Mineral Resources and Energy clarifies position on ongoing dispute between Assmang and PP Gemstones

The Department of Mineral Resources and Energy (DMRE) has received several media enquiries regarding alleged illegal mining related to a dispute between two entities that are licensed to mine different minerals in a common area. At the centre of the row between these two companies is the issue of the coexistence of different minerals on the same portion of land and the extent to which companies that have been licensed to mine different minerals in the same area are able to find ways to work together.

The coexistence of different minerals on the same land is as a result of various geological processes. It is also common for the mineral to occur at different seams or levels within the same deposit due to geological processes. DMRE Director - General Jacob Mbele says this phenomenon is common in many mineral-rich regions where multiple mineralisation events have occurred over geological time. "The Bushveld Complex for example, contains platinum-group metals (PGMs), chrome, and vanadium, all occurring in a common area," he said.

Mbele said the Mineral and Petroleum Resources Development Act (MPRDA) which governs the mineral rights in South Africa, including the granting of mining rights and permits, makes provision for the licensing of different minerals to different parties or entities on the same land. As a result of this, mining of different minerals on the same land by different entities or through an agreement between different entities has been a feature of the South African mining landscape for a while now.

Several companies licensed under this arrangement have managed to conclude agreements and have found ways to work together in a mutually beneficial way to mine and sell these minerals. Others however, continued to grapple with the complexities that sometimes arise in such arrangements, including amongst others, operational practicalities, safety concerns, and commercial arrangements.

To the extent that it is legally and practically possible, and where it is necessary, the Department facilitates and mediates engagements between the right holders. However, this intervention is sometimes limited by legal processes such as appeals to the Department in line with the provisions of the MPRDA, or litigation between the parties, or one of the parties and the Department.

Mbele says the DMRE remains committed to ensuring sustainable mining and equitable access to the country's natural resources by all, and allowing for the licensing of different minerals in a common area is one such way to do this. Proposed amendments to the MPRDA due to be released for public comments soon after they have been presented to Cabinet will endeavour to provide further safeguards for those involved in the mining of mixed minerals. The public, including investors and potential investors, would therefore have an opportunity to guide and influence the ultimate solution in this regard.

Claims of Illegal Mining of Sugilite
The DMRE said the recently reported case of PP Gemstones and Assmang (Black Rock) had been one such complex case where the license holders had failed to reach agreement on how to work together. The Department however, refutes all allegations made by PP Gemstones that it is turning a blind eye to illegal mining of sugilite by Black Rock mine and that it has been ignoring correspondence from their lawyers. Below are some of the facts pertaining to this case;

Salient Facts

• Assmang operates the Black Rock mine on various farms in the district of Kuruman, Northern Cape Province. In terms of its issued and registered converted mining right, it is entitled to mine for "manganese ores".
• During June 2020, the Regional Manager: Northern Cape Region accepted three mining permit applications lodged by PP Gemstones and its related entities. These applications were for gemstones (excluding diamonds) on a part of portion 9 (remaining extent) of the Farm N'Chwaning 267, magisterial district of Kuruman, Northern Cape.
• When Assmang became aware of these permit applications around May 2021, it lodged internal appeals in terms of the Mineral and Petroleum Resources Development Act 28 of 2002 ("MPRDA") against the acceptance thereof. Assmang alleges that the contested portion form part of the Black Rock mining area covered by its converted mining right. Moreover, it contends that the acceptance of mining permits for gemstones is legally incompetent, as it already holds the rights to gemstones, which is by definition included as part of manganese ore. These appeals were subsequently dismissed by the Director-General, primarily on the basis that the Assmang converted mining right entitles it to mine for manganese and not for gemstones. The appeal decisions of the Director-General are currently on appeal to the Minister and therefore pending. Assmang has also lodged internal appeals against the decisions of the Regional Manager to grant the three mining permits to PP Gemstone and its associated entities. The appeals are currently pending adjudication by the Department.
• In November 2023 Assmang contested the decisions of the Regional Manager: Northern Cape by instituting judicial review applications against his approval of the first of three environmental authorisations in respect of the three mining permit applications on the aforesaid farm. The Gauteng High Court (Pretoria) reviewed and set aside the environmental authorisations, meaning that PP Gemstones could not commence with mining as per its permit.
• In November 2024, the Department's application for leave to appeal against the review of the environmental authorisations was dismissed by the Gauteng High Court. The State Attorney's Office thereafter applied for leave and deposed to and filed an appeal directly to the Supreme Court of appeal ("SCA") on 11 December 2024. This application is yet to be decided on. The Department is still weighing its prospects of success on the matter which will determine whether to proceed with the appeal or not.
• In the meantime during the latter part of 2024, Mr Matebesi on several occasions requested the Director-General to issue letters of recommendation to the International Trade Administration Commission of South Africa ("ITAC") for the issuing of export permits to PP Gemstone and its associated entities. The Director-General in writing advised that he was unable to do so, because of the review and setting aside of the environmental authorisations by the Gauteng High Court. However, as will be illustrated below, the Director-General was, and still is, unable to issue the requested letters.

On 23 December 2024, PP Gemstones applied for interdictory relief against Assmang, Black Rock Mine, SAPS and SARS. Important for present purposes, PP Gemstones, amongst others, sought the following orders:

• Assmang and Black Rock are interdicted from disposing of the sugilite and any other gemstones mined by Black Rock from Farm N'chwaning 267;
• Assmang and Black Rock be prohibited from selling 'sugilite' gemstones seized and kept in custody by SARS at OR Tambo International Airport; and
• PP Gemstone be declared the lawful owner of the gemstones in question; and
• SARS release six hundred and nineteen kilograms (619kg) of 'sugilite' gemstones it seized from its stores into possession of PP Gemstones.

On 27 January 2025, the South Gauteng High Court dismissed the application for lack of urgency. This meant that the consignment in respect of which PP Gemstones had requested letters of recommendation from the Director-General for, remained in the custody of SARS and was subject to investigation. Under these circumstances, the Director-General is not competent to issue such letters of recommendation.

The Department also refuses to be coerced into making decisions prematurely, or even illegally for any reason even as we remain committed within the confines of the law to enabling investment in the sector.

About Sugilite

• Sugilite is a rare, purple-coloured gemstone that primarily occurs as a massive aggregate within manganese-rich deposits. It is a cyclosilicate mineral with a complex chemical composition, and its striking purple colour is often attributed to the presence of manganese oxide within the stone.
• High-quality sugilite is considered precious due to its rarity and vibrant colour and is usually cut into cabochons for jewellery. It is highly valued in Asia and is also believed to have metaphysical and healing properties.

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