respondent therefore argued that due to the
glaring flaws
in the Applicant’s application as alluded to
above there were delays in processing the applications and transfer.

16. It is settled
that judicial review of administrative or executive action taken in
pursuance of a power entrusted to an official
by statute is a process
of control by courts. The courts will review and interfere with such
action in three circumstances where
a) the decision maker acts
illegally or contrary to the statute empowering him to act b) the
decision made is grossly unreasonable
and the court found it
irrational and c) the decision maker acted un-procedurally and the
decision making process is unfair. See
Raphethela v Attorney General
[2003] 1 BLR 591, Autlwetse v Botswana Democratic Party & others
[2001] 1 BLR 527.

17. The court ought
to be satisfied that the Applicant has made out a case for the review
of the decision. The onus therefore lies
on the Applicant to show
that the decision complained of was unreasonable, unfair and
irrational.

18. Does the
decision complained of fall foul of the aforementioned criteria for
judicial review of administrative actions? In order
to address this
issue I must first consider facts which are common cause.

19. It is common
cause that the Minister shall not approve an application for a
licence unless an Applicant demonstrates, among
other things, that it
has access to adequate financial resources, technical competence and
experience to effectively carry out
prospecting operations. It is
also common cause that the requirements for access or securing
adequate financial resources would
be met by the Applicant furnishing
either audited financial reports or the latest bank statements of the
company or of those investors
who it is claimed to have undertaken to
bankroll its prospecting operations. It is also not in dispute that
the same requirements
apply in respect of transferee companies where
a holder of a licence applies to transfer the same to another
company. The above
requirements are provided for under Part IV of the
Mines and Minerals Act [Cap 66:01]. The relevant provisions being
sections 14
and 23. For purposes of clarity it is necessary to
reproduce those sections. Section 14 provides that:

“14(1) The
Minister shall grant a prospecting licence if-

a) The Applicant
has, or has secured access to, adequate financial resources,
technical competence and experience to carry on effective
prospecting
operations;

b) The proposed
programme of prospecting operations is adequate…;

c) The proposed
prospecting area is not the same as, nor does it overlap to an
existing prospecting area …, and

d) The application
is not in default.

(2) The minister may
cause such investigations to be made or such negotiations or
consultations to be carried on as he may deem
necessary to enable him
to assess whether or not the criteria in subsection (1) has been
satisfied.

(3) Where an
application is made for a prospecting licence in respect of an area
over which a previous prospecting licence in respect
of the same or
an associated mineral has been held for seven years, no new
prospecting licence shall be granted before a period
of three months
has elapsed since the expiry of the previous licence, and the
Minister shall in the event of competing applications
grant a
prospecting licence to the applicant which in his own opinion has
best proposed programme. ”

20. Section 23 on
the other hand provides that:

“(1) Subject
to this Section, a prospecting licence or any interest therein or any
controlling interest in the holder thereof
may be transferred to any
other person provided that the Minister is notified not less than 30
days before the intended transfer;

(2) In such
notification, the applicant shall give to the Minister such details
of the transferee as would be required in the case
of an application
for a prospecting licence.

(3) Where the
Minister is satisfied that the transferee is not disqualified under
any provision of this Act from holding a prospecting
licence, he
shall notify the applicant of his approval of the transfer of the
prospecting licence or an interest therein. ”

21. It is clear from
the above quoted sections that when the Department of Geological
Survey and/or the Minister demanded that the
Applicant should furnish
it with information so as to process its applications or transfer of
licences they were acting within
the ambit of the Act.

22. Was the decision
making process ultra vires the empowering legislation, irrational
and/or unfair? If the Minister acted within
the parameters of the
Mines and Minerals Act or if in exercising his discretion he acted in
accordance with the letter and spirit
of the Act, his decision was
reasonable and fair then that would be the end of the Applicant’s
case. In order to address
this issue I must first consider the
relevant provision of the Act which empowers the Minister to cancel
the licences. Section
76 of the Mines and Minerals Act provides that:

“(1) Subject
to the provisions of this section, the Minister may suspend or cancel
a mineral concession if the holder thereof-

(a) Fails to make
any of the payments required by or under this Act on the due date;

(b) Contravenes any
provision of this Act or the conditions of his mineral concession or
the provisions of any other written law
relating to mines and
minerals.

