Mining and Energy Law
MHA advises clients on applications for prospecting rights and for conversions of old order rights, lodgement of notarised prospecting permits for registration with the Mining Titles Office and formation of joint ventures for mining projects.
The firm drafts relevant agreements and advises on compliance with applicable mining legislation.
MHA also provides legal advice on energy related matters, mainly in the area of laws regulating the distribution of electricity.
The firm advised a number of municipalities on the restructuring of their electricity distribution departments, the formation of municipal entities, and also participated in the process of establishing the Regional Electricity Distributor One.
Key Mining and energy law projects we have been involved in are:
- MHA was engaged by the Public Investment Corporation (PIC) to advise it on acquisition of an equity interest in one of the renewable energy independent power producer procurement programme (REIPPPPs), i.e. the Intekon Projects, which will on implementation, hold electricity generation licences permitting each to construct, own, operate, maintain, generate and sell energy from 64MW solar photovoltaic power generation facilities in the Northern Cape and Free State. This entailed review and advise on project finance documentation and project implementation agreements.
- Advised NERSA on the legal and regulatory framework applicable to the new generation capacity and independent power producers. This entailed the review and advice on the provisions of section 34 of the Electricity Regulation Act, 2006, the electricity regulations on new generation capacity, May 2011, the Section 34 Determinations on new generation capacity (IPP Procurement Programme), 2011 and the consultation process between NERSA and the Department of Energy on the development of the regulations as well as the determinations.
- Advised NERSA on the proposed amendments to the Electricity Regulation Act including in relation to section 34 (new generation capacity regulatory framework) and the Energy Regulator Act. This exercise entailed the following:
- In-depth analysis of the difference between transmission, distribution, reticulation and trading.
- The review of the ISMO Bill including determining the roles of the independent system and market operator visa viz Eskom and the IPPs.
- Advising on the impact of the proposed amendments to section 34 on NERSA’s regulatory powers and functions.
- Advised the DBSA on the funding of IPSA Group PLC’s 18 MW cogeneration power plant in Newcastle, KZN. This exercise entailed the undertaking of a due diligence investigation which included, inter alia, the review of a PPA with Eskom, draft generation licence from NERSA and various operational agreements including in relation to the sourcing of gas from Mozambique.
- Advised GHG reductions (Pty) Ltd on the regulatory framework applicable to new generation capacity and IPPs in respect of the proposed engagement with DOE for the establishment of an IPP pilot project in the Northern Cape.
- Part of a consortium that advised EDI Holdings (SOC) Limited on the formulation of a deal structure for the restructuring of the electricity distribution industry. MHA was responsible for all legal and regulatory aspects of this exercise including in relation to:
- Developing institutional and governance framework for the regional electricity distributors (REDs).
- Identifying and finding solutions on deal issues including shareholding among municipalities, national government and Eskom in the REDs, business/asset valuations, stranded assets, surcharge, loss of income stream for municipalities, compensation/purchase price, employees issues, etc.
- Developing draft transactions agreements and other relevant instruments including service delivery agreements, sale of business agreement, memorandum and articles of associations, shareholders’ agreements, power supply agreements, etc.
- MHA advised EDI Holdings (SOC) Limited from February 2007 to March 2011 on a full time basis through a secondment arrangement. In this capacity, MHA advised on various legal and regulatory issues including compliance with the PFMA, local government laws, procurement, drafting of contracts, drafting of legislation including electricity related legislation, commenting on NERSA regulations and MYPD related processes, etc.
- Advising a BEE group and negotiating a joint venture agreement with an estimated value of approximately R4bn pertaining to the establishment of a large manganese mining company to mine for manganese in the Kalahari in a joint venture with Renova Group of Russia.
- Advising a BEE group in the acquisition of a controlling stake in Holcim SA (now Afrisam) for an estimated value of R14bn. This transaction involved conducting a due diligence investigation, drafting and negotiating the sale of shares agreement and establishing and structuring community trusts.
- Advising a BEE consortium in the disposal of a significant minority interest in United Manganese of Kalahari (Pty) Ltd to Samancor Limited for the value of about R1bn. These agreements included a shareholders agreement, share sale agreements, pledge and cession agreements and preference share agreements.
- Advising Chancellor House in the acquisition of the entire shareholding of X-trata in Maloma Coal Mine, Swaziland. This included undertaking a due diligence exercise and negotiation of a suite of agreements including a share sale agreement and marketing agreements.
- Advising a BEE group in the acquisition of a substantial coal mine with an estimated value of R800m from BHP Coal Energy South Africa (Pty) Ltd. These agreements included a sale of prospecting right agreement, pledge and cession agreement, various guarantee undertakings and support agreements, shareholders agreement, share sale agreement and a mutual cooperation agreement.
- Advised Rio Tinto on the sale of over 70 prospecting rights to Coal of Africa. This transaction included negotiating and drafting the sale and purchase agreement, dealing with legal questions posed by bidders, advising on competition filing and drafting an application for ministerial consent in terms of section 11 of the MPRDA.
- Advised Akanani Consortium in the sale of its R800 million stake in Akanani Mining to Incwala. This transaction involved, inter alia, drafting of the sale and purchase agreement, drafting of the competition commission filing and drafting an application for ministerial consent in terms of section 11 of the MPRDA.
- Advised Akanani Investment Corporation (Pty) Ltd in the acquisition of warrants in AfriOre, a Canadian company listed on the Toronto Stock Exchange. This transaction involved, inter alia, the warrants sale and subscription agreements, the review of AfriOre’s founding documents and conducting of a high level due diligence investigation.