GOLD NEWS

Orkney gold sale finally goes through but union remains wary

The sale of provisionally liquidated Pamodzi Gold's Orkney mine has finally been concluded.

Despite welcoming the sale of Pamodzi Gold's Orkney mine for around R140m to China African Precious Metals (CAPM), union Solidarity has warned the new owners not to follow in the footsteps of predecessors, Aurora Empowerment Systems.

The union said that the conclusion of the sale eventually brings hope to thousands of workers in the Orkney area that had been stricken by Aurora's failed attempt to rescue the business.

Gideon du Plessis, the general secretary of Solidarity, said "Solidarity hopes that CAPM will get operations at the mine going as soon as possible and will be able to provide jobs for the hundreds of employees who lost their jobs when the mine was liquidated while under Pamodzi's management and was further destroyed by Aurora after the latter took over the management of the mine".

Johan Engelbrecht from Joint Provisional Liquidators said that CAPM now exercised control over the mine and the day to day operations and had proposed a phased implementation plan in respect of the mine.

CAPM is 74% owned by Superb Gold Ltd, a subsidiary of the SSC Mandarin Group, with 26% owned by a broad based black economic empowerment consortium led by Elias Khumalo.

The Mail & Guardian reported in 2006 that Khumalo, a former trade unionist, was part of President Jacob Zuma's inner circle.

Solidarity's press release said that SSC owns various mining companies in the Free State and the Northern Cape and that CAPM is planning to spend more than R525m to build a new gold plant at Orkney to have the mine fully productive within a year.

Pamodzi Gold (chaired by a recipient of an entrepreneur of the year award and recently elected president of the Black Business Council, Ndaba Ntsele) went into final liquidation in 2009.

Politically connected company, Aurora Empowerment Systems, stepped in and took control of the now defunct assets.

A drawn out and unsuccessful process followed, resulting in the liquidator, Enver Motala, and Aurora finally being removed after none of the promises to revive the mines materialised. Aurora was also subsequently placed under final liquidation.

Du Plessis said that an inquiry into the charges against the directors of Aurora was ‘going full steam ahead' and that they would be charged in terms of section 424 of the Companies Act in which the directors could be held personally responsible for the mismanagement of a company.

Khulubuse Zuma, the nephew of President Jacob Zuma, Zondwa Mandela, former president Nelson Mandela's grandson, Thulani Ngubani, the commercial director, as well as Fazel and Solly Bhana, the management consultants who were appointed by the directors to manage the Pamodzi mines on behalf of Aurora were all part of the inquiry held into the failed rescue of the mines.

Gold One agreed earlier this year to purchase certain surface assets of Pamodzi's Grootvlei mine for R70m and DRDGold has confirmed that it is in talks with the liquidators to purchase the dumps for recycling.