[miningmx.com] — THIS Christmas will be the third that Orkney and Grootvlei mineworkers will not be paid by Pamodzi Gold.
The messy liquidation of the two formerly magnificent mines has now devolved into disrepute, crime, poverty and particular misery for the thousands of workers and their families.
Frans Baleni, general secretary of the National Union of Mineworkers (Num), this week related how a CNN reporter had sat in his office and cried after visiting hostels housing Grootvlei workers near Springs.
For many years the two mines were pillars of the country’s gold industry, but in 1994 Orkney was sold by Anglo American’s gold and uranium division to Patrice Motsepe’s African Rainbow Minerals. In 2001 it was transferred to Harmony, and in November 2008 taken over by Pamodzi Gold.
But Pamodzi operated the mines only a couple of months before running out of money. Wages for December 2008 were paid more than a month late and in April 2009, Pamodzi was placed under provisional liquidation.
Then something strange happened: Enver Motala, one of the most controversial figures in liquidation industry, was appointed liquidator by the Master of the High Court.
Some months later, Motala appointed Aurora Empowerment Systems – a company whose shareholders are Khulubuse Zuma, a nephew of President Jacob Zuma, and Zondwa Mandela, grandson of former president Nelson Mandela – as the “preferred bidder” in the sale of the two mines.
Motala also appointed Aurora as interim manager for the two mines.
The strange thing is that Aurora had no experience of managing gold mines. And, just as the two unions had feared, Aurora continued to avoid paying the workers.
Not only that, it also failed to pay over the workers’ unemployment insurance contributions or income tax, said Solidarity trade union’s deputy secretary general Gideon du Plessis on Monday. This violates the laws of the country which apply to all employers.
In March this year Num began to strike at Grootvlei, upon which Aurora announced that it was temporarily discharging all of the mine’s 5 500 workers. Only 200 were retained to do so-called maintenance work, but these, too, were paid extremely erratically.
NOTHING TO SHOW FOR 40 YEARS’ SERVICE
Meanwhile, the department of mineral resources assumed the responsibility of pumping water out of the mine, because one of Grootvlei’s shafts was at the point of discharging acid mine water should pumping stop.
On Monday Baleni and Du Plessis addressed a news conference in which they spelt out their intention of having Motala removed as liquidator.
Liquidation of South African gold mines is not an everyday occurrence – it’s an enormous process as these deep-level underground mines contain assets worth millions and even billions that can be resold. There are also large creditors.
And since up to 50% of a gold mine’s operating cost is labour, workers, through their unions, are almost always the most important creditors in such liquidations.
In the case of Orkney, each of the three sales transactions over the past 16 years was done on condition that the workers would surrender their years of service and be appointed afresh.
Some of the oldest workers in this mine have reached the age of 62 and have worked in the mine since their early twenties, but their service records reflect less than three years’ service at the mine. In the event of retrenchment, they are therefore entitled to only about three weeks’ compensation – after having worked in the same mine for 40 years!
They signed away recognition of their years of service in order to reduce the risk to and responsibilities of a new owner, and thus make the mine more attractive to a buyer. The workers trusted the new employer because they had no alternative.
Mines are usually in remote locations, where the management is generally responsible for law and order.
At Grootvlei and Orkney it is clear that this has totally collapsed.
Yet someone is making money from the situation. Visitors to the mine can clearly see what is happening: the rigging is being dismantled without challenge and the steel sold as scrap.
It’s clear that the two mines are being stripped of their assets. The great pity is that the mines would probably have been able to produce gold a few years longer, even if the workforce had to be reduced by half or more.
Otherwise, an orderly liquidation would result in the thousands of tons of scrap steel and copper being sold to help provide the remaining workers with exit wages and unemployment insurance.
The asset stripping currently under way means that no gold will ever come from Grootvlei or Orkney again.
On Monday Baleni and Du Plessis declared in no uncertain terms that Motala, as far as they were concerned, was apparently hand in glove with Aurora, and unfit to act as an independent liquidator.
A couple of months ago, they said, Mandela and Zuma had sat in that very conference room and admitted lying about the liquidation. They had given undertakings and had since broken every one, stated Baleni.
He said quite bluntly that for two years no action had been taken against them. The only explanation was that they had high political connections.
This is how things are in a predator state. Laws do not apply to the political elite, who mercilessly fatten themselves off the economically destitute.