Min­ers get jobs back

Lily and Bar­brook to merge af­ter shut­ting down op­er­a­tions 15 months ago

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

Hun­dreds of peo­ple stand to be em­ployed as the Lily and Bar­brook mines in Mpumalanga are due to re­sume op­er­at­ing 15 months af­ter they were forced to shut down be­cause of fi­nan­cial dis­tress. This is thanks to a merger be­tween the two sis­ter mines’ pro­pri­etor, Van­tage Gold­fields, and Cana­dian com­pany Galane Gold.

Lily Mine em­ployed 900 work­ers, while Bar­brook em­ployed 100 be­fore the op­er­a­tions were moth­balled.

The mines were put un­der busi­ness res­cue last year and it has been a strug­gle to raise R300 mil­lion in in­vest­ment to restart op­er­a­tions and re­trieve the re­mains of three work­ers who were buried when the en­trance of Lily Mine col­lapsed on Fe­bru­ary 5 last year.

An­other Cana­dian com­pany, AfroCan Re­sources Gold, re­neged on its agree­ment to bail out Van­tage Gold­fields with R172 mil­lion last year.

The Mpumalanga govern­ment’s paras­tatal – the Mpumalanga Eco­nomic Growth Agency – had also been plan­ning to take over the mine should Van­tage Gold­fields fail to at­tract pri­vate in­vestors.

Busi­ness res­cue prac­ti­tioner Rob Dev­ereux said Van­tage Gold­fields – an Aus­tralian com­pany – and Galane had signed a let­ter of in­tent and had un­til June 16 to sort out out­stand­ing is­sues per­tain­ing to the merger.

Dev­ereux said both com­pa­nies were this week dis­cussing plans on how to restart op­er­a­tions.

“The com­pa­nies will merge into a big­ger group and share­hold­ing will be 50-50,” Dev­ereux said.

He said the res­cue busi­ness plan of Lily and Bar­brook mines would be taken and im­ple­mented as it was.

Galane Gold has a foot­print in Africa. It owns the Gal­axy Mine in Bar­ber­ton and Mu­pane Mine in Fran­cis­town, Botswana.

Galane CEO Nick Brodie said the merger was a sig­nif­i­cant step for Galane’s goal to re­shape the com­pany into a long-life and low­cost op­er­a­tion that could pro­duce pos­i­tive re­sults for in­vestors across com­mod­ity cir­cles.

“The Van­tage mines are lo­cated within 30km of our ex­ist­ing op­er­a­tions at Gal­axy Gold and ob­vi­ous syn­er­gies ex­ist be­tween the two op­er­a­tions. We hope to lever­age these syn­er­gies to cre­ate an op­er­at­ing as­set in the Bar­ber­ton area which, to­gether with the com­pany’s Gal­axy prop­erty, is ex­pected to re­sult in a com­bined re­source ex­ceed­ing 5.8 mil­lion ounces, pro­duc­tion of over 160 000 ounces per an­num and an all-in sus­tain­ing cost of less than $900 (R11 800) per ounce,” Brodie said.

Brodie said that a plan had been agreed with Van­tage man­age­ment and Dev­ereux that would see op­er­a­tions recom­mence within 90 days of the com­ple­tion of the ac­qui­si­tion.

The mines sus­tained the econ­omy of Louisville vil­lage and their clo­sure had neg­a­tively af­fected other busi­nesses in the area, which re­lied on in­come the work­ers earned from the mines.

In or­der to re­open Lily Mine, R200 mil­lion was needed to drill a new shaft.

Since the col­lapse, the re­mains of the three work­ers – Pretty Nkam­bule, Yvonne Mnisi and Solomon Nyirenda – have not been re­cov­ered. They were work­ing in a con­tainer of­fice when it col­lapsed and sank down.

Bar­brook was placed un­der busi­ness res­cue af­ter it had to carry an ex­tra bur­den to ab­sorb some of Lily Mine’s em­ploy­ees, as well as ad­di­tional costs fol­low­ing the disas­ter.

Its fi­nan­cial sit­u­a­tion wors­ened when unions and com­mu­nity mem­bers pre­vented work­ers from digging gold.

Ac­cord­ing to Dev­ereux’s busi­ness res­cue plan, Lily Mine would re­turn to prof­itabil­ity within eight months once an ac­cess de­cline was drilled.

There are 4.9 mil­lion tons of ore re­serves that could be mined for the next 11 years at Louisville.

Mean­while, the fam­i­lies of the de­ceased have each been paid R200 000 com­pen­sa­tion as promised by Min­eral Re­sources Min­is­ter Mosebenzi Zwane af­ter the disas­ter last Fe­bru­ary.

Seventy-five work­ers who sur­vived the ac­ci­dent were promised R50 000 each.

They have been paid R10 000 so far, while the de­part­ment is rais­ing more funds.

PHOTO: EPA

BAR­REL OF BUCKS An em­ployee walks next to oak bar­rels filled with Brexit Whiskey near Riegers­burg, Aus­tria, on Thurs­day. Aus­trian family busi­ness Goelles pro­duces its Brexit Whiskey made of five dif­fer­ent grains - mainly maize, rye, bar­ley, wheat and spelt - as a coun­ter­part to clas­sic Scot­tish sin­gle malts

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