A lot of people tell Fred Arendse he is crazy to take over Vantage Goldfields — a company that was forced into business rescue in 2016 after a devastating accident, resulting in three deaths, at its Lily mine in Barberton.
"They say ‘you are either stupid, or clever or have a lot of courage’," says Arendse, founder and CEO of the Siyakhula Sonke Empowerment Corp (SSC Group), which plans to revive the business.
Arendse started his business 13 years ago in his garage, around a kitchen table sponsored by his wife. The vision was, and remains, that the group will become a black Anglo American, a company in which he was schooled.
The youngest of seven children, Arendse grew up in Tulbagh in the Western Cape. He studied human resources and left the Cape, stepping onto a plane for the first time in 1995, when recruited to JCI’s coal division. The company soon unbundled, and from Witbank, Arendse was recruited to Anglo Platinum in Rustenburg where, as a 22-year-old HR manager, he became the company’s youngest manager. He was promoted every 18 months until in 2002, aged 30, he became head of transformation at Anglo Platinum.
It was in 2005 that Arendse resolved to build his black Anglo American, but with a difference.
"There are a lot of things I love about Anglo but there are some I hate as well," Arendse says. The politics of a big corporate is one — understandably for Arendse, who was charged with a conflict of interest. His name was cleared but Arendse couldn’t shed the bad taste it left.
"That launched me. I think it was probably God’s plan because I was very comfortable. My job was to build and improve people’s lives, and I couldn’t do it in Anglo; it was too small in terms of impact … when you work for a big corporate you can’t change things."
He put his pension into his business, SSC, which started as an advisory company for transformation and conversion of mining rights consulting.
The first paid job, a mineral-rights audit, came from Northam Platinum, and in the nick of time as funds had begun to run low and Arendse had begun to grow discouraged. Upon payment, he celebrated with the largest steak on Spur’s menu.
More work rolled in and the company grew. "In 2008, when the financial crisis hit, we had some money. So we bought an HR company, we bought a fire-detection and a construction company, we started a medical services company," says Arendse.
The SSC strategy is to build capacity in the mining value chain so that the group can provide a suite of services to a mine. Now that SSC has bought Vantage Goldfields and its Lily and Barbrook mines, it plans to put that model to the test.
Despite the hardships faced by SA gold mines, Arendse says the two operations can make a profit; they are low grade but shallow and so produce gold at the cheapest dollar cost per ounce in Africa.
To acquire Vantage, SSC took a R190m loan facility from the Industrial Development Corp as part of its 100 black industrialists programme.
Looming large, however, is the aftermath of the 2016 Lily mine accident, when a container with three employees inside plummeted in a rock fall, trapping the three underground. Arendse makes no promises about retrieving the bodies of the three employees — Yvonne Mnisi, Pretty Nkambule and Solomon Nyirenda. When boots are on the ground next year, an assessment will be made on what can be done in consultation with the families, he says.
On the business side, it’s all about risk and reward. "We have no illusions that this is going to be easy. But there’s a calling on my life and I must do it."