Mining’s evil triplets
Government has claimed that it “doesn’t have a leg to stand on” to prevent a repeat of the events in August 2009 when empowerment organisation Aurora Empowerment Systems proposed to buy the gold assets of Pamodzi Gold for R215m.
Aurora, which was led by Zondwa Mandela, the late Nelson Mandela’s grandson, and Khulubuse Zuma, nephew of the president, embarked on an odyssey of broken promises in which the main losers were the families of miners who were hoping that Aurora would breathe new life into the failing Grootvlei mine as well as gold assets in Orkney.
In the end, the mines were stripped and lives were lost as illegal miners were pursued and shot dead by the questionable security allegedly drafted in by Aurora. It was a human disaster, and there are fears it could be repeated.
This time it’s the Blyvooruitzicht mine near Carletonville on the West Rand. The mine was placed into liquidation by Village Main Reef (VMR), a Johannesburg-listed company. The mine now effectively belongs to the liquidators whose mandate it is to return what value can be salvaged for creditors.
Bidding for the mine is Goldrich, which has former Aurora executives Fazal Bhana and Thulani Ngubane among its ranks. According to Government, however, it doesn’t have legal grounds to challenge the award of the assets to Goldrich notwithstanding the company’s questionable provenance.
“Legally, we don’t have a leg to stand on to refuse particular individuals the right to apply especially when dealing with brownfields,” said Susan Shabangu, Minister of Mineral Resources. “It becomes more of a commercial transaction.” In other words, money talks.
Says Shabangu: “We are very much concerned and worried. The mining right still belongs to Blyvoor. Our biggest concern is the behaviour of liquid-ators which might lead the asset [Blyvoor] into major challenges.”
While Government has often spoken of the need for the SA mining sector to help break the dominance over ‘the evil triplets’ of inequality, poverty and unemployment, it’s worth acknowledging that the sector has evil triplets of its own with which to contend.
Mine community impoverishment as with Aurora and possibly Goldrich is one, but pollution, and underground fatalities are another. The deaths of nine miners at Harmony Gold on 3 February comes amid the best safety statistics for the mining sector in 2013.
The other issue was the environmental ping-pong underway at Mintails, which has gold retreatment operations at sites near Krugersdorp. The DMR suspended Mintails activities amid claims by Kagiso residents that they were being adversely affected by the operations.
That’s nothing, according to Bloomberg News – one of its reporters took a soil and river sample near Blyvoor, and tests showed that uranium occurrence in the sample was 4 000 the natural level. Local residents are obviously vulnerable and so are investors.
The last t wo operators of Blyvoor were DRDGold and Village Main Reef (VMR) with the latter claiming it never legally owned the mine despite operating it for 18 months. One senses this is a bunfight waiting to happen.