[miningmx.com] — ALTHOUGH the future of the state mining house is in the balance, its CEO earned a healthy bonus in the past financial year.
The head of the African Exploration Mining and Finance Corporation (AEMFC), Sizwe Madondo, received a bonus of R893 000, bringing his total remuneration for the year to almost R3m. His salary is R2m-plus.
The bonus was awarded despite Auditor-General Terence Nombembe’s audit report on the AEMFC annual results to end-March, which states that it is highly uncertain whether the company can be regarded as a viable business as its liabilities exceed its assets by more than R47m.
The AEMFC suffered a net loss of R23m for the year – the third successive loss. This is also by far its biggest loss over the past three years.
In June, the company delivered its first coal to another state facility, Eskom.
Earlier this year the AEMFC started up a coal mining project at Ogies. It has one mining right and 27 prospecting rights.
In December 2010 the ANC Youth League welcomed cabinet’s decision to make the AEMFC a state-controlled mining house in its own right. The League regarded it as a victory in its battle for nationalisation of the country’s strategic sectors.
The financial statements of the AEMFC, which is still a wholly owned subsidiary of the Central Energy Fund (CEF), were tabled in Parliament on Monday as part of the CEF’s latest annual report.
Last year government granted the company a loan of around R74m.
Critics continually warn that this mining company will have to be carried by the taxpayer on an ongoing basis, just like the other state mining house, Alexkor.
According to the annual results one of the problems that the company experienced in the past financial year was the Department of Mineral Resources’ moratorium on prospecting rights introduced in September 2010, which obtained for six months.
The AEMFC was therefore unable to expand its business portfolio.
The AEMFC’s current portfolio includes limestone, coal and uranium. According to its results the company is looking to lithium, rare earth metals and base metals to advance its growth strategy.
