Exploration rights on two Limpopo Province farms held by Genorah Resources have been overturned by South Africa's constitutional court.

The mining prospecting rights were overturned on Monday (1st December) after the court ruled that Genorah Resources, which is a majority shareholder of Nkwe Platinum, had conducted a flawed consultation process.

According to the court, Genorah Resources did not engage sufficiently with the Bengwenyama-ye-Maswasi community, which owned the land the company wished to prospect.

As this is a legal requirement in South Africa, the court withdrew Genorah Resources' prospecting rights for the two farms which sit on the eastern limb of the Bushveld Complex.

Even so, Nkwe has not given up hope of keeping hold of its 64 per cent interest in the farms.

"Importantly, the court issued no directions to the Department for Mineral Resources (DMR) and it did not direct the DMR to award the prospecting right to an alternative applicant," the Australian-listed company said in a statement released to the Stock Exchange.

The statement added that talks had been initiated with the local communities and South Africa's DMR.

However, Business Day believes the ruling could have "profound implications for miners facing challenges from local communities".

"What this means for other mining companies and for the department is that they must do everything conceivably possible to comply with the act. Otherwise rights could be set aside," Andrew Mitchell, a senior partner at law firm Bell Dewar, told the news provider.

Sources:



New hurdle for miners as court pulls rights (01/12/10)



Nkwe Platinum's legal woes mount (01/12/10)



S.Africa court backs villagers against mining firm (01/12/10)



DJ Nkwe Platinum: South Africa Court Pulls Prospecting Rights (01/12/10)



South African Court Withdraws Mine's Prospecting Rights, Business Day Says (01/12/10)



Genorah prospecting rights set aside (01/12/10)

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