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A tenth of Alexkor's expenditure went to directors - Gordhan

Jul 04 2018 13:42
Khulekani Magubane

Nearly 10% of state-run diamond miner Alexkor's R225m expenditure between April 2012 and March 2017 went towards paying directors, Public Enterprises Minister Pravin Gordhan has told Parliament. 

Weeks after arriving at the Department of Public Enterprises, Gordhan announced sweeping changes at state-owned entities such as Eskom, South African Airways and Denel, among others. 

During his budget vote in May, Gordhan said forensic investigators would look into allegations of wrongdoing at Alexkor related to its contracts, the transparency of its sales and its marketing of diamonds.

In a written reply to a parliamentary question, Gordhan said that, of the R225m the state-owned diamond miner spent between 2012 and 2017, R24.3m went towards directors’ remuneration.

"[These include] fees paid to directors serving on both Alexkor and Alexkor RMC PSJV (Alexander Bay) boards," Gordhan said.

The lion's share of the money went towards "town maintenance", according to Gordhan’s reply. The company spent R47m on paying salaries, as well as corporate and operational costs.

In the reply Gordhan said Alexkor was mining in Alexander Bay, prior to its Pooling and Sharing Joint Venture being established, in terms of the deed of settlement. The joint venture is an arrangement in which Alexkor owns 51% and the Richtersveld community owns 49%.

As a result of the joint venture operations commencing, the mining operations cost R14.8m. Related revenue against the mining operating cost was R27.4m.

"The deed of settlement directed that once the township had been established, the municipal engineering services are to be upgraded and Alexkor is to hand over the municipal services to the Alexander Bay Municipality.

"However, that has not yet occurred. Alexkor has assumed the responsibilities to maintain the Township of Alexander Bay as if they are a municipality," said Gordhan’s reply.

A discontinued operating cost of R9.7m relates to the cost of transferring the farming operations to the community, he said.

Gordhan added that the implementation of Phase 1 of rehabilitation of historically disturbed areas cost R41.3m. Alexkor spent R1.6m on bursaries in the same period.

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