Chinese investors to meet Aurora

Photo: Reuters.

Photo: Reuters.

Published May 19, 2011


Chinese investors would visit South Africa next week to meet with the management of Aurora Empowerment Systems in a bid to finalise a funding deal to the tune of $100 million (R698m), the local mining company said yesterday.

Chinese state-owned mining firm Shandong Gold, which is listed in Beijing and Shanghai, planned to acquire a 65 percent stake in the troubled Aurora, Pamodzi liquidator Enver Motala told MPs on April 13. Aurora bought the Grootvlei and Orkney gold mines from liquidated Pamodzi Gold in 2009.

On the sidelines of a confidential enquiry at the Pretoria High Court this week, Motala said a delegation from China would arrive next week.

Motala was one of five joint liquidators of Pamodzi who were grilled by the master of the high court on its role in the liquidation of the mines.

Tlali Tlali, the spokesman for the Department of Justice, said he was not in a position to share case details. He said that section 381 of the Insolvency Act provided for a confidential inquiry into matters of this nature. The proceedings were not open to the public, only to those who were served with court papers.

“We will consider sharing information on this matter in due course


Thulani Ngubane, a director at Aurora, said the delegation would “discuss issues around the deal”, but declined to divulge further details.

“We are at a crucial stage, and I would not like to say anything that would upset investors. I’d love it if the funding could be resolved by yesterday, but it’s never going to be like that,” he said.

National Union of Mineworkers (NUM) spokesman Lesiba Seshoka said Aurora was lying about the Chinese investors. “This is not a new line, it’s recycled. The Chinese have been coming to meet with Aurora for two years, but to do what? They will do a due diligence, while the status of the assets has deteriorated and you require trillions to invest in Aurora.”

Despite having no mining track record and only a promise of funding, Aurora was named the preferred bidder for the Pamodzi mines. The company is headed by President Jacob Zuma’s nephew Khulubuse Zuma, Zuma’s lawyer Michael Hulley and Zondwa Mandela, the grandson of former president Nelson Mandela.

Aurora has until August 16 to raise R600m for both the mines and has struggled to maintain the mines.

The company ran into serious financial problems, which resulted in the non payment of mineworkers’ salaries. Illegal miners were killed during a scuffle with security guards at Grootvlei last year.

Trade union Solidarity has sought the liquidation of the company, but Aurora subsequently partly paid the miners’ salaries. Solidarity demanded Aurora fork out R4.6m in outstanding salaries for workers.

Next week, the portfolio committee on mineral resources will question Aurora as part of a fact finding mission, which began last month. - Dineo Matomela

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