OVERLAPPING MINING RIGHTS CREATE COMMERCIAL UNCERTAINTY IN SA
By Mark Thomas, legal director, Risk Advisory Services at Pinsent Masons South Africa and Margo-Ann Werner, legal director, Environmental and Energy at Pinsent Masons South Africa
INSIGHT •
South Africa ' s mineral rights system was built on the practical idea that different minerals can be extracted from the same land by different operators if there is reasonable co-operation between the operators.
The logic holds in many instances, as silica sand operators, for example, often work the same properties as other mineral right holders with little friction. Yet the system becomes far less predictable when the rights granted cannot be exercised optimally or at the same time.
The mining laws offer no clear rule of priority and this uncertainty creates operational delays, litigation risk and, increasingly, exposure to environmental liabilities that companies did not anticipate.
A dispute between an iron ore miner and a newcomer seeking to prospect for manganese illustrates how fragile the framework can be when geology forces one party to interfere with the operations of the other. In the Northern Cape region, manganese lies beneath the iron ore body, which means any meaningful prospecting for manganese can only happen after the iron ore is removed, or mining through the iron ore and extracting the manganese, which is a contaminant of iron ore.
In this case, the two parties could not reach an agreement on how to exercise their rights concurrently.
Despite objections by the iron ore miner, the prospecting right for manganese was granted and the matter proceeded to the High Court. The iron ore miner’ s challenge succeeded because the court found that the Department of Mineral and Petroleum Resources and the minister had not fully considered the geological constraints involved.
Before the matter could be reconsidered by the minister, the aspiring manganese miner went into liquidation, which terminated the prospecting right, and the right automatically returned to the State.
The matter revealed a material weakness in the concept of coexisting mining: final liquidation removes a mining company ' s most important asset – its mineral right – and leaves operators, liquidators and creditors without the opportunity to transfer the right and potentially realise some value.
One of the quiet but critical flaws in the system is that the regulatory process does not prevent overlapping grants and the regional manager accepts conflicting applications – often, without assessing operational compatibility, leaving the companies to work out coexistence, a solution that sounds workable in theory but often fails in practice.
The most important moment and one that boards often overlook, is the thirty-day comment window from the date of the notice issued by the regional manager of acceptance of an application for a mineral right. Such notice is usually affixed to the notice board at the regional office, making it easy to overlook and necessary to consistently check in person whether any new notices have been made. Once that period closes, the opportunity to object or influence the process narrows sharply.
Environmental authorisation, as a prerequisite to the grant of mineral rights, comes to the fore.
www. africanmining. co. za African Mining Publication African Mining African Mining • June 2026 • 37