(2) Before
suspending or cancelling a mineral concession under paragraphs (a)
and (b) of subsection (1), the Minister shall give
the hold thereof
notice in writing specifying the particular failure or contravention
and calling upon the holder to remedy the
same within such period,
being not less than 30 days, as may be specified in such notice.

(3) If the holder of
a mineral concession fails to remedy any failure or contravention
specified in paragraphs (a) and (b) of subsection
(1) within the
period specified in a notice issued under subsection (2), the
Minister may, by notice to the holder thereof, suspend
or cancel the
mineral concession forthwith. ” (my emphasis)

23. The Applicant
argued that the Minister erred in law by cancelling the licences as
he failed to follow a fair and proper process,
he misconceived the
nature of the discretion conferred on him, he took into account
irrelevant factors and failed to consider or
accord sufficient weight
to relevant and material factors which include failure to process
applications and transfer of licences
timeously.

24. The Respondent
on the other hand argued that the Applicant failed to remedy the
default when requested by the Minister to do
so arguing that there
was delay in approval of transfer which delay was caused by its
failure to meet the requirements of the Act
and to provide necessary
information as required. The Respondent further contended that the
Applicant failed to adduce evidence
that it was not in default or
that it had rectified defaults and its transferee companies had the
technical and financial competencies
as is required by the Act.

25. When the
Applicant first submitted its applications in 2006 the Department
determined that its applications did not meet the
requirements of the
Act. Chief amongst the failures was that the Applicant failed to
prove that it had enough financial resources
to meet the minimum
expenditure required. This prompted the Department to reject its
applications. The Applicant appealed to the
Permanent Secretary who
later issued a letter of comfort after withdrawing the Department’s
rejection letter. The Permanent’s
Secretary’s undertaking
to issue licences was conditional on the Applicant meeting the
financial obligations. Strata was
eventually issued with licences but
the Department still emphasised the need to comply with the Act and
conditions of its licences
especially financial obligations. Strata
applied to transfer the licences to its sister companies but the same
information earlier
requested was required from its sister companies,
the transferees. Strata was required to submit information relating
to technical
competencies, access to financial resources and
experience of transferees. When the Department of Surveys officials
undertook to
transfer the licences this was conditional on Strata
submitting the required information. Upon failure by Strata to submit
the
required information, the Minister gave it notice on the 15th
March 2010 to remedy the default or show cause why its licences could

not be cancelled. Strata failed to rectify the default but asked for
indulgence. The Minister issued another notice in December
2010.
Strata again failed to rectify the default nor to furnish the
required information. The Minister rejected transfer applications
and
issued the third notice in May 2011. Strata again asked for
indulgence but did not rectify the default. On all the three
occasions
when the Minister issued notices the Applicant was given 30
days to remedy the default and to show cause why its licences could

not be cancelled. The Applicant failed in all the three occasions to
remedy the

default instead it
argued that failure to transfer the licences had impacted on its
ability to remedy the default and to meet the
financial obligations.

26. It is clear from
the above that the Applicant has from the onset failed to meet the
requirements of the Act by primarily failing
to provide prove of
adequate financial resources. This caused delay in processing of its
applications. It is also clear that the
Applicant’s failure to
submit the required information led to delay in approval of transfer
of licences. The Applicant failed
to remedy the default when
requested to do so by the Minister. The Applicant also failed to
adduce evidence that it was not in
default or that it had remedied
the default even though it was given adequate notice to do so.
Evidence of intention to invest
by International Investors was also
not sufficient to meet the requirements of the Act.

27. Based on all the
above the decision by the Minister to cancel the licences was lawful,
fair and rational. He acted within the
ambit of the Act. The
Applicant has therefore failed to make out a case for review.

28. The Application
is therefore dismissed with costs.

DELIVERED IN OPEN
COURT AT LOBATSE

ON THE 10TH DAY
OF MAY 2013.

TTAU

JUDGE

Bookbinder Law
Practice – Legal practice for the Applicant

Attorney General
– Legal Practitioner for the Respondent

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