OWN CORRESPONDENT, Johannesburg | Thursday 9.35pm
THE Johannesburg High Court on Thursday court put struggling East Rand Proprietary Mines (ERPM) into final liquidation, forcing the mine to cease operations immediately, ERPM’s liquidators said on Thursday.
“ERPM is now in final liquidation. The mining operations have ceased today due to a lack of funds. The workers will be out of work tomorrow,” Laurence Pereira, a spokesman for the liquidators said. ERPM, one of the country’s oldest gold mines, fell into provisional liquidation in early July after warning that record low gold prices could force it to close, threatening 4500 jobs.
The Johannesburg High Court on Thursday rejected a bid by the government and the National Union of Mineworkers (NUM) to keep the mine operating and try to turn it around.
The government and union had requested that the mine be put under judicial management which would have placed a moratorium on the mine’s creditors.
ERPM is one of the highest-cost gold producers in South Africa and was losing about R7-million a month.
It is the country’s first marginal mine to succumb to record low gold prices after Britain’s announcement in May of plans to sell more than half its gold reserves in the next few years.
Gold was trading around $258 an ounce on Thursday, well below ERPM’s cash operating costs of about $300 an ounce.
The government, which holds an 18% stake in the mine, has poured millions of rand into water pumping subsidies into the mine in recent years.
But the cash-strapped government has refused to give ERPM a bailout package.
The government and NUM had been working on a rescue plan that would have closed the mine’s costliest shaft and devoted men and resources to other more profitable areas of the mine.