AQUILA STEEL SA (PTY) LTD v SOUTH AFRICAN STEEL COMPANY (PTY) LTD
(unreported, Case No. 14612/2013, Gauteng North High Court, 14 March 2014)
Importance
Parties
Facts
This is a disappointing case for the cause of environmental justice
activism on three levels. Firstly, the court adopted a very narrow and
traditional view regarding the scope and purpose of consultation
envisaged by s 5(4)(c) of the MPRDA and came out firmly in favour of a
position that does not see any role for consensus. Secondly, the court
stated that land governed by the Town Planning and Townships
Ordinance, 1986 falling outside of a town planning scheme does not
require any approval from the local authority prior to the
commencement of prospecting/mining (thus limiting the reach of
Maccsand in the areas governed by the Ordinance). Finally, the court
found that the presence of graves and burial sites protected by the
National Heritage Resources Act, 1999 on a property is not a bar to a
rights holder being granted access to such property (without however
properly considering the prohibitions set out in s 36(3)(c) of this Act.
Applicant: Aquila Steel SA (Pty) Ltd
Respondent: South African Steel Company (Pty) Ltd
Aquila Steel held a prospecting right to a number of farms in the
district of Thabazimbi, Limpopo. The right commenced on 18 July 2007
and continued in force until 17 July 2012. On 12 April 2012 the
company applied for renewal of the prospecting right for a further
three-year period.
At the time the prospecting right was granted to Aquila, the
properties were owned by Southern Palace Investments 216 (Pty) Ltd.
Aquila commenced with iron-ore prospecting activities shortly after it
was granted the prospecting right and did so with the full support,
knowledge and consent of Southern Palace. In about August 2008,
however, the properties were sold to the South African Steel Company
(Pty) Ltd (SA Steel – ostensibly a competitor). In September 2008, SA
Steel informed Aquila that it was aware of its prospecting rights over
the properties and that it intended to challenge this right and/or
Aquila’s general conduct in exercising it. In this regard, it is relevant to
note that Aquila needed to effect some amendments to its approved
Environmental Management Plan (EMP). This communication sparked
a protracted dispute between the two entities, and in the same month
employees of SA Steel changed the locks to the separate entrance gate
to the properties previously used by Aquila’s employees to enter the
properties.
In October 2008 Aquila applied for an urgent interdict to prevent
SA Steel from continuing to deny it access to the properties for
purposes of conducting prospecting operations. SA Steel undertook to
allow Aquila access for purposes of exercising its prospecting rights,
but refused access for any other purpose or for embarking upon
activities not provided for in terms of this right, or that exceeded its
terms. In November 2008 this undertaking was made an order of
court. It thus excluded activities set out in the amendment of the EMP
pending before the authorities. Aquila’s amended EMP was finally
approved on 3 September 2009 but after that time SA Steel continued
to deny Aquila access to the property.
Relief Sought
Legal Issues
Judgment
From that time until the hearing in the current matter, the parties
attempted to reach a compromise but all their negotiations came to
naught. Meanwhile (unsurprisingly) it appeared that SA Steel was
intent on proceeding with its own plans for the development of the
properties, namely the establishment of a metallurgical plant for the
production of steel products from iron ore, coal and associated
activities. The last date upon which Aquila had been able to access the
properties for purposes of conducting its prospecting work
programme was October 2008. This also prevented them from
rehabilitating the prospecting site and access roads.
An interdict preventing SA Steel from denying Aquila access to certain
properties for purposes of conducting its prospecting operations.
& Issue 1: Did Aquila had a right of access to the properties concerned
for purposes of exercising its prospecting rights?
Judgment: Cilliers AJ’s stance on this point had already been
prefigured at the start of the judgment, when citing the “imperatives”
of s 5(4)(c) of the MPRDA, and with reference in the Northern Cape
decision of Sechaba v Kotze [2007] 4 All SA 811 (NC), he had noted that
the duty incumbent upon the rights’ holder to follow a consultative
process with the landowner was intended to “soften the blow”
inevitably suffered as a consequence of the granting of a prospecting
(or mining) right (para 9). Section 5(4)(c) of the MPRDA provides that
no person may prospect for minerals (amongst other actions) without
“notifying and consulting with the landowner or lawful occupier of the
land in question”. After restating this provision, Cilliers found that it
was “clear” that a person in possession of an approved EMP, and a
valid prospecting right, was entitled to prospect for any mineral and to
commence with work after notifying the landowner or lawful occupier
(para 32). This, in the terms of s 5(3)(a) of the MPRDA allows the
holder of the right to enter the relevant prospecting area together
with his or her employees; to bring onto the land any plant, machinery
or equipment; and to build, construct or lay down any surface
infrastructure required for purposes of prospecting (para 33).
The court found that Aquila had complied with all the provisions of
s 5(4) of the Act (and was hence entitled to the rights in s 5(3)(a)) (para
34). This was because (a) s 18(5) of the MPRDA made it clear that the
previous prospecting right remained in force until the application for
renewal thereof had been granted or refused. As at the date of
hearing this had still not occurred; (b) Aquila had notified and
consulted with the previous owner of the property at the time it
acquired the prospecting right. As a point of law, the court held that
“it was not required of the Applicant to consult again with the new
owner of the properties or to notify the new owner of the properties
at the time that the Respondent acquired ownership of the properties
during or about August 2008”. In any event it appeared that Aquila
had consulted with SA Steel during or about September 2008 (para
35). Wishing to underline the limitations of s 5(4)(c), Cilliers went on
to emphasize that the purpose of the consultative process envisaged
in s 5(4)(c) was to afford the landowner the opportunity to “minimize
damages” inevitably suffered as a consequence of the granting of a
prospecting right. This process did not require consensus as a pre-
requisite for the holder to access the land (para 36). If s 5(4)(c) did
require consensus:
“[I]t would make a mockery of the purpose for which the State
grants prospecting right to the holders thereof; i.e. the prevalence
of State power of control over the mineral resources of the
Republic of South Africa and the concomitant ousting of the
mineral rights of the landowner and/or the holder of mineral
rights” (para 37).
