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Ezulwini Mining Company (Pty) Ltd v Minister of Mineral Resources and Energy and Others (289/2021) [2023] ZASCA 80 (30 May 2023)

30 May 2023

The judgment of the Supreme Court of Appeal is available here.

  • Neutral citation: Ezulwini Mining Company (Pty) Ltd v Minister of Mineral Resources and Energy and Others (289/2021) [2023] ZASCA 80 (30 May 2023)
  • Case Number: 289/2021
  • Coram: Petse AP, Molemela and Makgoka JJA and Basson and Goosen AJJA
  • Date heard: 24 November 2022
  • Date delivered: 30 May 2023
  • Order: Paragraph 1 of the order of the High Court (Gauteng Division, Pretoria) is set aside and replaced with the following: It is declared that Ezulwini Mining Company (Pty) Ltd remains responsible for the pumping and treatment of extraneous water from the underground workings of Ezulwini Mine until the Minister of Mineral Resources and Energy has issued to it, a closure certificate in terms of s 43 of the Mineral and Petroleum Resources Development Act 28 of 2002. Otherwise, the appeal is dismissed with costs, including the costs of two counsel.

Summary:

This matter involves the question of whether a mine (Ezulwini) is obliged in law to continue pumping extraneous water from its underground mining works despite having stopped underground mining. And if so, when does that obligation cease?

The Supreme Court of Appeal sought to answer this answer through interpretations of section 43 of the MPRDA and Section 24N of NEMA.

In a unanimous judgment, the Supreme Court of Appeal held that the mine was legally obliged to continue to pump and treat extraneous water from its underground mining areas until authorised to cease pumping in accordance with the procedures for mine closure.

Background

Ezulwini holds a mining permit and operates a mine in Gauteng. The Ezulwini mine has been worked since 1961 and the current owners bought it in 2014. GFI (a respondent in the matter) owns a mine adjacent to Ezulwini which is operated by Gold Fields. The mines are interconnected underground, although the connection has been ‘plugged’ or sealed.

Ezulwini has, since it took over the mine, continued to pump extraneous groundwater from its underground mining areas. This water is pumped to the surface where it is treated before being discharged into natural water courses on the surface according to the terms of a water use licence (WUL) and an Environmental Management Programme (EMPr).

In 2016 Ezulwini stopped mining underground but continued operations in its surface area. In 2017, it applied for environmental authorisation under NEMA and an amendment to its WUL to stop pumping the underground water. These processes have not been completed.

However, in 2019, Ezulwini brought an application in the High Court for a declaration allowing it to stop pumping extraneous water. It argued that neither an environmental authorisation, nor an amendment to the WUL was required for it to cease pumping.

Gold Fields opposed the application and argued that Ezulwini remained responsible for pumping and treating the underground water until a closure certificate was issued in terms of section 43 of the MPRDA. Gold Fields was concerned that if Ezulwini ceased pumping, the seal between their mines could fail and Gold Fields’ mine could be flooded.

The High Court held that Ezulwini remained responsible for the pumping and treatment of the water until at least when the Minister has issued a closure certificate or such longer period as contemplated in section 24R of NEMA. Costs were awarded in favour of Gold Fields.

In its judgment, the SCA set out the environmental legal framework and structure of NEMA including the EIA regime and the requirements for environmental management programmes (EMPr). It then describes the MPRDA in relation to environmental management, the One Environmental System and the requirements for mine closure. Having considered the legal context, the court held that the legislative purpose of these laws is to ensure that environmental impacts, whether positive or negative, are identified, assessed, and managed. It then turned to the interpretation of section 43 of the MPRDA and section 24N of NEMA.

Ezulwini had argued that its WUL conferred upon it a right of use (to dewater the underground mining area) but this did not oblige it to exercise such right. The Minister argued that the duty to pump extraneous water arose from section 24(N)(7)(f) of NEMA and not section 43(1) of the MPRDA. Ezulwini had argued that it was ‘liable’ under section 43 of the MPRDA which, when read with section 24R of NEMA, imposed financial obligations upon mine closure, but no obligation to pump and treat water.

The court considered the word ‘responsible’ as used in both 43(1) of the MPRDA and 24N(7)(f) of NEMA and held that its ordinary meaning imposed an obligation to do something (i.e a legal duty to conduct the activity of pumping and treating extraneous water). The court also discussed the subtle differences between the broader term ‘responsibility’ and narrower term ‘liability.’

The court held that there would be significant impact on the environment should Ezulwini cease pumping water and that this required full and proper assessment before it occurs. It further held that section 43(5) of the MPRDA cannot be given effect to if mines cease pumping prior to closure, because the Chief Inspector would not be able to confirm if conditions relating to pumping and treatment of extraneous water have been addressed, as required by the section. This absurdity added further weight against Ezulwini’s interpretation of the law. The court also indicated that NEMA’s precautionary principle motivated against Ezulwini’s interpretation.

The court ruled that Ezulwini was obliged to continue to pump and treat extraneous water from its underground mining areas until authorised to cease pumping in accordance with the procedures for mine closure.

On the ancillary question of when this obligation ends, the court was reluctant to decide on the ambit of Section 24R of NEMA because in the matter at hand, Ezulwini had not reached the mine closure phase and therefore and determination of post-closure obligations was deemed premature.

Note: The court was not asked to rule on the question of whether Ezulwini’s EMPr should be considered an environmental authorisation. In a paragraph describing Counsel for the Minister’s arguments the judgment provides “Its mining operations are authorised in terms of an approved EMP. This constitutes an environmental authorisation.” but it is not clear if this is a summary of Counsel’s argument or a finding of the court. Either way, this sentence cannot be considered to fall within the ratio of the judgment.