Mpilo and Zen Holdings (Pty) Ltd v Centurion Mining Company (Pty) Ltd and others

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Roelofse AJ
• Judgment Date: 26 July 2023
• Citation: 2023 JDR 2783 (MN)
• Hearing Date: 14 July 2023
• Docket Number: 2815/2023
• Court: Mpumalanga Division (Main Seat)

Roelofse AJ:

INTRODUCTION

[1]

This application concerns mine dumps, also referred to as tailings (“tailings”) situated on a portion of the remaining extent of the farm Camelot Lot 320 JU (“the property”). The tailings are a by-product of previous mining activities that have taken place on the property.

[2]

A proper perspective on these tailings is important for purposes of this application. Mpilo’s [1] geologist estimates the extent of the tailings to be three hundred and thirty thousand tons. To put this in further perspective, during argument counsel for Mpilo informed the court that a truck used for purposes of removing material such as the tailings is able to take 35 tonnes at a time. This means that it would take approximately ten thousand truck loads to remove the tailings from the property. In addition to the substantial volume of the tailings, the tailings is also

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extremely valuable because the tailings contain gold. The gold in the tailings is estimated to be worth approximately R 435 million.

[3]

The property belongs to government and is under the control of the third respondent (“the Minister of Agriculture”) through the Department of Agriculture, Rural Development, Land and Environmental Affairs (“DARLLD”).

[4]

The facts of this matter are un-complicated - the law is not.

[5]

The applicant (“Mpilo”) is the holder of a mining permit that was issued in terms of section 27 of the Mineral and Petroleum Resources Development Act 28 of 2002 (“the MPRDA”) (“the permit”). The permit was issued by the Minister of Mineral Resources [2] on 25 January 2023. The permit grants Mpilo the right to mine for gold ore on the property.

[6]

The first respondent (“Centurion”) appealed the decision to grant the permit to Mpilo in terms of section 96 (1) of the MPRDA. The primary basis of Centurion’s appeal is that it is the owner of the tailings. The appeal is still pending. Centurion’s ownership of the tailings forms the subject matter of the pending appeal.

[7]

Despite the pending appeal, Mpilo endeavoured to get access to the property pursuant to the permit by engaging with DARLLD. DARLLD refused to grant Mpilo access to the property because the DARLLD was of view that the permit was subject to Centurion’s right to the tailings.

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[8]

On 10 May 2023, Mpilo was informed that the Regional Manager of the Mpumalanga Regional office of the Mpumalanga Department of Mineral Resources (“DMRE”) has declared that Mpilo is the owner of the tailings on the property.

[9]

Mpilo, through its attorneys, challenged DARLLD and the Regional Manager’s decisions because through the decisions, Mpilo was prevented from exercising its mining rights on the property.

[10]

The Chief Director of the Mpumalanga Provincial Office of DARLLD granted Centurion access to the property for purposes of removing the tailings thereon. Mpilo challenged this decision and sought an undertaking from DARLLD that DARLLD will take the necessary steps to ensure that the tailings are not removed from the property pending the outcome of the appeal, failing which the applicant would seek an urgent interdict. No undertaking was given.

[11]

Mpilo approached this court for an urgent interim interdict. In its notice of Motion, Mpilo seeks an interim interdict against the respondents aimed at preventing the removal of the tailings from the property pending a review application Mpilo intends to institute within 90 days after granting of the interim interdict.

[12]

Centurion and the Minister of Mineral Resources oppose the application. Only Centurion delivered and filed an answering affidavit.

URGENCY

[13]

I do not deem it necessary to dwell too much on the issue of urgency. In respect of urgency Mpilo alleges in paragraph 57 of its founding affidavit as follows:

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‘Considering that the first respondent’s attorneys have expressly stated that their client is in the process of operations regarding the tailings at the property, we all understand operations to be that the first respondent will comments (if not already commenced) to the removal of the tailings from the property.’

[14]

In its answering affidavit, Centurion does not deny this allegation. Centurion merely alleges that the requirements for urgency not have not been met by Mpilo. In the argument before me the lack of urgency was not seriously contested. I therefore find that the matter is urgent and the application is enrolled as such.

MERITS

[15]

The decisions Mpilo seeks to set aside is the decision of the Regional Manager of the DMRE, dated 9 May 2023 (“the DMRE decision”) and the decision of Chief Director of DARLLD, dated 12 June 2023 (“the DARLLD decision”).

