Introduction

In a recent judgment (TC Smelters (Pty) Ltd and Another v Minister: Department of Mineral Resources and Energy and Others (006097/2022) [2024] ZAGPPHC 493 (23 May 2024)), the North Gauteng High Court dismissed the application by TC Smelters (Pty) Limited (“TC Smelters”) and Samancor Chrome Limited (“Samancor”) in which they sought a declaratory order to exclude TC Smelters’ smelting operations from the application of the Mine Health and Safety Act, No. 29 of 1996 (“MHSA”).

The judgment confirms that the MHSA applies to the smelting operations of TC Smelters, situated on the Buffelsfontein farm, which is subject to a mining right held by Samancor.

Definition of a “mine“

Central to this case is the definition of the word “mine” as set out in section 102 of the MHSA. In terms of section 102 of the MHSA, the term “mine” includes, amongst others, a “…place where a mineral deposit is being exploited, including the mining area…“. The term “mining area” is defined as “a prospecting area, mining area, retention area, exploration area and production area as defined in section 1… of the Mineral and Petroleum Resources Development Act, No. 28 of 2002 [(“MPRDA”)].”

The term “mining area” is defined in the MPRDA as including and/or referring to, amongst others, “a mining right or a mining permit…means the area on which the extraction of any mineral has been authorised and for which that right or permit is granted…any land or surface adjacent or non-adjacent to the area…but upon which related or incidental operations are being undertaken…”

Background of the Case

TC Smelters (First Applicant) and Samancor (Second Applicant) applied for a declaratory order declaring that the smelting operations did not constitute a “mine” as defined in section 102 of the MHSA. Consequently, they argued that the provisions of the MHSA should not apply to the smelting operations, which should instead be governed by the Occupational Health and Safety Act, No. 85 of 1993 (“OHSA”).

Applicants’ Argument

In their argument, the applicants highlighted that there was an unbundling process that occurred involving the operations of International Ferro Metals of South Africa (“IFMSA”), the previous mining right holder, which i) ceded to Samancor its mining right for specific minerals, and ii) sold to TC Smelters its smelting operation. This unbundling formed the crux of the applicants’ case, as they sought to establish the nature of TC Smelters’ operations, the processes relevant thereto, and the applicable regulatory framework.

The Applicants explained that the plant layout and location are designed to accept material directly from the mine and supply the final ore directly to the smelter with minimum handling of the materials to reduce costs and generation of fines/dust. Chrome ores consisting of lumps are discharged directly from the ore beneficiation plant to the smelter raw material storage area.

Respondents’ Argument

Despite the procedural point of non-joinder of the Ministers of Environmental Affairs and Agriculture raised by the Respondents, they also argued that:

• the Respondents have their principal places of business and registered addresses situated on the same premises;
• the Respondents share the same resources and the activities of both are conducted on various portions of the Buffelsfontein farm, in respect of which the Second Respondent holds a mining right;
• the activities of IFMSA were split up / separated resulting in the Second Applicant acquiring the mining right and proceeding with mining activities, and the First Applicant acquiring the smelting operations (this was essentially part of the terms of a separation agreement entered into between IFMSA, TC Smelters and Samancor, on or about 16 March 2016 (“separation agreement”));
• irrespective of the terms and conditions of the separation agreement, the effect of the separation agreement is not of such a nature that it achieved a separation with the effect that the provisions of the MHSA do not apply to the First Applicant’s smelting operations, for the following reasons which relate to the terms of separation agreement:
  • IFMSA owned and operated a pelletising plant and sinter plant, and furnace operations in respect of its Lesedi mine (which are essentially the smelting operations);
  • there was a sale of the mining right and beneficiation plant;
  • for the mining entity to operate the mine, it will require use and access to certain of the business assets which the First Applicant purchased. In addition, the First Applicant would be able to operate the plant but would require use and access to certain of the mining assets;
  • the separation agreement envisages a joint operation and for that purpose, a joint operating committee was established;
  • the First Applicant would nominate a health and safety representative with the appropriate experience as designated by the Chief Executive Officer appointed in terms of section 2A(3) of the MHSA with health and safety responsibility for the plant and its operations. This was a clear indication that the parties accepted that the operations of the First Applicant would be subject to the MHSA; and
  • a particular appointment in terms of the MHSA shall terminate on a date that the relevant authority grants approval for the exemption of the plant from the ambit of the MHSA in accordance with section 79 of the MHSA (“section 79 exemption”).

Court’s decision

The court held that the Applicants’ application for a declarator must fail and the application is dismissed with costs for the following reasons:

• the Applicants started the consultation process with the relevant regulators, including the Department of Employment and Labour (“DOEL”) and the relevant trade union in terms of section 79 of the MHSA;
• the provisions of the separation agreement record that the Applicants undertook to set in motion the process of obtaining a section 79 exemption;
• the application to court should have been directed to the Department of Mineral Resources and Energy (“DMRE”) because IFMSA was already regulated under the MHSA;
• the Applicants’ engagement with the DOEL was misplaced or at best premature;
• since the Applicants had already started consultations with the trade union, this would have been in keeping with the prerequisites of a section 79 application. It would have been expected that in keeping with the separation agreement, the next step would be to lodge an application with the DMRE;
• seeking a declarator in the terms of this court application is akin to applying for this court to review the decision of the Respondents without in fact making such an application. The legislature has heeded the Constitutional imperative to enact legislation to ensure that everyone has the right to administrative action that is lawful, reasonable and procedurally fair by the enactment of the Promotion of Administrative Justice Act, No. 3 of 2000 (“PAJA”). If the Applicants are unhappy with any administrative action or decision, the manner in which they could have sought any declarator is by way of a review in terms of the provisions of PAJA within the timeframe stipulated therein.

Conclusion

In this case, the court confirmed that the smelting operations located within this particular mining right area are subject to the application of the MHSA, based on the specific facts presented. This determination highlights the importance of location and operational context in the application of health and safety legislation within the mining sector.