A delegation from Chinese state-owned mining company Shandong Gold, which has expressed an interest in buying a 60 percent stake in embattled Aurora Empowerment Systems for $100-million (R700m), is in the country for further talks.
But according to union sources there is little expectation that Shandong, whose representatives are being kept away from the media, has any intention of restarting operations at Grootvlei on the East Rand, where hundreds of workers have not been paid since last year.
Gideon du Plessis, the deputy general secretary of Solidarity, confirmed that the delegation, which arrived in Johannesburg late last week for a three-week visit to do a due diligence of Aurora’s assets, would meet union officials tomorrow.
He said the Chinese were more interested in adding to their gold reserves than in restarting mining at the Orkney and Grootvlei operations, which stopped production in April last year. The underground operations on both sites had reportedly been looted of valuable equipment, which was sold for scrap, although management said it had sold materials as part of its maintenance programme.
“Their interest is to get gold reserves to add to their balance sheet. We are concerned that the $100m is not enough to restore the mines after destruction by Aurora.
“The best we can do is to find them (workers) employment elsewhere. We are not hopeful that they will get a cent because Aurora has been unethical.”
He said Aurora management was due to have met with workers at Grootvlei to discuss the deal yesterday, but no one pitched. On Friday, Solidarity filed a liquidation application on Aurora to pay R3.1m in outstanding salaries to workers.
Gauteng regional secretary of the National Union of Mineworkers (NUM) Mpho Phakedi confirmed that the meeting had been aborted.
NUM’s national spokesman, Lesiba Seshoka, said that workers were not excited after repeated promises that Chinese investors would save the mines were broken. The Chinese would be disappointed at the poor state of infrastructure at the former Pamodzi Gold mines, Seshoka said. The only value of any deal would be the removal of the Aurora management headed by Khulubuse Zuma, a nephew of President Jacob Zuma, Zondwa Mandela, a grandson of former president Nelson Mandela, and Michael Hulley, the attorney who defended the president in court.
The Chinese delegation arrived in the midst of a furore between the Department of Justice and Aurora’s liquidators as the latter are contesting the recent dismissal of lead Pamodzi liquidator Enver Motala and joint liquidator Gavin Gainsford for breaching regulations in a probe of the Aurora award.
Aurora was named the preferred bidder in 2009 for the management of the Pamodzi Gold assets after lodging R600m funding, but struggled to keep the operations afloat due to financial difficulties. The company has until August 16 to produce funding and could be saved by Shandong.
The liquidation process came under scrutiny after the Department of Justice axed two out of six liquidators on Monday. The master of the high court said both liquidators were no longer suitable for a joint provisional liquidation.
Motala would take legal action against his “illegal, unlawful and irregular” removal.
“Our reputation is at stake, and we are considering a court application to fight this decision. It is unprecedented and they have abused the law,” Motala said yesterday.
Jeffrey Kron, the head of the corporate and commercial litigation department at Denys Reitz in Johannesburg, said that the removal of the two liquidators and appointment of new liquidators would inevitably delay proceedings, and would increase the costs of the liquidations and any other transactions relating to the possible rescue of the two Pamodzi mines. - Business Report