Lily Mine near Barberton, where three workers died after an underground collapse, has since been closed and workers await wages in arrears and retrenchment packages. Picture: IHSAAN HAFFEJEE
Lily Mine near Barberton, where three workers died after an underground collapse, has since been closed and workers await wages in arrears and retrenchment packages. Picture: IHSAAN HAFFEJEE

Few people in the Mpumalanga town of Barberton believe that a third attempt to buy and resuscitate the collapsed Lily Mine will come to fruition.

On February 5 2015, the struggling gold mine came to national attention. Three employees — Yvonne Mnisi, Pretty Nkambule and Solomon Nyirenda — were working in a container on the surface when the main crown pillar supporting access to the mine collapsed. The container — used as a lamp room — plunged into the deep sinkhole and was buried under tonnes of rock.

All the other people working in the mine were saved, but after two weeks and two more ground collapses, attempts to rescue the three had to be abandoned. It is not known whether they died at once or survived and were hoping for help days after the collapse.

The mine attracted media attention and visits from politicians such as former mineral resources minister Mosebenzi Zwane and his deputy, Godfrey Oliphant, for months after the disaster. Zwane and Oliphant made pledges including that rescue efforts would continue, families would be compensated and funding for the mine would be sought from the Industrial Development Corporation (IDC). Compensation of R200,000 per family was paid in 2017, but the other promises have remained unfulfilled.

At the 2018 Mining Indaba, Zwane said the investigation of the collapse had been completed and a report would be submitted to his department "within weeks". Reports on mine fatalities are never made public.

The mine’s owner, Vantage Goldfields, applied to put Lily and later its sister mine, Barbrook, into business rescue. The hundreds of workers who lost their jobs are owed wages which are in arrears and retrenchment packages. Businesses that supplied the mine are still waiting for payments.

The resentment and hardship that followed Lily’s closure have spread to neighbour Pan African Resources, owner of the far larger Barberton Mines complex, which has been experiencing intermittent labour and community disruptions.

There are two offers made for Lily — by AfroCan Resources and by Galane Gold — but neither reached fruition. Late in 2017 a little-known entity, Siyakhula Sonke Empowerment Corporation (SSC), emerged as a new bidder for Vantage’s two assets.

SSC’s founder and CEO, Fred Arendse, was head of transformation at Anglo American Platinum a decade ago.

The company has several investments including a 26% stake in Redpath Mining, a well-known firm of mining contractors, and full ownership of industrial relations consultant uMoya Human Capital.

Arendse says the offer to buy 74% of Vantage Goldfields would be on condition that SSC raises sufficient funds to take it out of business rescue and reopen both mines. He says the IDC has been approached for finance but declines to say how much SSC has offered to pay and how much it needs to borrow.

About R139m is needed to pay creditors, R100m to develop a new access to the mine and about R100m for working capital, he says.

But the business-rescue practitioner for Lily and Barbrook, Rob Devereaux, and the Barbrook creditors’ committee are at odds over the next step. The creditors have applied to put the mines into provisional liquidation but Devereaux is opposing this, supported by Arendse.

Repeated attempts to contact Devereaux were unsuccessful.

Johann Grove of Grove Deysel and Partners, who represents the creditors, says the application for provisional liquidation is set down for May 10.

"We have no quarrel with the business-rescue practitioner, but he has been unable to secure any buyers with a viable plan to revive the mine," Grove says.

The reason creditors want a provisional liquidation is that it will enable a simplified transaction. A single liquidator will be appointed. As long as it is in provisional, rather than final, liquidation the mines will not lose their licences
Adv Dwaine Koch
Barbrook creditors’ committee

"We have heard no details of SSC’s plans. So we cannot see that the court can rule other than to grant our application, which is for provisional and not final liquidation and still allows the liquidators to find a buyer.

"We believe there are small-scale experienced miners who would be interested in taking over Lily but if no buyer is found, the assets will have to be sold to pay creditors. There is a large sum owing, about 30% of which is for employees, and creditors have waited two years already."

Adv Dwaine Koch, chairman of the Barbrook creditors’ committee, says the creditors voted against the business-rescue plan for the mine as it was based on outdated information and contained technical errors. Although Lily’s business-rescue plan was passed, he encountered similar problems.

In the plans he saw, it was stated that R320m was needed to pay the creditors of Barbrook and Lily and restart operations. That appears to be the plan on which the SSC is basing its offer and is using to approach the IDC for funding. But he has seen no indication that the IDC is willing to lend to SSC.

A spokesman for the IDC confirms it has received several verbal inquiries as well as a formal application for funding from the SCC Group.

"However, we have been unable to proceed with the assessment of this application due to outstanding information requested from the applicant."

Koch says the reason creditors want a provisional liquidation is that it will enable a simplified transaction. A single liquidator will be appointed. As long as it is in provisional, rather than final, liquidation the mines will not lose their licences.

He says the creditors will consider any offer that promotes full payment to creditors and former employees and that leads to the reopening of both mines — and the sooner the better because the infrastructure deteriorates while the mines are at a standstill.

Koch says he believes there are potential investors for the whole of Vantage — he is not one and does not represent any of them — but they are put off by the complexity of the situation.

The Association of Mineworkers and Construction Union is the majority union at Lily, but its views on the latest offer could not be obtained as its local organiser, John Sibiya, did not respond to calls and messages. The National Union of Mineworkers said in a recent statement that it was opposed to liquidation.

Clifford Smith, regional organiser for Solidarity, which has about 50 members waiting for salary and retrenchment payouts, says he hopes SSC can raise the funds to buy the mine, but the union is concerned that SSC has not communicated with the union.

The clamour to retrieve the bodies buried in the container appears to have subsided since it was obvious that making this a condition of sale was deterring potential bidders. It would cost tens of millions of rand and probably jeopardise the lives of people sent into unstable ground, while the chances of being able to retrieve the container are uncertain.

In the meantime, the suffering is being borne by former workers above ground with no hope of jobs or money until the mines reopen.

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