Valuable insight into the legality of mining law and regulations in South Africa

13 July 2023

South Africa is home to an abundance and diverse range of precious mineral resources, which is a major attraction for mining companies. However, a mining company cannot just set up shop and start digging; South African law sets out extensive regulations with which mining companies must comply, including sorting permission from the Department of Mineral Resources (DMR), and legislation about which they need to be fully aware, including the Mineral and Petroleum Resources Development Act, 2002 (MPRDA), The Mining Charter and the National Environmental Management Act, 1998 (NEMA). These are the primary and predominant laws governing the exploitation of minerals and petroleum resources within South African borders.

Another pressing element to consider is the difficulty of navigating the legal landscape between mining companies and local communities regarding the environmental impact of mining activities. 

Compliance is an essential element for members of the mining sector, and it is important to follow due process and meet all compliance regulations. However, that compliance may not always be possible – or reasonable.

The recent case of Global Environmental Trust and Others v Tendele Coal Mining (Pty) Ltd and Others [2021] 2 All SA 1 (SCA) dealt with challenging mining operations amidst a supposed lack of compliance. The Global Environmental Trust (GTE) requested the High Court to grant an interdict against Tendele, essentially asking the court to compel the mining house to stop all operations until it duly complies with the applicable legislation. GTE sought an order that until such compliance had been achieved, any mining operations would be unlawful. GTE argued that Tendele’s mining operations were unlawful due to the latter’s:

  • Failure to comply with the regulations, in particular, environmental authorisation in terms of NEMA, with the result that the activities were causing environmental harm and violating the rights of local communities; 
  • Failure to obtain the necessary approvals from the local municipality, meaning that Tendele did not have authority to use the land; and
  • Failure to obtain a waste management licence as stipulated by the Waste Act, 2008.

What might have seemed a sure-fire case for GTE turned out to be the opposite. The court dismissed the interdict application on the basis that GTE had, firstly, failed to show sufficient evidence that Tendele’s mining activity was a specified activity in accordance with NEMA which required environmental authorisation and secondly, that NEMA was not even relevant to the matter as the MPRDA covered all environmental factors. 

GTE appealed the High Court’s ruling and the matter went before the Supreme Court of Appeal, which was tasked with the same question faced by the High Court: are Tendele’s mining activities illegal, considering that it had not obtained certain statutory authorisations? The five-judge bench rendered both a majority and a minority judgment in the matter, indicating the thorny nature of the matter. 

The majority judgment found that GTE’s defective pleadings did not make out a case or provide evidence to show Tendele was conducting any of the listed activities which would have triggered the requirement for environmental authorisation as contemplated in NEMA. Due to this failure, the majority declined to provide the proper interpretation of NEMA and dismissed the application on the basis that the requirements for an interdict had simply not been met.

Conversely, the minority judgment penned by Judge Schippers found that Tendele’s mining operations were in fact unlawful as environmental authorisation under NEMA was indeed required. Schippers appeared to posit that it was not only GTE’s interests at play in the matter:

The absence of clarity and certainty concerning the correct interpretation [of MPRDA and NEMA] will potentially weaken the environmental protections sought to be achieved by s24 of the Constitution and NEMA. This, in turn, would result in the flouting of environmental standards and undermine the rule of law.”

Schippers found that in any event, the obligation to secure environmental authorisation prior to undertaking a listed activity had already existed before the commencement of NEMA, with the new Act providing for mining activities which, if undertaken, would trigger various listed activities and therefore require environmental authorisation. This, Schippers found, was a crucial consideration in light of the fact that:

Tendele… never disputed the allegation that its mining operations incorporated listed activities. The dissenting view was that environmental authorisation to conduct a listed activity… is a requirement for mining, and therefore Tendele’s mining operations were said to be unlawful.

Despite Tendele’s success in the case (on a technical point), the minority judgment holds significant sway. It is clear that that mining houses must treat compliance with the relevant legislation, in particular NEMA’s stipulations, as an essential precursor prior to the commencement of mining activities. It underscores the growing recognition of environmental rights, including the duty of mining companies to focus on the importance of environmental protection and comply with environmental rights. The ruling both affirms the importance of environmental protection and the rights of affected communities by mining activities and the necessity of complying with all mining regulations. The SCA emphasised the fact that all mining companies are required to be acutely cognisant about acquiring the required licensing needed for operation, alongside having a thorough understanding of the legal and regulatory framework governing mining in South Africa. Fulfilling these critical obligations is essential to avoiding both the costly legal and operational implications resulting from a halt in production due to even unintended non-compliance.

By Ryan du Preez | Director

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