Blyvoor will be tough sell for veteran Skeat
There’s no faulting Peter Skeat, a mining veteran with notable highlights on his CV, when it comes to talking up his ventures.
Skeat has had a poor run of form in recent years, with the Galaxy Gold venture — a huge operation at a century-old mine in Barberton failing to take off.
This time, he plans to restart the decades-old, shut, vandalised and stripped Blyvooruitzicht gold mine, overrun by illegal miners who, according to TV programme Carte Blanche, have running gun battles with security guards.
Drdgold sold the mine in 2012 to Village Main Reef, which was a cash shell brought briefly back to life by Bernard Swanepoel, the former CEO and turnaround artist of Harmony Gold, who made his reputation by buying old gold mines, stripping costs to the bone and keeping the operations open and profitable for many years.
The Swanepoel magic failed to revive Blyvoor, which was crippled by seismicity, water ingress and high costs. It was shut in 2013.
If Skeat failed to secure the R400m he needed in 2010 for Galaxy — an operating mine in a stable area — then his chances of securing $100m or R1.4bn to restart Blyvoor appear doomed from the start.
Blyvoor comes with the dangerous problems of evicting illegal miners who have had an unfettered run of the place for years and dealing with a dismal environmental legacy at a time when mining in SA is regarded with scepticism by investors. This will make fundraising difficult no matter how rosily Skeat paints his vision for the mine.
It’s not only SA’s chicken producers who are having a hard time with imports. Cheaper steel imports, mainly from China, are killing the country’s metals industry.
But SA’s severe economic problems have now been compounded, according to the Steel and Engineering Industries Federation of Southern Africa (Seifsa). It holds President Jacob Zuma directly responsible for the downgrade to junk status.
It says Zuma’s action of firing ministers in the wee hours is an act of “gross recklessness, which has had a big negative effect on the economy”.
“The high office that Mr Zuma holds constitutionally enjoins him to put SA’s interests first in everything that he does. He is supposed to be an asset to the country and a unifier. Regrettably, however, increasingly our president is proving to be a major economic liability.”
The domestic economy has consistently underperformed in the past few years.
The metals and engineering sector has lost thousands of jobs as companies downsized or went out of business. The latter include a BHP BiIliton aluminium smelter and a Tata Steel plant — both in Richards Bay.
Meanwhile, SA’s secondlargest steel producer, Evraz Highveld Steel & Vanadium, is long gone.
Seifsa says that despite the president’s prerogative to pick his cabinet, on this occasion, it did not believe he took SA’s interests into consideration. “We are concerned that the situation is likely to get worse in the days, weeks and months to come.”
The body also called on “similarly concerned South Africans to rise up and make their voices heard in order to reclaim the SA of Nelson Mandela, Walter Sisulu and Ahmed Kathrada”.
Viva, comrades! Viva!