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One person was killed in protests in Mashishing, Mpumalanga, a community leader said on Friday.
Police could not confirm the death.
Mandlakayise Mabelane from the Mashishing Activists Forum said protests erupted in the area - previously known as in Lydenburg - after the forum's demands, detailed in a memorandum handed to government last week, went unmet.
Government's failure to respond resulted in "spontaneous outbursts" of protests in the area since Wednesday.
"There are spontaneous outbursts everywhere and the presence of the police is going to exacerbate the situation," he said.
On Friday morning police fired live ammunition at protesting residents, charged Mabelane, resulting in the death of one person.
"We are taking the police to the ICD for using live ammunition."
Mpumalanga police spokesperson Captain Leonard Hlathi earlier said the situation was calm and the home of Clara Ndlovu, mayor of the Thaba Chweu municipality, was stoned by protesting residents.
Hlathi said Ndlovu's home was stoned during the night on Thursday, prompting authorities to remove her to safety.
Nine protesting residents were arrested during the incident.
The memorandum given to Ndlovu's office and the provincial government last Friday detailed demands regarding service delivery and the council's alleged inability to account for taxpayers' money.
According to reports, the municipality's main bank account was hacked into in May, resulting in the disappearance of R3.2 million.
Thaba Chweu municipality spokesperson Puleng Mapheto said the mayor was safe and confirmed the municipality had received the memorandum from residents last week. He said the municipality was waiting for a response from the premier.
Among protesters' demands was that the mayor, the municipal manager and the chief financial officer resign "as a matter of urgency", said Mabelane.
He said calls for a meeting with the premier also fell on deaf ears and the community was becoming increasingly agitated at government's failure to respond.
He was meeting the African National Congress's regional leadership on Friday afternoon to discuss an end to the impasse. - Sapa