The board of directors of Stilfontein Gold Mining Company Limited have resigned en masse following the failure by AngloGold Ashanti to nominate new directors to the Stilfontein board.
On Thursday, the board of Stilfontein, comprising Roger Kebble, Brett Kebble, Hennie Buitendag and Gordon Miller, offered AngloGold Ashanti the opportunity to acquire control of the board of Stilfontein. This follows moves by the Department of Water and Forestry (Dwaf) and Anglo to have the Stilfontein directors held in contempt of court because Stilfontein failed to comply with an order to contribute to pumping costs in the Klerksdorp, Orkney, Stilfontein and Hartebeesfontein (Kosh) basin.
“We told AngloGold Ashanti that Stilfontein is a dormant company without assets and that it could not comply with the order. We offered board control to Anglo and gave it until 2pm today to respond. We received no response and therefore had no option other than to resign with immediate effect,” said former Stilfontein chairman, Roger Kebble. “I wish to stress that our legal team told us that to continue in office would have been reckless behaviour for which there are severe penalties.”
Kebble said that it made sense for Anglo to take control of Stilfontein for both safety and commercial reasons. The core of Anglo’s operations in South Africa is situated downstream of Buffelsfontein and Hartebeesfontein mines. Known as the Vaal River operations, they represent assets worth R11- billion and employ around 10Â 000 people underground.
“Should pumping cease for any reason, it would have catastrophic, irreversible consequences for the Vaal River operations. In terms of the Mines Health & Safety Act, if an unacceptable risk is identified then the Department of Minerals and Energy is entitled to close the operations until such time as the danger has been unequivocally averted. It is therefore in the best interests of Anglo employees and shareholders to ensure that it has some form of control over the pumping operations at Stilfontein and that is why the directors of Stilfontein offered them this opportunity,” said Kebble.
Kebble said that Anglo and Dwaf’s decision to oppose Stilfontein’s liquidation application had left them with no option other than to resign because Stilfontein is unable to pay the estimated R1,8-million a month the Johannesburg High Court ordered it to contribute to pumping costs in the Kosh basin.
“To insist that Stilfontein pay a portion of the costs ignores two important facts,” said Kebble. “Firstly, Stilfontein is a dormant company which ceased underground mining in 1991 and, secondly, the contractual obligation to pump at Stilfontein has rested with Hartebeesfontein ever since.
“This pumping agreement was entered into well before any of us joined the Stilfontein board. We simply continued to administer the process, at no gain to ourselves, but for the benefit of all the operators in the entire Kosh area, notably Anglo,” said Kebble.
Kebble said that by resigning the directors also laid to rest allegations they might influence Stilfontein decisions to favour the interests of Simmer and Jack, on whose board they serve.
According to Gordon Miller, chief executive of Simmer and Jack (SIM), the allegations were unfounded and mischievous but could be damaging to Simmers’s offer for the former North West mines abandoned by DRDGold in March.
“By resigning, we have eliminated these nasty rumours because we no longer have any control over Stilfontein decisions,” said Miller.
Simmers is currently in negotiations with the liquidator of DRDGolds former North West assets to re-open Buffelsfontein and Hartebeesfontein. It proposes creating 3600 new jobs and employing 750 contract staff. ‒ I-Net Bridge