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Unions unhappy as Lily Mine goes into business rescue

Apr 11 2016 13:26
Hanti Schrader, News24 Correspondent, and Fin24

Barberton - Unions have expressed unhappiness that Lily Mine has gone into business rescue in a bid to resume operations, while efforts to find three trapped miners remain suspended.

Part of the coal mine, in Louisville, near Barberton, collapsed on February 5. Three employees - Yvonne Mnisi, Pretty Nkambule and Simon Nyerenda - were in a lamp room housed in a shipping container on the surface. It disappeared into a sinkhole about the size of a rugby field and was buried under tons of rock. Seventy-five miners who were underground at the time escaped unhurt and made it to safety. Two subsequent collapses at the mine have halted all attempts to find the three.

Michael McChesney, CEO of the mother company, Vantage Goldfields, said the decision to apply for business rescue announced on Thursday had not been easy. He said he had been working in the Barberton mining area for the past 30 years and developed a sound relationship with the Lomshiyo community, from which 90% of the 800-strong workforce was drawn and where its broad-based black economic-empowerment partnership was focused.

"It was a very difficult decision for all under the circumstances, but how many other businesses would recover from a 'force majeure' like the failure on the 5th February 2016? We are committed to surviving. Our mine has a good future and we, as well as the region, cannot allow this tragedy to stop us from growing and prospering. That Lomshiyo valley needs the mine to survive," he said.

WATCH: Inside Lily Mine search operation in February

With the business rescue registered and in place, creditors had to give the mine time to settle their debt.

Workers were not sure if they would get paid at the end of April. Since February they have had to survive on about a quarter of their salaries, without bonuses or overtime payment.

"We are, as has been witnessed, a family. No one wants to be forced to look for work outside the area in which we all love to live. I just wish someone would step up to the plate and support the mine quickly," McChesney said.

The mine’s operations director, Mike Begg, said they had also asked for a loan from the Industrial Development Corporation. 

Num approaches Presidency over unhappiness

Unions expressed unhappiness over the mine going into business rescue.

The National Union of Mineworkers (Num) said on Monday that it is “extremely disappointed about the decision  by Lily Mine to place the mine on a business rescue administration”.

"We reject the management decision to put the mine on a business rescue administration,” Joseph Montisetse, Num deputy president, said in a statement. “Why would the Department of Mineral Resources (DMR) agree to this decision?

“This company is running away from its responsibility to rescue the lives of the black Africans who are still trapped underground,” he said. “How can a company that is responsible for such a horrible tragedy be given a leeway to escape the responsibility.”

Num said it has asked the Presidency to intervene and stop the business rescue. “We believe that the company must first take responsibility to rescue the trapped mine workers,” he said.

Solidarity criticises process, but realises this as only route

Trade union Solidarity said while it was unhappy with process, Lily Mine’s application for business rescue is the only option left for the mine and its employees.

Solidarity General Secretary Gideon du Plessis criticised the mine’s management because the trade union was not informed of the business rescue application beforehand.

“Management previously undertook not to initiate any process that would affect workers’ job security before informing Solidarity,” he said in a statement. “Management already applied for business rescue on 4 April without informing Solidarity.”

However, Du Plessis said an advantage of the business rescue application was that all trade unions would immediately be considered to be interested parties in the process.

“Therefore it now also gives Solidarity direct access to our members – a right which the company has denied our members to date,” Du Plessis said.

All about the workers

Solidarity’s main priority now is to protect its members’ jobs.

“We shall also present the principles of the Department of Labour’s retrenchment-training-scheme as a possibility to the business practitioner in order to protect jobs. In terms of that, employees with transferable skills will also be empowered until the mine hopefully can resume full production again,” Du Plessis said.

In terms of the business rescue process, the powers of the directors and management are restricted and, for the time being, the business rescue practitioner will take responsibility for the management of the company.

“Once the business rescue practitioner has been appointed, Solidarity will seek to establish a constructive relationship with the practitioner in order to initiate a joint attempt to make the mine sustainable again and to protect jobs,” Du Plessis said.

Solidarity says it will liaise with the Department of Mineral Resources to advance the hearing investigation into the reason for the mine disaster so that the trade union can disclose the information regarding the cause of the mine’s collapse as soon as possible.

“Currently several employees are being victimised, accused of being whistle-blowers, and threatened. Whistle-blowers are protected by law and the company must immediately cease its witch-hunt and victimisation, or Solidarity will be forced to take appropriate legal action against individuals in the company,” Du Plessis said.

solidarity  |  num  |  lily mine collapse  |  business rescue


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