Correctional Services spokesman Manelisi Wolela has denied allegations that student leader Mcebo Dla.
The Msukaligwa municipality in Ermelo, Mpumalanga, is to remove squatters who have illegally occupied part of Wesselton ward 2.
Officials say the area is privately owned and is earmarked for mining operations.
The municipality said it was saddened and disturbed by the growing gloomy situation in the area known as Enkanini.
"It must be put on record that the people of Enkanini were part of ward community meetings in June last year in which it was agreed that they would refrain from occupying the private land," said municipal spokesman Surprise Nkosi.
"These people have not adhered to any of the things that were said at that meeting. This leaves the municipality with no alternative but to remove them as they are now regarded as squatters. This area has been earmarked for mining.
"People should take cognisance of the fact that the issue of a township's establishment is normally handled by the department of agriculture and land administration. The department normally assists municipalities to overcome challenges of this magnitude," he said.
"We have conducted research which has led us to conclude that New Ermelo, Ward 16, be developed for the provision of housing for these people," said Nkosi.