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Vantage Goldfields is hoping that a meeting this week with the Industrial Development Corporation (IDC) will yield funding to keep the company in business and save more than 900 jobs at its troubled Lily gold mine in Mpumalanga.
Mandla Mpangase, spokesperson for the development corporation, confirmed this week that Vantage Goldfields had applied for R250 million in funding. The IDC was still assessing the application, he added.
This follows a costly, failed exercise to retrieve the bodies of three trapped mine workers. The suspension of operations has left the mining company in dire straits and in need of a bailout.
Vantage Goldfields has hired business-rescue practitioner Rob Devereux to save the mine in Louisville, outside Barberton, from financial ruin that threatens closure and job losses.
If the company had not resorted to voluntary business rescue, it would have faced certain liquidation and been liable to lawsuits from creditors.
The company failed to pay workers their salaries on April 25 because of its financial troubles.
Mineral Resources Minister Mosebenzi Zwane instructed Lily gold mine management to suspend operations after a steel container office with the three unfortunate workers inside it was pulled into a sinkhole on February 4.
The bodies of Pretty Nkambule, Yvonne Mnisi and Solomon Nyerende are still trapped underground after the failure of various rescue operations.
The 76 workers who were inside a tunnel were rescued, but gold extraction could not continue because the sinkhole happened right at the entrance to the mine’s shaft.
Geological experts who were subsequently called in warned that it was dangerous for the rescue teams to continue trying to find the container and the three workers.
Devereux said that Lily gold mine employed 900 workers, with a salary bill of R10 million a month.
“The pillar stone of the business-rescue process is to save jobs and, as you know, each worker supports about 10 dependants in the community. We are seeking funding from various people and are working out a plan to pay our creditors,” said Devereux.
He added that the mine had so far almost managed to keep up to date with paying salaries, even though it had not been operating since February.
The company’s plan, said Devereux, was to deploy some of the workers to its Barbrook gold mine and reskill others while the Lily mine remained closed.
Devereux said that part of the bailout would be used to fund the drilling of a new opening to retrieve the container.
The company – in consultation with the families of the trapped workers, the department of mineral resources and the Association of Mineworkers and Construction Union (Amcu) – agreed on the new shaft as the cheapest and safest option.
Devereux said that the failed rescue and recovery missions to reach the container office had cost Vantage Goldfields “tens of millions of rands”.
Although he was reluctant to release exact figures, Amcu indicated that they were told drilling a new opening would cost R70 million and take six months, as opposed to removing the soil on top of where the container is believed to be.
The second option could cost R500 million and take two years to complete, said Amcu’s branch secretary, Abednego Magongo.
There are also mining machines underground that need to be retrieved and serviced.
“As workers, we are hoping that the funds will come and we will be paid our salaries this month.
“When we met the [business-rescue] practitioner on April 21, he said he was looking for funds and we might be paid on April 29,” said Magongo.
“The practitioner has promised us that he is looking for short-term funds to pay salaries, and, in the long term, to get the money to find the container,” he added.
Vantage Goldfields has thus far failed to pay R4.4 million in compensation that it promised to the three bereaved families and the surviving workers in February.
Company chief executive Mike McChesney and Zwane announced that each surviving worker would get R50 000, while relatives of Nkambule, Mnisi and Nyerenda would pocket R200 000 each.
“The mine said the compensation would come from the funds they are sourcing,” said Magongo.
Trade union Solidarity this month said that the main priority of Lily mine’s business-rescue practitioners and management should be to find the bodies of the three missing miners, but it was as important to provide job security to the hundreds of miners who stood to lose their jobs if an alternative stream of revenue or financing could not be found.
Solidarity general secretary Gideon du Plessis said the consequences of the mining accident would be even more tragic if the 900 workers, each with an average of six to 10 dependants, were plunged into poverty due to layoffs.