The DMRE decision

[16]

On 9 May 2023, the Regional Manager of DMRE communicated to Mpilo as follows:

‘Centurion Mining Company has provided the information to the Department of mineral resources. The documents that were submitted clearly shows that Barend Daniel Jordaan was the holder of various permits issued under provision [sic] 161 of the Mining Rights Act of 1967. There was a transaction wherein Barend Daniel Jordaan entered into a sale agreement with Norse Mining Company (Pty) Ltd (now known as Centurion Mining Company (Pty) Ltd to sell the various permits and one of the permits is Permit 42/75 issued on Camelot 320 JU [the property] to retain possession and treat tailings.

Centurion Mining Company has therefore submitted proof that they are the owners of the dump as they are in possession of the claim licence for base metals on Camelot 320 JU.

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In terms of the precedence set out in the case of De Beers Consolidated Ltd v Ataqua Mining (Pty) Ltd and Others, the court ruled that historical mining dumps that were created before the enactment of the Minerals [sic] and Petroleum Resources Development Act 28 of 2002 (referred to as the MPRDA) are not regulated by the MPRDA the ownership thereof must be dealt with in terms of common law and the Minerals Act.’

[17]

After Mpilo challenged the decision, the Regional Manager reaffirmed his position set out above and also recorded that “. . . . the Department does not have jurisdiction over those dumps and you are welcome to Institute legal proceedings in the High Court of South Africa for reviewing of the letter as it is within your right.”

The DARLLD decision

[18]

On 12 June 2023, the Chief Director of DARLLD informed Mpilo as follows:

‘We wish to indicate that Mpilo and Zen Holdings (Pty) Ltd (Mpilo and Zen) and Centurion Mining Company (Pty) Ltd where in dispute regarding the ownership of the tailings dam on our subject property [the property].

The matter was referred to the Department of mineral resources and energy (DMRE) as the competent authority.

DMRE has concluded the matter by deciding that Centurion Mining Company has submitted proof that it is the owner of the tailings dump [the tailings] as they are in possession of the claim licence for base metals on Camelot 320 JU.

Based on the decision by DMRE we have granted Centurion access to the property for purposes of removing their tailings dump.

Your clients (Mpilo and Zen) are welcome to engage with the Department (DALRRD) on gaining access in line with their mining permit, the Departmental procedures will be followed.

We wish to advise that we consider the matter on our part as settled.’

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[19]

The DARLLD decision was clearly premised upon the DRME’s decision that Centurion is the owner of the tailings.

[20]

Mpilo, seeking an interim interdict pending a review of the DRME and DARLLD decisions. Such review is still to be instituted by Mpilo.

[21]

An interim interdict does not involve a final determination of the rights of the parties (See: Apleni v Minister of Law and Order and Others; Lamani v Minister of Law and Order and Others. [3] ) - it merely serves to preserve the status quo pending the final determination of the parties’ rights. Mpilo seeks to protect the tailings pending a determination of its and Centurion’s rights to the tailings. This is what this dispute in essence is all about. To the extent that I will be making findings in this judgment over the ownership of the tailings, I do so in order to consider whether Mpilo has a prima facie right worthy of protection against an imminent infringement.

[22]

Mpilo must prove on a balance of probabilities four requirements for an interim interdict to be granted to it: a prima facie right; a reasonable apprehension of harm; balance of convenience; and no alternative remedy. I proceed to deal with these requirements in turn.

Prima facie right

[23]

For establishing a prima facie right, Mpilo relies upon the permit which, according to Mpilo, gives it a right to mine the tailings. The essence of Mpilo’s case is that in terms of the definitions of mining and mineral in the MPDRA and the fact

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that it has been issued with a mining licence in the respect of the property which includes the tailings thereupon, gives it a prima facie right to protection pending a final decision in intended review.

[24]

Centurion’s stance is that the mining permit does not give Mpilo a right to deal with the tailings as same is owned by Centurion. For this stance, Centurion relies upon the unreported decision in De Beers Consolidated Mines Ltd v Ataqua Mining (Pty) Ltd & Others [4] (“De Beers”). In De Beers it was essentially found that tailings constitute movables which are owned by the person who created the tailings through severing the tailings from the natural earth and, that tailings are not regulated by the MPRDA. The first respondent further alleges that the applicant did not challenge the De Beers decision.

The relevant provisions of the MPRDA

[25]

The permit is a...