Johannesburg - The Industrial Development Corporation (IDC) said it had received an application for R250 million funding from Vantage Gold Fields, the Australian owners of the Lily mine where three mineworkers have been trapped in an underground container and 900 employees face the possibility of retrenchments.
Mandla Mpangase, the spokesman for the IDC, said: “We have been approached both by Vantage Gold and the business rescue practitioner for funding. However, we don’t have an existing exposure in the group.
“The request for funding – of R250m – will be considered based on economic merit of the proposed shaft and on the business rescue plan,” he said.
The mine, which was placed in business rescue, faces an uphill battle as previous rescue efforts have failed. It agreed to sink a 500 metre decline shaft in a latest bid to get to the container.
Trade union Solidarity this week called for the government to intervene at the mine.
Solidarity general secretary Gideon Du Plessis warned that the consequences of the mining accident would be even more tragic if the 900 workers, each with an average of six to 10 dependents, were plunged into poverty due to lay-offs.
“If everything now comes to a standstill so that exclusive funding could be found to recover the bodies and no further funding and support is available to create an alternative flow of income and to protect jobs, 650 permanent employees and about 250 contractors will lose their jobs,” Du Plessis said.
Retrenchment
Du Plessis said the retrenchment process could be averted if funding was found for three major projects.
“The neighbouring Barbrook mine, part of the same group that owns the Lily mine, submitted an application to the IDC for further development at the Barbrook mine, thereby increasing gold production, which would offer 200 job opportunities to workers of the Lily mine,” Du Plessis said.
“The Lily mine has recently also submitted a second funding application to the IDC to sink a shaft to gain access to the shipping container in which the missing employees are believed to be trapped. This process will create a further 200 job opportunities for the Lily mine’s employees.”
Last week, Lily mine employees, trade unions and creditors, participated in business rescue consultations as the mine faced an uphill battle after the rescue missions had failed owing to dangerous conditions hampering rescue operations.
Mineral Resources Minister Mosebenzi Zwane said he was hopeful the container could be retrieved, while an investigation into the accident would help South Africans close the painful chapter.
“If there was a mistake on the part of the employer, we will not hesitate to take steps. We are saying to the people of South Africa let us stand with the family,” Zwane said during the New Age Business Breakfast.
“Once the funding is in place, development of the shaft will start immediately.
“The mine has a significant ore reserve, which will last in excess of 10 years, which makes it an attractive investment,” he said.
Neither Vantage Gold Fields nor the business rescue practitioners were immediately available for comment.
BUSINESS REPORT