Lily Mine gets a second wind

Three attempts to secure the R300-million to pay creditors and restart the mine have previously failed and the mine’s creditor’s applied for the liquidation of Vantage Goldfields. (Siphiwe Sibeko/Reuters)

Three attempts to secure the R300-million to pay creditors and restart the mine have previously failed and the mine’s creditor’s applied for the liquidation of Vantage Goldfields. (Siphiwe Sibeko/Reuters)

The Portfolio Committee on Mineral Resources has announced that operations at the beleaguered Lily Mine are set to resume in November 2018.

In a statement released on Wednesday, the committee said it welcomes a report by the department of mineral resources recommending the reopening of the mine.

Lily Mine, near Barberton, has not been operational since a surface collapse in April 2016, during which three workers — Solomon Nyerenda, Pretty Nkambule and Yvonne Mnisi — died after they were trapped 800m underground.

After the collapse, mining stopped, and maintenance, salary and expenses for the search-and-rescue operation almost drained the mine’s financial resources, resulting in it being placed under business rescue. In its initial rescue plan, the company, Vantage Goldfields, said it required R300-million to pay for maintenance and to settle its debt.

READ MORE: Push to liquidate ill-fated Lily Mine

Three attempts to secure the R300-million to pay creditors and restart the mine have previously failed and the mine’s creditor’s applied for the liquidation of Vantage Goldfields.

But, after minerals and investment company Siyakhula Sonke Empowerment Corporation (SSC) signed a R190-million loan agreement last month to acquire a 74% stake in Vantage, the liquidation of the company was postponed.

READ MORE: D-Day looms for Lily and Barbrook mines

SSC chief executive Fred Arendse announced on May 4 that the only outstanding matter in the acquisition was the approval by Mineral Resources Minister Gwede Mantashe.

The portfolio committee’s recent statement said it has since been briefed by the director-general of the department, Thabo Mokoena, and heard that business rescue practitioners have secured a buyer who is in the process of acquiring ownership of the mine.

“Although sceptical, the committee believes that resumption of operation at the mine will not only bring closure to the families of the three missing workers, but will also bring about 600 workers back to work,” said the committee’s chairperson, Sahlulele Luzipo.

Luzipo warned that if the department is not in control of the situation, investors could come and go without recovering the bodies of the workers who perished in the 2016 collapse. “Mine owners have a tendency to abandon operations halfway, claiming that they underestimated cost implications,” he said.The statement also said the committee was briefed on the department’s inspection of Optimum Coal Mine.

According to a submission from the department of mineral resources to the portfolio committee, Optimum — once owned by the Gupta family’s Tegeta — is guilty of operational non-compliance, breaking mining regulations and posing risks to workers.

The committee’s statement noted the department’s assertion that the mine’s social labour plan has expired, and health and safety requirements are not being complied with.

“Non-compliance should incur serious consequences,” the committee said.

Sarah Smit

Sarah Smit

Sarah Smit both subs and writes for the Mail & Guardian. She joined the M&G after completing her master’s degree in English Literature from the University of Cape Town. She is interested in the literature of the contemporary black diaspora and its intersection with queer aesthetics of solidarity. Her recent work considers the connections between South African literary history and literature from the rest of the Continent. Read more from Sarah Smit

    Client Media Releases

    MTN backs SA's youth to 'think tech, do business'
    Being intelligent about business data
    PhD for 79-year-old theology graduate