In the matter of Zincede Ngokwakho Housing (Pty) Ltd and Another v Matatiele Local Municipality (844/2024) [2026] ZASCA 17, the Supreme Court of Appeal of South Africa (SCA) considered whether a mining right holder, as defined in section 1 of the Mineral and Petroleum Resource Development Act 28 of 2002 (MPRDA), may access a property over which its mining right was granted without the landowner's consent or a valid lease agreement.
In 2012, the Minister of Mineral Resources and Energy, (as he was known at the time) converted, Zincede Ngokwakho Proprietary Limited's (Zincede), old order mining right for a period of 10-years to allow Zincede to mine gravel on property owned by the Matatiele Local Municipality (Municipality). Following various litigious disputes between the parties, Zincede and the Municipality entered into a settlement agreement and, in 2016, a subsequent lease agreement. The lease agreement was explicitly linked to the duration of the converted mining right, including any renewal period associated with such converted mining right.
On 4 December 2020, Zincede ceded and transferred its converted mining right to Stonewell Quarry Proprietary Limited (Stonewell), in terms of section 11 of the MPRDA. When Stonewell sought to renew the lease agreement in late 2022, the Municipality refused, citing its intention to sell the property and arguing that the lease agreement had terminated upon cession of the converted mining right from Zincede to Stonewell. The Municipality subsequently gave Zincede and Stonewell 60 days' notice to vacate the property, which they refused to do, giving rise to the present dispute.
Court a quo
The court a quo initially found in favour of the Municipality, declaring that no valid lease agreement existed and that the mining right alone did not entitle Stonewell to remain on the property. The court ordered the appellants (Zincede and Stonewell) to vacate the area over which the converted mining right was granted and to rehabilitate the area accordingly. It held that a mining right holder required a valid lease agreement to occupy property over which it was granted to conduct mining operations.
Appeal
The SCA identified several key issues, most notably whether a mining right provides for access to property in the absence of a valid lease agreement, whether the cession of the mining right in terms of section 11 of the MPRDA was valid without the landowner's consent and finally, whether section 54 of the MPRDA, which deals with disputes regarding compensation, was complied with.
In a judgment delivered by Judge Baartman, the SCA upheld the appeal by Zincede and Stonewell and set aside the court a quo's order. The SCA's reasoning focused on several legal principles. First, it emphasised the statutory rights of mining right holders under section 5(3) of the MPRDA, which unambiguously permits a mining right holder to enter the land, bring equipment, and conduct operations. This confirms the common law principles where a landowner must allow access to enable the effective exercise of the rights. The SCA made it clear that this matter differed from Maledu1, as mining had been conducted for almost ten years "with the Municipality's concurrence".
Second, the SCA also found that Zincede and Stonewell complied with section 11(1) of the MPRDA and therefore consent of the landowner was not required for purposes of the transfer of the mining right. Finally, the SCA confirmed the statutory position that, while waiting for the renewal of the converted mining right to be either granted or refused, the converted mining right was still valid in accordance with section 24(5) of the MPRDA.
Notably, the SCA found that section 54 of the MPRDA, which deals with the process in circumstances when parties cannot agree compensation, to not be applicable in the circumstances. The SCA emphasised that section 54 of the MPRDA is a compensation mechanism triggered only when a specific "overriding jurisdictional factor" exists. The holder of a mining right must be prevented from commencing or conducting operations because the landowner refuses access or makes unreasonable demands. In this matter, Stonewell had been occupying and actively mining the property since December 2020 and access had not been denied. As such, the legal requirements to trigger the operation of section 54 of the MPRDA were not met.
The SCA concluded that a valid lease agreement is not a prerequisite for a mining right holder to exercise their statutory right to access and mine land over which such mining right was granted.
