Gold Field has served section 189 notices which detail dismissals based on operational requirements in the Labour Relations Act. (Madelene Cronje/M&G)
The Aurora gold mines looted by former president Jacob Zuma’s nephew Khulubuse Zuma and his partners are heading for liquidation again after a falling-out between the South African and Chinese partners in the consortium that bought Aurora in 2012.
Lawyers for BEK Holdings, which owns 26% of China African Precious Metals (CAPM), have applied to the high court in Johannesburg for liquidation after a “breakdown” in relations with its Chinese partner, Golden Haven, which owns 74% of CAPM.
The move by BEK owner Elias Khumalo, a close associate of Jacob Zuma, comes after mediation by the department of mineral resources failed last week.
CAPM employs about 460 workers at its Orkney gold mine, which went back into production after it was rehabilitated by CAPM. It is not clear at this stage whether they have been paid. CAPM’s bank accounts have been suspended by Standard Bank as a result of the liquidation application and the dispute between BEK and Golden Haven.
More than 5 000 workers at the Orkney and Grootvlei gold mines lost their jobs after the mines were stripped of gold and assets valued at R1.82-billion while under the control of Aurora Empowerment Systems. The mines were placed under Aurora’s control during a 2009 liquidation process, but were looted and their shafts flooded. Aurora directors Khulubuse Zuma, Zondwa Mandela, (Nelson Mandela’s grandson), Thulani Ngubani and Fazel and Solly Bhana were found to be personally responsible for stripping the mines’ assets by the high court in Pretoria in 2015.
CAPM bought the Orkney mines for R151.2-million.
Things soured between the partners in CAPM after new leaders at Golden Haven removed Khumalo as CAPM executive director, appointed a new chief executive, and demoted Khumalo to a non-executive director with a salary of R15 000. Khumalo claims the decision, taken in August, was irregular because the board did not quorate.
According to correspondence between the parties, included in the application for liquidation, Golden Haven failed to honour an earlier commitment to invest R100-million in Orkney for the processing of gold extracted there since 2012.
In a letter to Golden Haven chief executive Lee Jiang in July, Khumalo said there were “irreconcilable differences and trust issues” between the partners and made Golden Haven an offer either to buy his share of the company for R13.26-million or to sell him its share for R37.5-million.
In a responding letter in August, Jiang declined, saying they wanted to continue with their joint venture and that BEK had not “triggered” the processes agreed upon in the CAPM memorandum of incorporation. Golden Haven would also oppose attempts to liquidate CAPM.
Khumalo’s lawyer, Barnabas Xulu, said: “We are forced to take this action as the relationship has broken down completely. There has been an undermining of the BEE [black economic empowerment] component and an attempt to run the operation on a shoestring budget. DMR [department of mineral resources] had attempted mediation but Golden Haven did not turn up, leaving us no other choice.”
Xulu said the liquidation process would not place jobs in danger, but the suspended bank accounts were a concern in terms of paying workers.
Khumalo declined to comment. DMR and Golden Haven had not responded by the time of publication.