The appropriate mechanisms, in the case of disputes arising between
the prospecting rights holder and the landowner, were s 10(2) and 54
of the MPRDA (para 38). Taking the above into account, the court
found that Aquila had a “clear right” to access the properties (para 40).
SA Steel alleged it was entitled to lawfully deny Aquila access to the
properties. In the remainder of the judgment, the court dealt with
these grounds, two of which are relevant for environmental activism.
Issue 2: Was Aquila required to obtain the requisite approval of the
local authority in respect of zoning/rezoning? Did failure to obtain
zoning approval prevent Aquila from exercising its prospecting rights?
Judgment: Counsel for Aquila had ostensibly argued that prospecting
is a land use which requires approval of the local authority in whose
jurisdiction the land is situated (para 46). After surveying the
legislative context – which included the Town Planning and Townships
Ordinance 15 of 1986 – Cilliers AJ found himself unable to agree with
this statement (para 48). It was indeed settled law that the holder of a
mining right or permit had to comply with zoning requirements in
addition to the relevant provisions of the MPRDA. The Maccsand
decision had made it clear that when a proposed activity requires
approval under both the MPRDA and the Land Use Planning Ordinance
(LUPO), the Constitution requires the relevant spheres of government
to co-operate with one another in mutual trust and good faith to
coordinate their actions. This, however, did not give rise to the
exercise of a “veto power” by the local sphere of government (para
49(ii)).
The judge was quick to point out that the properties in this matter
were not situated in the Cape Province (para 52), and that regard must
be had to each provincial ordinance. Any enquiry into whether or not
land use approval by the local authority is required before mining can
commence will accordingly depend upon the wording of the particular
provincial legislation (para 53). The court then discussed the decision
in Mtunzini to justify his position that everything depends on the
wording of the particular provincial legislation in question (although
he identified this erroneously as the Kwazulu-Natal Planning and
Development Act, 2008) (para 54).
Having identified the relevant provincial legislation as the Town
Planning and Townships Ordinance he noted that s 18(1) of the
Ordinance provides for situations where a local authority may prepare
a town planning scheme in respect of all or any land situated both
within and outside of its area of jurisdiction, and circumstances where
it is required to prepare such a scheme. The essential difference
between land situated within and outside of its area of jurisdiction is
that for the latter the local authority must act with the consent of the
“Administrator” and may not act on its own accord (para 56). It was
therefore clear, the judge held:
“[A]ll land within the jurisdiction of a local authority is not
automatically part of a town planning scheme and zoned as such.
Only those portions of land within the area of jurisdiction of the
local authority in respect of which a town planning scheme was
prepared falls inside a town planning scheme”.
Furthermore, s 21(1) of the Ordinance provided that a local authority
shall not prepare a town planning scheme in respect of land which is
proclaimed land or land on which prospecting, digging or mining
operations are being carried out, unless such land was situated within
an approved township (para 60). A local authority may however
prepare a town planning scheme in respect of proclaimed land which
is not being used for mining purposes or purposes incidental thereto
with the written consent of the owner of the land, the DirectorGeneral: Mineral and Energy Affairs, and the holder of the mining title
(para 60).
It was therefore clear from the aforesaid provisions, Cilliers AJ said,
that certain land within the jurisdiction of a local municipality falls
outside of a town-planning scheme and would accordingly not be
within a zoning scheme (para 61). Approval by a local authority
governed by the Town Planning and Townships Ordinance for the
exercise of a prospecting right is thus not required in respect of land
falling outside of a town-planning scheme. The properties in question
apparently did fall outside such a scheme (para 62).
On the question whether Integrated Development Plans adopted
by Municipal Councils impacted upon this state of affairs, Cilliers AJ
pointed formalistically to the provisions of s 35(1)(b) of the Municipal
Systems Act 32 of 2000, which states that in the event of
inconsistency between a municipality’s Integrated Development Plan
(IDP) and national or provincial legislation, the latter prevails (para
65). It was therefore clear that the Ordinance would prevail in the
event of a conflict with an IDP (para 66). The approval of the local
authority was therefore conclusively not required for Aquila to
exercise its right under the MPRDA and it was unnecessary to join the
municipality as a party to the proceedings (para 67).
Issue 3: Is Aquila prevented from exercising its prospecting right until a
permit from the National Heritage Resources Agency is obtained
pertaining to graves and burial sites on the properties?
Judgment: It was common cause that graves and burial sites were
present on the properties and that these were “subsequently
discovered” (which begs the question why they were not discovered
during the course of preparing the EMP) (para 68). Section 36 of the
National Heritage Resources Act 25 of 1999 protects graves and
provides, in particular, that without a permit “no person may bring
onto or use at the burial ground or grave … any excavation equipment
or any equipment which assists in the detection or recovery of metals”
(s 36(3)(c), see para 70). While the relevant provisions of s 36 of the
National Heritage Act prohibited Aquila from undertaking certain
Outcome
activities at the burial ground (such as destroying, damaging, altering,
exhuming or removing graves) (para 71), such prohibitions were not a
bar upon access to the property and the prospecting right could still be
exercised outside of the location of the burial grounds or graves. (The
judge ignored the implications of s 36(3)(c)). As such there was no
merit in SA Steel’s reliance upon the National Heritage Resources Act
to refuse Aquila access (para 73).
The interdict was granted.