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IN
THE HIGH COURT OF BOTSWANA

HELD AT LOBATSE

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

J U D G M E N T

TAU
J.

1. By notice of motion
filed on the 19^th 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 19^th
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 19^th August 2008.  The
effective date for the validity period of the licences was the 1^st
October 2008 and they were valid for three years ending the 30^th
September 2011.

8. On the 10^th
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 5^th 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 15^th 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 27^th
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 19^th 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 19^th 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
15^th 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 10^TH DAY OF MAY 2013.

________________

T TAU

JUDGE

Bookbinder Law Practice – Legal practice for
the Applicant

Attorney General – Legal Practitioner for the
Respondent

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