Samancor Chrome Limited v VDH Holdings (Pty) Ltd and Others

Samancor Chrome Limited (Samancor) and VDH Holdings (Pty) Ltd and Absolute Group Management (Pty) Ltd (the respondents) were rival mining firms seeking to exploit chrome resources on four properties in the Limpopo Province. Samancor was the registered owner of two portions of the properties and held prospecting rights from around 2003 under the Minerals Act, later recognised under the MPRDA. After prospecting activities, Samancor applied on 18 November 2011 for a mining right under section 22 of the MPRDA for underground and opencast mining operations. The Regional Manager accepted the application on 22 June 2012 and instructed Samancor to notify and consult with interested and affected parties. Samancor submitted its Environmental Impact Assessment report and Environmental Management Programme (EMPR) in December 2012. On 4 January 2014, the RM sent a letter requesting additional information about consultation. Samancor responded on 20 March 2014 with a public participation report. On 11 March 2016, the Director-General refused Samancor's application on the ground that it failed to provide proof of consultation with interested and affected parties. Samancor appealed to the Minister under section 96 of the MPRDA. On 31 October 2016, the Minister upheld the appeal and granted Samancor a mining right. The respondents launched a review application in January 2017, arguing that Samancor's consultation process was inadequate. The Gauteng High Court, Pretoria (De Vos J) set aside the Minister's decision on 16 November 2018, finding that Samancor had failed to notify and consult with affected communities as required by section 22(4)(b) of the MPRDA.

• Whether Samancor satisfied the requirement in section 22(4)(b) of the MPRDA to notify and consult with interested and affected parties
• What constitutes adequate notification and consultation under section 22(4)(b) of the MPRDA
• Whether a letter from the Regional Manager constituted a binding directive requiring compliance
• Whether consultation with the Kgoshi Kgolo of the Bapedi was legally required
• Whether the Interim Protection of Informal Land Rights Act 31 of 1996 (IPILRA) applied to the circumstances
• What standard of review applies to administrative decisions under the MPRDA and whether the Minister's decision was reviewable

The appeal was upheld with costs, including costs of two counsel. The order of the high court dated 16 November 2018 was set aside and substituted with an order dismissing the first and second respondents' review application with costs, including costs of two counsel. The cross-appeal by the first and second respondents was dismissed with costs, including costs of two counsel. The application to lead further evidence by Samancor was dismissed with costs, including costs of two counsel. The application to intervene by the Baroka Ba Nkwana Royal Family, the Baroka Ba Nkwana Community and the Jagdlust Engagement and Stakeholders Engagement Forum was dismissed with costs in favour of the first and second respondents, including costs of two counsel. The Minister was ordered to bear his own costs.

The binding legal principles established are: (1) Section 22(4)(b) of the MPRDA requires that interested and affected parties be afforded an adequate opportunity to be consulted; there is no obligation on an applicant to ensure that such parties actually exercise that right. (2) The adequacy of notification and consultation under section 22(4)(b) is primarily a determination for the decision-maker (in this case, the Minister on appeal), and a court will only interfere if the decision is one no reasonable decision-maker could have reached. (3) A letter from the Regional Manager issued under regulation 49(3) requesting additional information or clarification is not a binding directive under section 39(5) of the MPRDA that is subject to appeal or review; it is an administrative function requiring the applicant to address comments and incorporate them into the EMPR. (4) The definition of "interested and affected parties" requires a direct interest in or being affected by the proposed mining operation; it does not automatically include traditional leaders unless they meet this definition. (5) In assessing the adequacy of consultation, relevant considerations include the history of engagement with communities, the length of time the applicant has been involved with the area, investments made, and significantly, whether any affected persons have complained about lack of consultation. (6) The absence of complaints from affected communities is a significant factor weighing in favor of finding adequate consultation. (7) Business rivals who are not directly affected by the proposed mining operation do not qualify as "interested and affected parties" under the MPRDA.

The Court made several non-binding observations: (1) The Court noted that the Minister who made the impugned decision had an extraordinary duty to assist the court by explaining the reasoning behind his decision, particularly given his constitutional role as custodian of the nation's mineral resources. His failure to file papers in the court below or on appeal was described as "extraordinary." (2) The Court observed that after the grant of a mining right, affected communities remain protected from harm through section 54 of the MPRDA, which obliges rights-holders to engage with lawful occupiers. (3) The Court commented that while it may have been preferable for Samancor to have convened an additional consultation meeting beyond the one held on 5 December 2012, this alone was not sufficient reason to find non-compliance with section 22(4)(b). (4) The Court noted that Samancor could have put up more posters given the extent of the properties, though this did not invalidate the consultation process. (5) The Court observed that Samancor was entitled to assume that traditional authorities it consulted would inform and engage with their constituencies on the consequences of the proposed mining operation. (6) The Court made observations about the application to intervene, noting that the applicants had a purely financial interest arising from a Memorandum of Agreement with Samancor, which did not constitute a legal interest sufficient to justify intervention. (7) The Court commented that new evidence will be admitted on appeal only in exceptional circumstances, and evidence must be weighty and material to the outcome of the appeal.

This case provides important guidance on the interpretation and application of section 22(4)(b) of the MPRDA concerning the obligation to notify and consult with interested and affected parties in mining right applications. It clarifies that the obligation to consult requires providing adequate opportunity for consultation, not ensuring that all parties actually participate. The judgment emphasizes that the adequacy of consultation is primarily a matter for the decision-maker (the Minister), and courts will only interfere if the decision is one no reasonable decision-maker could have reached. The case also clarifies the administrative functions of the Regional Manager under regulation 49(3) and distinguishes these from binding directives under section 39(5). It demonstrates the importance of considering the particular circumstances of each case, including the history of engagement with communities, the absence of complaints from affected parties, and the commercial interests of rival applicants. The judgment also addresses procedural issues such as applications to lead further evidence on appeal and applications to intervene, reaffirming established principles in these areas.