Merafong City Local Municipality v AngloGold Ashanti Limited

AngloGold Ashanti Limited operated gold mines in Merafong’s jurisdiction and obtained water directly from Rand Water for industrial and domestic use. After municipalities became water services authorities under the Water Services Act 108 of 1997, Merafong required mines to apply for approval to continue receiving water from Rand Water. Merafong approved the arrangement but imposed significantly higher tariffs and surcharges than Rand Water’s tariffs. AngloGold appealed to the Minister under s 8(4) of the Act. The Minister, acting under s 8(9), overturned Merafong’s decision, ruling that Merafong could not levy surcharges on water used for industrial purposes and could levy surcharges only on domestic use, directing the parties to negotiate a reasonable tariff. Merafong regarded the Minister’s ruling as invalid and ignored it, continuing to levy higher tariffs without seeking judicial review. AngloGold approached the High Court to enforce the Minister’s ruling. The High Court upheld the ruling and Merafong appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel.

The case reaffirms a foundational principle of South African administrative law: administrative decisions, even if unlawful, remain valid and binding until set aside by a court. It strengthens the rule of law by confirming that organs of state must use proper review proceedings to challenge administrative action and may not simply ignore decisions they consider invalid. The judgment extends and applies the Oudekraal and Kirland principles in the context of intergovernmental relations and municipal powers.