LIFE­LINE

Paras­tatal moots plan to raise cap­i­tal and re­open Lily and Bar­brook mines

CityPress - - Business - SIZWE SAMA YENDE busi­ness@city­press.co.za

The Mpumalanga pro­vin­cial gov­ern­ment is ready to throw a life­line to cash-strapped Aus­tralian com­pany Van­tage Gold­fields to save jobs at its moth­balled mines. Dur­ing his state of the prov­ince ad­dress last Fri­day Mpumalanga Premier David Mabuza said that the Mpumalanga Eco­nomic Growth Agency (Mega) had been in­structed to ex­plore the vi­a­bil­ity of cre­at­ing a di­ver­si­fied, state-owned mine to res­cue jobs – par­tic­u­larly at Lily and Bar­brook mines.

“Mega has [40%] shares in two an­thracite mines – Nko­mati and Kang­wane – and we can utilise that arm in­stead of hav­ing min­ing as­sets in the prov­ince that are ly­ing idle when un­em­ploy­ment is high,” Mabuza said.

“If there is no in­vestor [for Lily and Bar­brook mines], we can en­ter the space and mine. We can turn the sit­u­a­tion around with the re­sources we have.

“What is good about us is that we will not be look­ing for profit and will rein­vest the money into the com­mu­ni­ties,” he said.

Lily and Bar­brook busi­ness res­cue prac­ti­tioner Rob Dev­ereux said this week that he would be­gin ne­go­ti­a­tions with the Mpumalanga agency.

Dev­ereux said he had man­aged to ac­quire more than half of the R300 mil­lion re­quired to re­open the two mines from var­i­ous in­vestors, but noth­ing could hap­pen un­til the full amount was pro­cured.

“We have got var­i­ous pack­ages of fund­ing, but not the full amount. What we have will not be enough to start work­ing. We will hear what Mega is go­ing to do, and the premier’s ini­tia­tive was most wel­come,” Dev­ereux said.

Mega CEO Xola Sit­hole said the paras­tatal was open to ac­quir­ing a stake in the mines and rais­ing cap­i­tal to re­open them – as it had done at Nko­mati An­thracite, where it part­nered with the In­dus­trial De­vel­op­ment Cor­po­ra­tion to in­ject R150 mil­lion for ex­pan­sion pur­poses.

Mega, Sit­hole said, was ex­plor­ing the pos­si­bil­ity of es­tab­lish­ing a state-owned min­ing com­pany and to grow its port­fo­lio via eq­uity ac­qui­si­tion and or­ganic growth.

“Min­ing con­trib­utes 25% to Mpumalanga’s gross do­mes­tic prod­uct and is crit­i­cal to the econ­omy. Lily Mine is a so­cioe­co­nomic tragedy and the premier has asked us to see how we can par­tic­i­pate [in ef­forts] to res­cue it. We are open to any op­por­tu­nity that may in­clude eq­uity share­hold­ing,” Sit­hole said.

Van­tage Gold­fields ceased op­er­a­tions at its Lily and Bar­brook gold mines, sit­u­ated in Louisville near Bar­ber­ton, last year.

Op­er­a­tions at the Lily mine were halted on Fe­bru­ary 5 last year, when its shaft col­lapsed and buried three work­ers who were in a con­tainer of­fice that plunged 60m un­der­ground. The work­ers have not been re­cov­ered.

Bar­brook was placed un­der busi­ness res­cue in De­cem­ber af­ter hav­ing to ab­sorb some of Lily mine’s em­ploy­ees, as well as ad­di­tional costs fol­low­ing the dis­as­ter. When Bar­brook work­ers were pre­vented from dig­ging for gold by unions and com­mu­nity mem­bers in Novem­ber, it marked the fi­nal blow that sent Bar­brook into fi­nan­cial dis­tress. Both mines were placed un­der busi­ness res­cue. The mines em­ployed more that 1 000 work­ers, 900 of whom were at­tached to Lily mine.

The cash that Van­tage Gold­fields needs will be used to open a new shaft for gold ex­trac­tion to re­sume, and also to re­trieve the con­tainer of­fice in which Pretty Nkam­bule, Yvonne Mnisi and Solomon Nyirenda were buried.

Part of the in­vest­ment – R4.4 mil­lion – would be paid as com­pen­sa­tion to the be­reaved fam­i­lies (R200 000 each) and 75 mine work­ers (R50 000 each) who were trapped un­der­ground.

Van­tage Gold­fields has 4.9 mil­lion tons of gold in re­serve, which can be mined for the next 11 years.

The clo­sure of the two mines has af­fected the econ­omy of Louisville to such an ex­tent that lo­cal busi­nesses are now col­laps­ing.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.