Holding vigil for three mineworkers still buried underground from a crown pillar collapse in 2016 that brought mining operations to an abrupt end. From Moneyweb.
On Tuesday this week the families of Solomon Nyirenda, Yvonne Mnisi and Pretty Nkambule had been camped outside the Lily gold mine gate in Mpumalanga for 1 316 days – and will stay there another 1 316 days if that’s what it takes to recover the bodies of their loved ones.
They set up camp on 30 April 2019 to draw attention to one of the worst mining tragedies in recent SA mining history.
It’s an astonishing story of perseverance and fealty to absent family members. When Moneyweb spoke to the family members a year ago, none would concede that their loved ones had died – not until the container is recovered and they are presented with evidence.
They want closure, and those responsible for the tragedy held to account.
There is no doubt in their minds that the former management at Vantage Goldfields are to blame – though that is currently the subject of a magisterial inquest.
On 5 February 2016, a key support pillar collapsed at Lily, trapping 76 miners underground.
Included among them were Nyirenda, Mnisi and Nkambule, who dispensed safety equipment from a container at ground level.
When the support pillar collapsed, the container and its occupants were sent crashing into the bowels of the mine, and remain there to this day.
Business rescue
Following the tragedy, three mining companies – Vantage Goldfields (Pty) Ltd (VGL), Barbrook and Mimco, which owns the Lily mine – were placed under business rescue.
Seven years and several court cases later, there is a glimmer of hope that matters will come to a legal resolution in the first half of 2023, allowing the mining operations to recommence.
For the roughly 700 former mine workers, that couldn’t come too soon.
What caused the support pillar to collapse is the subject of the aforementioned inquest.
Former workers told Moneyweb that rock engineers had warned of the potential dangers of working around and undermining the so-called crown pillar. The mine plan called for the development of an incline shaft away from the crown pillar area, which never happened.
The magisterial inquiry also heard new testimony that zama zamas had infiltrated the mine and illegally chipped away at the crown pillar for whatever gold could be recovered. That would have fatally undermined the pillar and contributed to the collapse of the ground above.
The findings of the inquest will only be made public in 2023. Another purpose of the inquest was to ascertain whether there was any likelihood that the trapped miners could still be alive, a slim prospect laid to rest by a state medical expert who declared it certain that the miners were dead.
Legal tussles
Two groups are duelling for control of the mines: Australian group Macquarie Metals, which in 2020 acquired 98% of Vantage’s parent company, Vantage Goldfields Limited; and Arqomanzi, which has the backing of Hong Kong-based Alpha Capital and the Industrial Development Corporation.
The business rescue practitioners had accepted the Macquarie Metals offer to settle creditors’ claims of R212 million and commence sinking a decline shaft at Lily to retrieve the bodies of the buried workers.
Vantage CEO Mike McChesney tells Moneyweb the mine would have been out of business rescue and fully operational two years ago had it not been for what he describes as an opportunistic and hostile bid by Arqomanzi, headed by veteran gold mine manager Neil Herrick.
Arqomanzi became the largest creditor in Vantage Goldfields SA (VGSA) when it acquired loan claims of R391 million and R189 million in Vantage Goldfields and Barbrook respectively.
For this, it paid just R15.5 million in a strategy deemed ‘innovative manoeuvring’ by Acting Judge Roelofse in the Mpumalanga High Court in 2019 when Vantage challenged its standing as a creditor.
Arqomanzi successfully interdicted the implementation of the business rescue plan in court, arguing that it was shut out as the largest creditor.
The Mpumalanga High Court declared that Arqomanzi was a valid creditor and the business rescue practitioners (BRPs) may not unilaterally amend a business rescue process without creditor approval, specifically the approval of the largest creditor – Arqomanzi.
That decision has been appealed by VGSA at the Supreme Court of Appeal (SCA) in Bloemfontein. A decision is expected early next year. A second case will be heard at the SCA in March 2023.
Vantage has been footing the bill for the care of maintenance of the mines, at a cost of roughly R1 million a month, says McChesney.
