Lily Mine narrowly escapes liquidation

Plans to revive Lily Mine have finally been cleared after the liquidation application brought against its sister mine, Barbrook, was withdrawn on Thursday, clearing the way for a takeover of the parent company, Vantage Goldfields, by the Siyakhula Sonke Corporation (SSC).

The Barbrook creditors rendered services to maintain the mine for the past two years but have not yet been paid, and last week a meeting to adopt the business rescue plan was disrupted when Lomshiyo residents demanded further consultation.

The meeting was supposed to secure the creditors’ approval for the deal between SSC and Vantage Goldfields.

A R320-million joint investment by the Industrial Development Corporation (IDC) and SSC, supported by Mineral Resources Minister Gwede Mantashe, is meant to restart mining operations.

Operations at Lily Mine and Barbrook, near Barberton in Mpumalanga, came to a halt after a pillar collapsed underground three years ago, which trapped and killed three workers: Pretty Mabuza, Yvonne Mnisi and Solomon Nyarenda.

Vantage Goldfields was then placed under business rescue.

This year Koch applied for Vantage Goldfields to be liquidated on behalf of Stevridge Mining and Rock Mining Machines. But the company’s business rescue practitioner, Rob Deveraux, has since secured a buyout from SSC, a majority black-owned mining firm.

In his latest attempt to stall the deal, Koch wrote to Deveraux and cited an anonymous report from a mining consultant, claiming that repairs to the tailings dam and tests from a reputable laboratory on the state of the mine are incomplete.

This report was used to argue that the deal could not be concluded until the report’s findings were addressed.

Koch also claims that Deveraux had purposefully removed the voting rights of the creditors to prevent them derailing the deal.

“In order to protect the interest of the creditors it was elaborated to bring an urgent application to interdict this meeting from taking place,” Koch wrote to the rock drilling and maintenance creditors at Barbrook.

Koch has been accused of deliberately stifling the takeover because he previously consulted for Galane Gold, whose bid to buy the mine failed. Now he has accused Deveraux of lying about the money raised from the IDC and demanded proof of the approved loan.

Deveraux hit back in his letter to Koch, disputing his claims of bias: “I have always acted independently and in the interest of the company. If this [my integrity] was such a concern, you have had 17 months to address it. Clearly it was not a concern to you when Galane was looking to purchase the mine.”

Finally, in a shock capitulation by Koch on Thursday, the liquidation application was withdrawn. The meeting with Lomshiyo residents is now expected to go ahead on Monday, when the deal will be finalised.

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Govan Whittles

Govan Whittles is a general news and political multimedia journalist at the Mail & Guardian. Born in King William's Town in the Eastern Cape, he cut his teeth as a radio journalist at Primedia Broadcasting. He produced two documentaries and one short film for the Walter Sisulu University, and enjoys writing about grassroots issues, national politics, identity, heritage and hip-hop culture.

Related stories


Subscribers only

ANC’s rotten apples on the chopping block

Now that the NEC has finalised its step-aside guidelines for those facing corruption charges, a swathe of officials will struggle to cling to their positions

The race elephant lurking in the DA’s ‘laboratory’

Tony Leon’s comments calling Mmusi Maimane an ‘experiment’ have lifted the lid on what disgruntled black leaders describe as insidious racism and a refusal to hold racists to account

More top stories

More ethnically diverse bone marrow donors needed to save lives

The myth that regenerative stem cells are body parts has led to donor reluctance

Khaya Sithole: The real weapons of mass destruction

Ratings agencies and derivatives caused the housing bubble, but where does the next financial crisis lurk?

Analysts expecting another attack ‘in the next few months’ in...

The extremist insurgency in Mozambique has been an ongoing threat since 2017. SADC needs to act now, say analysts

SIU probes how master of the high court fleeces the...

While the SIU delves into dozens of allegations of fraud, corruption and misconduct against officials at the master of the high court, many families have been left destitute after the death of their loved ones.

press releases

Loading latest Press Releases…