The Blyvooruitzicht 5 Shaft . photo supplied

Johannesburg - The power supply to the Blyvooruitzicht Mine’s Five Shaft in Carletonville was cut on Friday, signalling possible flooding as it failed to pay its R61 million debt to state-owned power utility Eskom.

At the same time, the “humanitarian crisis” at the mine turned for the worse as Unemployment Insurance Fund (UIF) payments would cease as of tomorrow, George Kgoroyaboco, Blyvoor’s National Union of Mineworkers (NUM) shop steward said on Friday.

“I just received an SMS from the former human resources manager that electricity has been shut at the shaft.

“There is no more future for the mine and it is likely that the shaft may flood,” Kgoroyaboco said.

This comes after Eskom sent a severance notice addressed to Leigh Roering, the liquidator at Messrs Harvard Corporate Recovery Services, the liquidation firm on March 17, informing him that the power supply would be terminated on Friday at 10am if the outstanding balance of R61m was not paid by March 18.

The gold mine, which was placed under provisional liquidation on August 7, has been under the spotlight for poor administration, allegations of asset stripping and leaving 1 746 employees unpaid for seven months.

It was sold to Goldrich Holdings for R70 million, but the deal went wrong as the company missed payments and dumped its employees.

“Things are bad. All this time they have relied on UIF, which entitles you to funds for six months. Most of the employees have been told that at the end of month they will receive their last monies,” Kgoroyaboco said.

He said although it was not much, the UIF went a long way to cushioning the non-payment of the salaries. For example, the minimum amount from the UIF for an official was R4 500, it was R3 000 for mid-category employees and R1 900 for low-category employees.

About 6 000 people live in the Blyvoor village community, where 1 000 houses were recently sold to Double D and G Building Constructors, a developer for about R17 000 each.

Residents were expected to pay R3 500 monthly towards rent, water and electricity, but none could afford to do so because they were unemployed and had been unpaid since September, Kgoroyaboco said.

Incidents of crime have spiked and the mine is in chaos amid the influx of illegal miners who fight against private security firms that have been hired to protect the assets.

Liquidators of the mine are embroiled in litigation with the business rescue practitioner of Blyvoor.

The liquidators have also interdicted Goldrich from selling the Blyvoor assets, including scrap metal.

Blyvoor was previously owned by Village Main Reef and employed 2 000 people.

Goldrich directors comprise the politically-connected Aurora Empowerment Systems, which managed the liquidated Orkney and Grootvlei mines.

The Aurora mines were stripped of their assets and employees were never paid their money.

Goldrich chairman Thulane Ngubani was also a director at Aurora, and the mining firm is advised by Fazel Bhana who also advised Aurora.

The new Blyvoor owners promised to employ 400 people for the start of the operations, but have failed to do so.

There were a lot of illegal miners who had shifted from stealing gold to robbing people in their homes. And cases of cable theft had also increased, Kgoroyaboco said.

The pumping of water by AngloGold Ashanti was stopped due to the failure by Goldrich to pay R5m a month as they had committed to do for these services.

According to Cosatu’s statement on Friday, the liquidators are now pursuing court action to cancel the sale agreement and have filed two urgent applications in the high court.

The applications seek, firstly, to nullify the sale agreement with Goldrich and to evict it from the mine premises, and secondly, to interdict Goldrich from removing and selling any assets from the mine.

Residents told the Financial Mail that they heard shooting at night and at least 20 people were reported to have been killed in clashes between “zama-zamas” and security staff employed by Goldrich.

Cosatu said on Friday that it could not tolerate the looting of the country’s mineral wealth and that mines should be nationalised.