Cash-strapped employees at the Blyvooruitzicht mine will sleep better tonight after the South Gauteng High Court ruled that the sale agreement between the mine and Goldrich Holdings had lapsed after the buyer missed several deadlines.
“God has answered our prayer. We are happy that the dogs are being evicted from the mine,” a member of the National Union of Mineworkers (NUM), who was among a dozen in the court gallery, said after the ruling yesterday.
Blyvooruitzicht’s liquidators have been trying since January to get control of the mine, and were originally granted an urgent interdict to prevent Goldrich from removing scrap metal from the mine.
The victory means that the liquidators will distribute dividends to employees once the assets and a liquidation account have been confirmed by the Master of the High Court.
All eyes will be on how the liquidators handle the process going forward. They must select alternative buyers for the mine after rigorous scrutiny so they can ensure that jobs are maintained and the economic viability of the area is restored.
NUM members have complained that Goldrich did not have the interests of the community and employees at heart when it bought the mine for R70 million last year.
Blyvooruitzicht was put into provisional liquidation in August last year and Goldrich became the preferred bidder in December. Months later the bills began to mount, and illegal mining increased with reports of zama-zamas having free rein in the mine.
The mine’s electricity and water supply were cut because of non-payment of bills.
Many employees had lost hope and returned to their homes in Lesotho, but some have waited in the hostels for their money to be paid. They reported that they walked to the taxi rank to fetch water.
Some directors of Goldrich also served at Aurora Empowerment Systems, which ran down Pamodzi’s Grootvlei and Orkney assets and failed to pay employees. page 16
Retail sales
Economists have predicted that retail sales growth probably slowed to 1.4 percent in March from 2.2 percent in February. Should this prove to be true, then the retail sector is indeed facing a tough year.
Again economists insist that this important economic indicator will be dragged down by the slowdown in disposable income.
Consumers’ disposable income has been eroded by higher prices of essential items, such as petrol and utilities. Other contributors to the slowing down of retail sales include the high level of indebtedness and a large portion of credit-active consumers struggling to service their existing debt.
Furniture retailers are likely to experience a much harder year than those in the food and clothing categories. These retailers have been affected by the slowdown in credit granting by credit providers.
Elevated unemployment and depressed consumer confidence will act as additional factors that will constrain growth in personal consumption. The February retail sales data, which decelerated from a revised 6.4 percent growth in January, pushed economists to revise the country’s economic growth forecasts for this year down to 2.2 percent year on year, and down to 2.6 percent year on year for next year.
Strike action in the platinum belt has also contributed to the slowing down of retail sales and repayment of credit.
Economists said these various dynamics had already been reflected in the contraction in passenger vehicle sales for the seventh consecutive month in April.
They predict that domestic demand is at risk of moderating further, dented by higher interest rates and further erosion of real disposable incomes by rising state-administered utility tariffs.
The slump in consumer spending has pushed retailers and food companies into a corner when it comes to absorbing some of the costs.
Food companies and retailers have come to an unspoken “consensus” that they will absorb input costs and not pass all the costs on to consumers through increased prices.
Edited by Banele Ginindza. With contributions from Dineo Faku and Nompumelelo Magwaza.