One of the business rescue practitioners, Rob Devereux, tells Moneyweb there is little the BRPs can do to rescue the mines while the legal process between Vantage and Arqomanzi is unresolved.
Both sides are disputing the other’s proof of funding. “The BRPs received documentation from both parties alleging proof of funding for the respective transactions and the BRPs requested these funds to be paid into a trust account. Both parties rejected this and stated that the BRPs will have to wait for the outcome of the court’s decision,” wrote the BRPs in a memo to creditors in August.
Herrick wrote to the BRPs in June this year, saying they had previously accepted Arqomanzi’s proof of funding and that “no rational investor would put up R250 million in cash and leave it in a bank account for an indefinite period”.
Claims of forgery
In December 2021, Herrick laid criminal charges at the Mbombela Police Station against Vantage for trying to pass off what he says is a forged proof of funding letter from HSBC.
McChesney swatted down that claim: “It’s absurd to make a claim like this. Macquarie Metals has denied this to us, and in any event it was a 60-day facility that has expired. They have the funding and we would have been operational now had it not been for Arqomanzi’s hostile bid.”
Herrick responds that McChesney is attempting “to trivialise the significance of the forgery because he knows it is fatal for Vantage”.
“It was used to defraud the companies and creditors, directly causing the last two court cases which Vantage is now appealing.
“The matter is with law enforcement and must run its course. We have provided the BRPs with evidence beyond any doubt that it is a forgery and creditors need to know who they are dealing with. We think our proposal for rescue is far superior, we have the funds in place to pay creditors and recommence mining operations, and we say it is Vantage that is delaying the process of restarting mining operations.”
Attacks on families of missing miners
One of the ugliest aspects of this story is the attacks on the families holding vigil outside the mine gate.
On one occasion, an explosive device was detonated outside the tents where family members were sleeping. The bomb squad was called in, but nothing ever came of this.
A few months later, the tents were set ablaze, and the occupants were told to remain inside or be shot if they attempted to escape the inferno. The criminals responsible bolted when some young men ran to rescue the family members inside. Gun shots have been fired at the encampment and on another occasion a gang again set fire to the settlement.
One of the suspects is a well-known and previously convicted criminal from the area, who will appear in court in Mpumalanga next week in connection with one of the attacks.
Family members hope this will tease out who is behind the attacks and why.
Harry Mazibuko, spokesperson for the families and a former Association of Mineworkers and Construction Union (Amcu) official who worked as a safety representative at the mine, says he was offered R250 000 in a brown envelope to remove the encampment from outside the mine gate.
“The main target [of the attacks] is me for reasons I cannot prove. I was told that there was a campaign to silence me because I helped set up the camp.”
If the purpose of the camp is to wage a PR campaign against the company, it could hardly have chosen a more isolated spot, miles from the nearest settlement. Mazibuko says the camp was originally set up inside the mine perimeter, but a court interdict obtained by Vantage required the camp to locate at least 1 000 metres from the mine.
McChesney tells Moneyweb that accusations over the attacks have been directed at the company, but he believes inter-community rivalries are the likely cause.
“There are different groupings within the community and there are old and bitter rivalries at play, from what we understand.”
Money may also be behind the mayhem, adds McChesney. Arqomanzi paid R15 000 to each of 567 miners as an initial payment of their full claims for wages, and then took cession of their claims against the mine. The families are also receiving support in the form of basic supplies from Arqomanzi and its BEE partner, Siyakhula Sonke Empowerment Corporation.
Herrick points out that Arqomanzi and its BEE partner are the only parties to provide any humanitarian support to the families since the crown pillar collapse.
Illegal mining
With regards to the claim by family members that zama zamas had infiltrated the mine recently, the BRPs, writing to creditors in August, said: “There were issues with zama zamas and [the matter] was dealt with by security and police at a ministerial level.”
They added: “There was alleged theft at Lily mine which the BRPs do not believe, as everything was moved from the mine to storage.”
Devereux says the mine is secured by armed guards, and that while there was some infiltration by zama zamas, they have been removed and security tightened.
It remains for the SCA to determine the future of the Lily and Barbrook gold mines, and that decision may now be just months away.
