William Boot
A secret commission of inquiry into the collapse of Namibia’s copper mining industry wrapped up its proceedings in Windhoek this week and is expected to move on to Johannesburg.
It was established to investigate the role of Goldfields SA, owner of the Tsumeb Corporation Limited (TCL), in the closure of all four of Namibia’s copper mines in May.
The inquiry, set up after a Swiss client petitioned the Namibian High Court in terms of Sections 417 and 418 of the Companies Act, was heard by retired Namibian Judge Harold Levy, who was appointed to investigate possible criminal negligence on the part of TCL and Goldfields’ local affiliate.
TCL, one of the oldest mining establishments in Namibia, set off a shockwave through the local economy when it filed an urgent insolvency application in May without any warning.
The move, which left about 2 000 workers unemployed, drew accusations from the Namibian government that TCL had acted in bad faith by not consulting the Ministry of Mines and Energy before abruptly destroying Namibia’s copper mining industry.
Citing collapsing world prices for copper, falling output, a failed smelter operation, difficult mining conditions and strike-induced losses, TCL’s managing director Hugh Robinson said the company’s overdraft of R30- million had already been exceeded and further advances refused.
And despite a cash injection from its parent company, Goldfields SA, Robinson testified he saw no hope of recovering mounting losses or paying back any of TCL’s creditors.
After some delays, a provisional winding-up order was granted, despite strenuous objections from the Ministry of Mines and Energy and, in particular, the Mineworkers’ Union of Namibia (MUN).
Three main creditors have been listed, but it was the claim submitted by Swiss-based Novarco AG, an international commodities broker, that raised the most eyebrows and led to the June 30 appointment of the commission of inquiry.
Although proceedings remain secret, sources in the industry indicated that Novarco had sent a consignment of Chilean copper ore to Tsumeb for treatment at its new R40-million smelter.
TCL’s insolvency application appeared to have caught Novarco by surprise, and indications were the company had asked the court to help it recover the estimated R30-million worth of treated copper.
The commission had summoned every current and past director and manager of both Goldfields SA (Namibia),TCL and its bankers to testify.
With reporters threatened with contempt-of-court action, it proved difficult to ascertain even the general character of proceedings before Levy.
The MUN, which had closed down all the mines in a crippling wage-related strike in September last year, made it clear, however, that this insolvency was an attempt to break organised labour’s back.
The union may have a point – Goldfields SA last month reported a sharp increase in operating profit, despite its having advanced R45- million to pay for retrenchment packages for all 1 960 TCL workers.
Headline earnings for the June quarter improved to 19c per share against a loss of 49c a share for the previous quarter.
MUN secretary general Peter Naholo also indicated that the union intended bringing a huge claim, thought to be in excess of R100-million, against Goldfields SA for pension contributions the management claimed were overpayments.
The Ministry of Mines and Energy has indicated there may be several buyers for the four copper mines, three of which are in and around Tsumeb and one east of Windhoek.
But the court order granted to Novarco also provided for a similar inquiry in South Africa, and it may be some time before Namibia’s copper industry fires up its smoke stacks again.