The Westonaria local municipality and Rand Uranium have applied for a court interdict to restrain Bekkersdal residents from illegally occupying land in Gemsbokfontein, the Citizen reported on Wednesday.
Over a thousand residents were on Tuesday carrying shovels and picks onto the land to erect shacks and buildings, according to the newspaper.
The land is owned by the gold mining company.
In court papers, the municipality said it was not in a financial position to "take on the burden" of providing housing services it had not planned or budgeted for.
The municipality said the area had been rezoned for agricultural purposes, and it was geologically unstable and prone to sinkholes.
The case was due to be heard in the high court in Johannesburg on Monday.
Maladministration and nepotism
Last year, violent protests broke out in the area and lasted for more than a month when residents demanded the removal of the municipality's mayor Nonkoliso Tundzi.
They accused her of maladministration and nepotism.
Residents told the newspaper that government was dragging its feet in resolving their concerns over the mayor. – Sapa