In Zincede Ngokwakho Housing (Pty) Ltd v Matatiele Local Municipality, the Supreme Court of Appeal (SCA) considered whether a mining right holder requires a valid lease or ongoing landowner consent in order to access and exploit land.

Interpreting section 5(3) of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA), the Court reaffirmed that a mining right constitutes a limited real right that includes statutory powers of entry and use. However, the majority judgment makes clear that where parties have structured their relationship through a lease linked to the mining right, the legal status of that lease remains critical to determining how those rights are exercised.

BACKGROUND

The Matatiele Local Municipality (Municipality) owned Postershoek Quarry. In 2012, Zincede Nogkwakho Housing Proprietary Limtied (Zincede) was granted a mining right under the MPRDA for a period of 10 years.

Following earlier litigation, the Municipality and Zincede concluded a settlement agreement and lease in 2016. The lease was expressly linked to the duration of the mining right and any extension thereof.

In 2020, Zincede ceded its mining right to Stonewell Quarry Proprietary Limited (Stonewell) with Ministerial consent in terms of section 11 of the MPRDA. Stonewell continued mining operations and later sought to renew the lease. The Municipality refused ratification, resolved to sell the property and ultimately sought eviction.

The High Court held that, in the absence of a valid lease, Stonewell had no right to remain on the property and granted eviction.

SECTION 5(3): STATUTORY ACCESS AS A LIMITED REAL RIGHT

Section 5(3) of the MPRDA permits the holder of a mining right to, inter alia:

• Enter the land to which the right relates;
• bring employees, plant and machinery onto the land; and
• conduct mining operations and remove minerals.

The SCA emphasised that a mining right is a limited real right in respect of the minerals and the land. Section 5(3)(a), in clear terms, authorises entry onto the land.

Referring to Maledu v Itereleng Bakgatla Mineral Resources, the Court reiterated that:

• The landowner must allow access reasonably necessary for the effective exercise of the mining right; and

• The mining right holder must exercise its rights civiliter modo: reasonably and with minimal interference.

Ownership and mining rights therefore co-exist.

IS A LEASE A PREREQUISITE?

The SCA rejected the High Court’s conclusion that the expiry of the lease extinguished Stonewell’s right of occupation.

First, the intended sale of the property was legally irrelevant. Even if sold, the mining right would survive and bind a purchaser.

Second, while section 5(3) of the MPRDA confers a limited real right of entry and use in respect of the land to which the mining right relates, the Court emphasised that the lease in this matter was not irrelevant. As Makgoka ADP noted, the lease was “critical” as the basis for the parties’ cooperation. The dispute therefore required the Court first to determine whether the lease rights had validly passed to Stonewell. Once it concluded that the mining right had been lawfully ceded with Ministerial consent and that the lease rights were not delectus personae and had followed the mining right, the Municipality could not rely on the lease’s alleged termination to defeat Stonewell’s occupation.

The mining right had been granted by statute and remained in force pending determination of the renewal application in terms of section 24(5). In those circumstances, the eviction order could not stand.

CESSION OF THE MINING RIGHT

The Municipality argued that Zincede could not cede the mining right without its consent and that the lease terminated upon cession. The SCA rejected this.

Section 11 of the MPRDA requires only Ministerial consent for the cession of a mining right. That consent was obtained. There is no statutory requirement for landowner consent.

The SCA further held that rights under the lease were tacitly ceded to Stonewell. The lease did not prohibit cession and was not delectus personae (inherently personal). The High Court therefore misdirected itself in treating the cession as a contractual variation requiring municipal approval.

PRACTICAL SIGNIFICANCE

The judgment confirms that:

• A mining right under the MPRDA confers a limited real right, including statutory access to land.

• Ongoing landowner consent is not a prerequisite for entry where a valid mining right exists.

• Ministerial consent is sufficient for cession under section 11.

• A sale of land does not extinguish an existing mining right.

Section 5(3) must be interpreted in harmony with the objects of the MPRDA in promoting regulated mineral development balanced with landowner protections.

HOW BISHOP FRASER ATTORNEYS CAN ASSIST

Disputes between mining right holders and landowners often arise at the intersection of statutory rights, contractual arrangements and municipal regulation.

Bishop Fraser Attorneys advises mining companies, municipalities and landowners on:

• Mining right transfers and section 11 compliance;

• Surface access disputes and section 54 processes;

• Drafting and interpretation of lease and surface use agreements;

• Strategic litigation and administrative law challenges under the MPRDA.

Early, structured legal engagement can prevent costly disputes and ensure that statutory rights and property interests remain properly aligned.