Louisvale Irrigation Board and Kolskoot Beleggings 116 CC v The Minister of Minerals & Energy and Others

The first applicant, Louisvale Irrigation Board (LIB), was the registered owner of the Farm Jannel se Pan Nr 39 in the Administrative District of Kenhardt. The second applicant, Kolskoot Beleggings 116 CC (Kolskoot CC), was the lawful occupier of the property by virtue of a mining lease agreement with LIB, entered into before the disputed permits were granted. The 1st and/or 3rd respondents (the Minister of Minerals and Energy and the Regional Manager, Mineral Regulation: Northern Cape Region) granted three mining permits to the 4th, 5th and 6th respondents (Sizwe Plant Hire CC, Jacobus Wouter van Zyl, and Yolanda Oberholster) to mine sand on portions of the property measuring 1.5 hectares each. The permits were granted without proper consultation with Kolskoot CC as the lawful occupier. The notification letters sent to LIB were inadequate and did not specify mining locations, access routes, or measures to avoid interference with existing mining activities. Kolskoot CC was not notified or consulted at all.

• Whether section 27(5)(b) of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) required consultation with both the landowner and the lawful occupier before granting mining permits
• Whether the notification letters sent to LIB constituted adequate notification and consultation as required by the MPRDA
• What constitutes proper 'consultation' under the MPRDA
• Whether the failure to notify and consult with Kolskoot CC as lawful occupier rendered the granting of the mining permits reviewable
• Whether punitive costs on an attorney and client scale were appropriate

1. The decision to grant the three mining permits (045/2009, 044/2009, and 043/2009) was reviewed and set aside. 2. The three mining permits granted to the 4th, 5th and 6th respondents were cancelled. 3. The 1st, 2nd and 3rd respondents (the department) were ordered to pay costs on an attorney and client scale. 4. The 4th, 5th and 6th respondents (the permit holders) were ordered to pay costs on a party and party scale. 5. All respondents were ordered to pay costs jointly and severally, the one paying the others to be absolved pro tanto.

Under section 27(5)(b) of the Mineral and Petroleum Resources Development Act 28 of 2002, the conjunctive 'and' requires that both the landowner and the lawful occupier (and any other affected parties) must be notified in writing and consulted with before a mining permit is granted. Consultation is more than mere notification; it requires a reciprocal communication of ideas, engaging in good faith to attempt to reach accommodation regarding the impact of the proposed mining operation on existing land use. Written notification that is not followed by proper consultation falls short of the statutory requirements. Failure to comply with these consultation requirements renders the administrative decision to grant mining permits reviewable and susceptible to being set aside. The duty to identify and consult with lawful occupiers rests on both the applicants for mining permits and the department, and a landowner's alleged failure to disclose the existence of a lawful occupier does not excuse non-compliance with the statutory consultation requirements.

The court observed that the applicants for mining permits and the department had three opportunities to rectify the consultation failure: (1) when the mining lease agreement was produced before the Regional Mining Development & Environment Committee (Remdec) following objections; (2) during the appeal process to the Minister under section 96 of the MPRDA; and (3) when the review proceedings were launched. The court also noted, citing Bato Star Fishing, that while it is not fatal for a litigant to fail to specify precisely which statutory provisions are relied upon in review proceedings, it is desirable for litigants seeking to review administrative action to identify clearly both the facts upon which they base their cause of action and the legal basis thereof. The court rejected various technical objections by the department (relating to separation of powers, joinder of parties, and failure to identify PAJA grounds) as lacking merit and not encumbering the substantive issues.

This case is significant in South African mining and administrative law for establishing strict requirements for consultation under the MPRDA. It clarifies that: (1) consultation is distinct from and more demanding than mere notification; (2) the use of 'and' in section 27(5)(b) requires consultation with both landowners and lawful occupiers separately; (3) consultation must be meaningful, in good faith, and aimed at reaching accommodation regarding the impact on existing land use; (4) it must provide sufficient information for affected parties to make informed decisions; and (5) failure to comply renders the administrative decision reviewable. The case reinforces the principles established in Bengwenyama Minerals regarding the seriousness of consultation obligations in mining law, particularly given the grave invasion of land rights that mining operations represent. It also demonstrates courts' willingness to award punitive costs where government departments fail to comply with clear legal precedent.