South Africa's Power Utility Eskom Tried To Block A Gold Mine From Going Solar But Lost In Court

(MENAFN- The Conversation) South Africa’s national energy policy says: build more renewable power facilities and build them fast.

But getting the players in the energy space to do that is proving to be difficult. Around 74% of the country’s electricity is generated by coal-fired power stations owned by the state-owned electricity provider, Eskom. This makes South Africa a highly coal-dependent economy.

** Read more: South Africa’s move to green energy was slowed down by government to protect coal mining**

Reforms are underway to unbundle Eskom and introduce more competition. But for years, it has operated as a near-monopoly, with coal at its centre.

A recent court case illustrates how difficult it is to break Eskom’s monopoly, even for huge corporations that want to switch to solar.

In 2023, South Africa’s biggest gold producer, Sibanye Stillwater, wanted to build a massive solar photovoltaic plant to power one of its mines. The 50MW plant (the equivalent of powering 40,000 homes) would have substantially reduced the mine’s reliance on the national electricity grid.

This would have freed up electricity for homes, hospitals, schools and other businesses to use and would have reduced the amount of greenhouse gas emissions being pumped into the atmosphere.

** Read more: South Africa’s power grid is under pressure: the how and the why**

But the mine’s plan met strong resistance from the state utility. For over a year, Eskom refused to allow the mine’s solar power lines to cross its servitude (run cables across the same land that Eskom’s power lines run across). Eskom had granted all other approvals for the project had been granted.

The mining company took the case to court. It argued that Eskom’s refusal was unlawful, based on errors of law and improper motives, and that Eskom hadn’t proved there would be technical or safety problems if the solar power lines crossed the servitude.

In February 2026, the Gauteng Division of the High Court set aside Eskom’s decision. The mine can finally build its own solar plant and go off grid.

** Read more: South Africa’s shift from coal to renewables: how it’s going**

I am a specialist in environmental and climate change law who researches how international and domestic law can be used to advance climate justice in South Africa and across Africa. My view is that this judgment is important for several reasons. First, for Sibanye Stillwater mine and its related companies, because it allows their solar project to go ahead after Eskom’s refusal had effectively blocked a major private investment. It also matters for other mining houses and large companies that want to build their own renewable energy plants.

The court ruled that Eskom cannot use red tape to block renewable energy projects that follow the law. This gives energy investors more certainty. But it also exposes how resistance to solar energy from powerful institutions like Eskom can slow South Africa’s energy transition, and how courts can keep the transition on track.

How Eskom tried to derail the solar project

Sibanye mine’s planned solar facility was designed as a“behind-the-meter” project. This means it would generate electricity mainly for its own use rather than to sell back to the national grid.

To connect the solar plant to its own electricity substation, the company needed Eskom’s wayleave (administrative permission to build within Eskom’s infrastructure corridor) to build a 6km power line crossing Eskom’s servitude. (Anyone who wants to run cables, pipelines or other infrastructure across land where Eskom’s power lines are located must obtain this permission, to ensure safety and protect the network.)

** Read more: Should governments pay businesses for climate disasters? Researchers unpack huge lawsuits in South Africa**

The mine’s planned solar facility had already secured all necessary regulatory approvals from government and had complied with technical and grid code requirements. It was also designated as a Strategic Integrated Project under the Infrastructure Development Act. This meant the solar plant was recognised in law as infrastructure of national importance that needed to be fast-tracked.

Eskom’s internal technical units supported the project, on condition that the mine would use underground cables in the area where it crossed Eskom’s infrastructure, for safety reasons. Eskom then asked for and received payment of R15 million (US$950,000) to secure that connection.

** Read more: Corruption and clean energy in South Africa: economic model shows trust in government is linked to takeup of renewables**

But Eskom’s ad hoc distribution executive committee later rejected the permission. It claimed the project posed regulatory and operational risks. Instead, the utility proposed that the solar plant connect at a different substation and that the electricity be transported through Eskom’s network to the mine – a process known as“wheeling” – at an additional charge of about 30%. The mine told the court that this extra cost would have made the project too expensive to proceed.

Why the court intervened

Eskom, which depends heavily on selling electricity to large industrial customers, faces declining revenue as more companies generate their own renewable power. The scale of this shift is significant. Since 2018, the National Energy Regulator of South Africa registered more than 2,300 private electricity generation facilities with a combined capacity of about 18 gigawatts, much of it solar power built by mines, manufacturers and commercial businesses. This surge reflects companies trying to reduce their exposure to load-shedding and rising electricity costs.

But under South Africa’s constitution, public bodies must act lawfully, reasonably and for proper reasons. They cannot use their powers to protect their own commercial interests when legislation expressly allows private electricity generation.

The court reviewed Eskom’s refusal to grant the wayleave under the Promotion of Administrative Justice Act, which gives effect to the constitutional right to lawful and reasonable administrative action. It found that Eskom’s decision was unlawful and invalid. It held that the project did not pose risks and that Eskom had acted for an improper purpose, namely to protect its revenue.

** Read more: India and South Africa burn a lot of coal: what they can learn from each other about ending the dependency**

The court also rejected Eskom’s claim that it had a“right of first refusal” under the Electricity Regulation Act.

The court took the unusual step of ordering that the wayleave be granted. This is an extraordinary step in administrative law, reserved for exceptional circumstances. (Ordinarily, the court would have sent the matter back to Eskom to reconsider.)

Why the case matters

This case is not just about one mine. South Africa’s energy crisis affects everyone. When scheduled power cuts (loadshedding) occur because the grid does not have enough electricity, these disrupt households, damage small businesses, negatively affect workers and constrain economic growth. Expanding renewable energy generation is widely recognised as part of the solution.

When large industrial users like mines generate their own renewable power, they:

reduce pressure on the national grid

potentially free up electricity for other users

reduce greenhouse gas emissions and prevent further global warming

bring private capital into the energy sector

create and protect jobs.

** Read more: Nuclear and coal lobbies threaten to scupper renewables in South Africa**

These are all elements of a just energy transition, a shift to cleaner energy that also supports economic stability and livelihoods.

When lawful renewable projects aligned with national policy are blocked for commercial reasons, investment slows down. Uncertainty grows and confidence in legal reform weakens. The consequences reach beyond one company’s profits. They may influence how quickly South Africa can stabilise its electricity supply, shift away from coal and advance efforts to limit the impacts of climate change.

Policy ambition versus institutional practice

The judgment also exposes structural tensions within South Africa’s electricity sector. Reforms to the country’s energy laws increasingly support decentralised and private renewable generation. Yet institutions like Eskom face financial pressures as customers leave the grid or generate at least some of their own power from the sun, paying lower electricity bills as a result.

** Read more: South Africa’s power utility Eskom: how does it stack up in the pollution stakes?**

This tension is not unique to South Africa. Globally, transitions away from state-controlled electricity monopolies tend to create friction.

The High Court’s decision signals that the rule of law remains central to South Africa’s energy transition. It affirms that renewable energy reform is not merely aspirational policy. It has binding legal consequences.

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