Business

Families of dead Lily Mine workers lay culpable homicide charges against mine directors

2019-04-07 06:25

Families of three miners, who were buried underground when a Mpumalanga mine collapsed in 2016, have laid culpable homicide charges against Vantage Goldfields SA (VGSA) directors this week.

The Department of Mineral Resources (DMR) was expected to have done so after concluding its inquiry into the disaster at Lily Mine in March 2018, but it did not. DMR only handed a report to the National Prosecuting Authority (NPA) in August 2018 which it said had recommendations for prosecution but the NPA could do nothing about it because there was no police docket.

Mpumalanga NPA spokesperson, Monica Nyuswa, told City Press last month that the NPA could only formulate charges if there a charge had been laid and there was a police investigation.

The entrance of Lily Mine in Louisville near Barberton collapsed on February 5 2016.

Yvonne Mnisi (30), Pretty Nkambule (22) and Solomon Nyirenda (39) - who were working in a lamp office, plunged underground and were never to be found.

Mpumalanga police spokesperson, Colonel Mtsholi Bhembe, confirmed that the families have laid culpable homicide charges against the mine’s directors.

“Naturally, [the docket] will have to be sent [to the NPA] for a decision on whether to prosecute or not,” Bhembe said.

DMR spokesperson Ayanda Shezi still avoided providing clarity on why the department had been reluctant to lay charges with the police after completing the inquiry.

“The DMR conducted an inquiry into this accident in terms of section 65(1) of the Mine Health and Safety Act No.29 of 1996 (MHSA). At the conclusion of the inquiry the DMR prepared a report in terms of section 72(1) (b) of the MHSA. The report contains recommendations for criminal prosecution. The DMR has forwarded the report to the Director of Public Prosecutions in terms of section 72(3) of the MHSA,” Shezi said.

She said the report was forwarded to the NPA in August 2018. DMR, however, produced two reports after the inquiry, which unions and lawyers said was unprecedented.

The report that DMR sent to unions, the families and other stakeholders was silent on punitive action that should be taken against the mine’s managers.

The second report, which DMR sent to the NPA, was not shared with third parties.

Vantage Goldfield SA’s chief executive officer, Mike McChesney, did not respond when asked in writing if the company’s directors took responsibility for the disaster or not.

Self-enrichment and greed could have precipitated the stalemate in the sealing of a deal to handover ownership of two Mpumalanga gold mines to new owners.

Vantage Goldfields SA (VGSA), which owns Lily and Barbrook mines in Louisville near Barberton, is at loggerheads with the SSC Flaming Silver - the black-owned company which has signed an agreement to purchase 74% shareholding in the business.

Even though the Department of Mineral Resources has approved of the transfer of shares, VGSA has put a spanner in the works of reopening the new mines by refusing to hand over documents and its directors’ resignations to SSC Silver Flaming.

Lily and Barbrook Mines were shut down in 2016 and placed under business rescue after an entrance to Lily Mine collapsed on February 5 of that year and led to three workers who were working in a container office being buried underground.

The mines needed a R310 million investment to be re-opened, and two Canadian companies who wanted to invest, pulled out of the deal. SSC Flaming Silver loaned R190 million from the Industrial Development Corporation (IDC) - a condition of its release was that VGSA should handover the share certificates - and sourced more funding from other investors.

Last week, SSC filed paper in the North Gauteng High Court to compel VGSA to hand over the documents.

According to documents City Press has seen, the alleged reasons for VGSA dragging of feet, are that:

VGSA directors want their shareholding in the company, agreed on May 18 2018, to be increased from 12% to 26% by forced dilution of the employee and community shareholding structure;

SSC Silver Flaming proposed to make 12% shareholding available to the creditors and proposed a conversion of their debt into a holding instrument as security until their claims have been settled, but VGSA rejected the proposal;

Three VGSA directors have created a R13 million creditor claim for retrenchment packages which SSC Flaming Silver has disputed;

SSC disputed VGSA’s CEO Mike McChesney’s R5 million creditor claim of his company, Cheston Minerals (Pty) Ltd, for “services rendered”;

VGSA directors and business rescue practitioner, Rob Devereux, insist that SSC FS should pay their “creditors claim” first, before any equity is spent on the opening of the mines;

SSC Flaming spends R1.2 million currently for care and maintenance of the companies and about half of this money is spent on Mike McChesney’s salary, directors’ consulting fees and Cheston Minerals (Pty) Ltd for “services rendered”;

The document further says: “[Vantage Goldfields] insists that we have not complied with the funding arrangements, but fail to mention that in August 2018, they signed off on our funding ability when they applied for the section 11. If we had not complied with the funding requirements, they could have either refused to compile and submit the Section 11, since they were the applicant to the DMR, or could have cancelled the sale of shares agreement then.”

McChesney declined to comment to these allegations. “It seems from your inquiry that you are unaware of the latest developments. The VGSA agreement with Flaming Silver was cancelled on 26 March 2019 and the matter is now sub judice.”

SSC Silver Flaming has however rejected the cancellation of the sale of shares by VGSA, according to a letter its lawyer Roxanne Bartie wrote to McChesney, and has, in its court application on March 14, accused VGSA of being in breach of the sale agreement.

SSC CEO Fred Arendse said that it was frustrating that such a landmark deal - where the Lomshiyo community and employees have 26% shareholding - was being frustrated.

“The stalemate is completely unnecessary. We’ve complied with everything we’re supposed to. We’ve raised more than enough money. This conduct by VGSA is prejudicial to our community first and ex-employees and creditors who have been waiting for three years,” Arendse said.

“The parties must let go of their selfish interests. We’re ready to start mining as in tomorrow,” he said.


Next on City Press

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining

November 17 2019