Following a costly five-year battle to block prospecting on its land, state-owned diamond miner Alexkor, along with its joint venture partner, the Richtersveld Mining Company (RMC), now faces a R500m damages claim.
The Sunday Times has learnt that in 2025 the prospecting mining company Vast Mineral Sands (VMS) issued a legal letter demanding R520m in damages.
The claim stems from delays caused by Alexkor’s refusal to grant VMS access to prospect on just over 82,000ha of sand dunes in the Richtersveld region of the Northern Cape. VMS was awarded prospecting rights over the land in 2018.
“Alexkor’s conduct resulted in, inter alia, financial partners terminating finance agreements and the loss of investment opportunities, pursuant to the unlawful refusal to allow our client access to enforce its prospecting right,” VMS says in a letter of demand sent through its legal representative, Fasken Attorneys.
The letter further alleges that Alexkor’s contractors unlawfully occupied VMS’s building in Rietfontein South.
“Alexkor’s frivolous and/or unmeritorious conduct has caused our client significant financial damage and reputational risk,” the letter states, adding that VMS had also incurred unnecessary legal costs.
According to Fasken Attorneys, the damages — verified by an actuary — are broken down as follows:
- Waste-related damages: R72.9m;
- Mining-related damages: R428.8m;
- Loss of investment opportunities: R13m;
- Reasonable payment for Alexkor’s use of the Rietfontein building: R540,000;
- Legal costs incurred by VMS: R4.5m; and
- Directors’ travel costs for court proceedings and section 54 meetings: R35,172.
VMS had initially claimed damages amounting to R612m, but this was reduced to R520m following engagements with Alexkor.
Registered in 2016, VMS was granted a prospecting right to mine for heavy minerals — including leucoxene, monazite, rutile and zirconium ore — on land jointly owned by Alexkor, RMC and the Richtersveld Sida !Hub Communal Property Association (CPA), which represents local communities.
These minerals are considered critical by major economies such as the US, India and Australia because of their importance in high-tech manufacturing, defence and green energy. The prospecting right was initially granted for five years from 2019 and was renewed in November 2023 until November 2026.
While VMS initially accessed the land and started operations, Alexkor began denying access in 2019, asserting that the prospecting right, environmental authorisation and water-use licences were obtained without due process. This led to protracted negotiations and, eventually, a successful urgent application by VMS for access to the property in the Kimberley high court in August 2023.
Before approaching the court, the parties had also participated in two dispute resolution processes under section 54 of the Mineral and Petroleum Resources Development Act (MPRDA), facilitated by the then department of mineral resources & energy. Both processes found in VMS’s favour, but Alexkor continued to bar access.
Alexkor appealed against the high court ruling, unsuccessfully, and ultimately petitioned the Constitutional Court in January 2025. The petition was dismissed due to lack of reasonable prospects of success.
Alexkor appealed against the high court ruling, unsuccessfully, and ultimately petitioned the Constitutional Court in January 2025. The petition was dismissed due to lack of reasonable prospects of success.
The litigation appears to have created a rift within the joint venture. The CPA revealed that it warned Alexkor against pursuing the court action.
“They ignored the advice and persisted with the litigation until the highest court in the country confirmed the views of the community,” the CPA said. “The litigation was not justified.”
The CPA also pointed out that another company holding similar mineral sands rights had not received the same treatment from Alexkor and was allowed to operate. “The community never understood the reasons for Alexkor’s actions,” it said.
The CPA said that Alexkor has been ordered to pay costs on several occasions. “This is concerning as most of the cases they are embroiled in are lost with costs orders against them.”
Alexkor board chair Dineo Peta, who has held the position since 2024, said that following last year’s damages demand, a roundtable discussion was held between the parties and the matter was referred to parliament for a way forward.
She said Alexkor had been obliged to pursue all legal channels and had acted on legal advice. “The denial of access to VMS would have been in line with board decisions ... taken at the time,” Peta said.
She declined to detail the reasons for the legal challenges, saying Alexkor would only do so once a resolution had been reached and after parliament and the minister of mineral & petroleum resources had made recommendations.
In a statement this week, VMS said the courts had “expressly confirmed” that it suffered “irreparable harm as a result of Alexkor’s unlawful conduct”, a finding upheld in subsequent judgments.
“Mineral rights in South Africa are governed by the MPRDA, not by the discretion of any individual or entity,” the company said. “Alexkor disregarded the regulator’s decision and litigated through multiple courts, ultimately losing six cases, including in the Constitutional Court, with costs.”
VMS said this amounted to a waste of public funds and had stalled economic development in a region with high unemployment.
Community representatives echoed this concern, saying the legal battle — which stretched over nearly 30 months — had also deprived locals of job opportunities.
“There are very few work opportunities in the Richtersveld,” the CPA said. “By now, VMS could have been operational and created work for the community.
The CPA said VMS had committed to employing local residents and that the community was in the process of negotiating a shareholding in the company.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.