Lily Mine's workers eat into their savings while bids to secure a rescue deal go on
About 300 Lily Mine employees resigned in July in a desperate bid to get their provident funds and unemployment insurance fund. The employees had not been paid for three months and, for two months prior to that, got only 60% of their wages.
Rob Deveraux, the mine’s business rescue practitioner, said the decision to ask employees to resign was a “last-resort” move.
The resignations of 75% of the workforce comes seven months after the fatal underground collapse at the Mpumalanga mine.
Yvonne Mnisi, Solomon Nyarenda and Pretty Mabuza were trapped in a metal container that was buried nearly a kilometre underground when part of the mine collapsed in February.
Mineral Resources Minister Mosebenzi Zwane promised their families compensation of R200 000 each, and R50 000 to each of the 75 survivors, but they have received nothing. He left it up to the company to figure out where the funds would come from.
Nyarenda’s brother, Kennedy, said talks had been unsuccessful, claiming that management was “hiding things”.
“Nothing is happening. I met the management last week Friday but they have got nothing to tell us at all. We have not even reached the stage of getting compensation.”
After the collapse, Lily Mine was placed under business rescue. The company paid 60% of workers’ salaries in February and March and still owes its 400-strong workforce salaries and allowances for April, May and June.
Deveraux said the “last-resort” decision was made because the mine has no income. “The money we raise [for a new investment] will settle salaries; that’s why we offered packages to allow [employees] to access the money [from their provident and unemployment insurance fund].”
The mine’s parent company, Vantage Goldfields, has absorbed 100 of Lily Mine’s mineworkers in the Barbrook Mine, its neighbouring operation. It also plans to employ 50 mineworkers to reprocess a mine dump.
The remaining staff will be rehired if the mine receives the R20-million it needs to rebuild a decline shaft and recover the container, a move that is considered dangerous.
“As and when we require staff, we employ them on the same terms and conditions [as we did] in the past. We can only access the container once we get the new investment. The area is extremely dangerous and the ground is still very unstable,” Deveraux said.
The mine has been paying the salaries of the mineworkers who were trapped to their families.
Nyarenda said he’s desperate to receive his brother’s body because official documentation is being delayed and the family wants closure.
“You can’t declare them as being dead because home affairs have to approve it. We don’t have a death certificate at home affairs. Lily Mine and home affairs needs to declare them as dead … But we have not yet had a funeral,” says Nyarenda.
Earlier this year, Vantage Goldfields was drawn into negotiating a potential investment of more than R170-million by Canadian Gold firm AfroCan Resources, whose chief executive Brian Barrett reneged on the deal after his track record of failed investments was exposed.
“AfroCan strung us along and probably set us back three months. There’s no financial loss but a timing loss. There’s still a good life of mine at Lily [Mine]. There’s still value so we are hoping a reasonable investment will come along soon,” Deveraux said.
A source participating in the compensation talks said the delays have also caused tensions. “There are additional family members who are claiming money. Children are involved and it’s a very delicate situation. There are very difficult discussions about how we will move forward. Everyone wants to get their hands on the money.”
Trade union Solidarity has placed the blame for the delay in securing funds to rebuild the decline shaft on Zwane’s “irresponsible” statements.
“This is a major human disaster unfolding simply because of short-sightedness by politicians, especially Minister Zwane,” said Solidarity’s general secretary, Gideon du Plessis.
“The one and only solution to find an investor did not materialise because Zwane publicly said the three bodies need to be retrieved before mining can resume. Now investors are not interested. They want to invest in mining, not the recovery operation.”
He also raised concerns about the Lily mineworkers who took a salary cut instead of resigning. “Those who are privileged to still have a job are in a very difficult financial position because they are only receiving 60% of their salaries – and there are a lot of couples working there … so there’s a huge chunk of their salaries gone.”
There appears to be a new deal on the horizon, but Deveraux would only describe the status of talks as “positive”, particularly following the AfroCan debacle.
Should this investment materialise it will include the compensation payout of R4.4-million that is due to the families and workers who survived.