Miners get jobs back | Fin24
 
Loading...

Miners get jobs back

Jun 04 2017 06:01
Sizwe Sama Yende

Johannesburg - Hundreds of people stand to be employed as the Lily and Barbrook mines in Mpumalanga are due to resume operating 15 months after they were forced to shut down because of financial distress.

This is thanks to a merger between the two sister mines’ proprietor, Vantage Goldfields, and Canadian company Galane Gold.

Lily Mine employed 900 workers, while Barbrook employed 100 before the operations were mothballed.

The mines were put under business rescue last year and it has been a struggle to raise R300 million in investment to restart operations and retrieve the remains of three workers who were buried when the entrance of Lily Mine collapsed on February 5 last year.

Another Canadian company, AfroCan Resources Gold, reneged on its agreement to bail out Vantage Goldfields with R172 million last year.

The Mpumalanga government’s parastatal – the Mpumalanga Economic Growth Agency – had also been planning to take over the mine should Vantage Goldfields fail to attract private investors.

Business rescue practitioner Rob Devereux said Vantage Goldfields – an Australian company – and Galane had signed a letter of intent and had until June 16 to sort out outstanding issues pertaining to the merger.

Devereux said both companies were this week discussing plans on how to restart operations.

“The companies will merge into a bigger group and shareholding will be 50-50,” Devereux said.

He said the rescue business plan of Lily and Barbrook mines would be taken and implemented as it was.

Galane Gold has a footprint in Africa. It owns the Galaxy Mine in Barberton and Mupane Mine in Francistown, Botswana.

Galane CEO Nick Brodie said the merger was a significant step for Galane’s goal to reshape the company into a long-life and low-cost operation that could produce positive results for investors across commodity circles.

“The Vantage mines are located within 30km of our existing operations at Galaxy Gold and obvious synergies exist between the two operations. We hope to leverage these synergies to create an operating asset in the Barberton area which, together with the company’s Galaxy property, is expected to result in a combined resource exceeding 5.8 million ounces, production of over 160 000 ounces per annum and an all-in sustaining cost of less than $900 (R11 800) per ounce,” Brodie said.

Brodie said that a plan had been agreed with Vantage management and Devereux that would see operations recommence within 90 days of the completion of the acquisition.

The mines sustained the economy of Louisville village and their closure had negatively affected other businesses in the area, which relied on income the workers earned from the mines.

In order to reopen Lily Mine, R200 million was needed to drill a new shaft.

Since the collapse, the remains of the three workers – Pretty Nkambule, Yvonne Mnisi and Solomon Nyirenda – have not been recovered. They were working in a container office when it collapsed and sank down.

Barbrook was placed under business rescue after it had to carry an extra burden to absorb some of Lily Mine’s employees, as well as additional costs following the disaster.

Its financial situation worsened when unions and community members prevented workers from digging gold.

According to Devereux’s business rescue plan, Lily Mine would return to profitability within eight months once an access decline was drilled.

There are 4.9 million tons of ore reserves that could be mined for the next 11 years at Louisville.

Meanwhile, the families of the deceased have each been paid R200 000 compensation as promised by Mineral Resources Minister Mosebenzi Zwane after the disaster last February.

Seventy-five workers who survived the accident were promised R50 000 each.

They have been paid R10 000 so far, while the department is raising more funds.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

lily mine  |  jobs  |  mining
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

#MINIBUDGET2019

Struggling power utility Eskom will take centre stage at this year's mini budget
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote

Loading...