18 April 2024 | 08:36 AM

Aurora ‘asset strips’ its scrap metal

Key Takeaways

Aurora Empowerment Systems is selling scrap metal from the Grootvlei operations of the liquidated Pamodzi gold mines in a move seen as violating the care and maintenance agreement between Aurora and the liquidators.

When the Mail & Guardian visited the mines this week, it found a company called Reclam, or the New Reclamation Group, removing scrap metal that it has purchased from Aurora.

Scrap was scattered around number six shaft in Springs as a Reclam bulldozer went to work, while the workshop was also being stripped.

Aurora’s mines have been out of operation since March this year, when workers downed tools after not being paid for two months.

Aurora took control of the mine in October last year.

President Jacob Zuma’s nephew Khulubuse Zuma and Nelson Mandela’s grandson, Zondwa Mandela, sit on its board.

A source close to the liquidators said that the scrap metal sales were never approved by the liquidating team, making it tantamount to “asset stripping, theft and defrauding the creditors”.

“This is contradictory to the care and maintenance agreement signed between Aurora and the liquidators. The liquidators must give Aurora written consent for assets to be removed from the mines, even if it’s in the normal course of business,” said the source.

The source said that the issue was raised at a meeting between the liquidation team and Aurora, which was given seven days to give the liquidators a full report on the scrap metal sold.

But head liquidator Enver Motala said that selling scrap is not a problem because “Aurora somehow needs to fund their care and maintenance”.

“Aurora is allowed to sell scrap. As far as I’m aware from information made available to me, it’s the sale of surface scrap. We’re looking into it.”

Harry Kassel of Reclam told the M&G: “We are reclaiming scrap from the surface; we buy it from Aurora and pay per ton.

We’ve done scrapping on a number of shafts. I’ve got invoices and everything — it’s all above board.” Kassel would not disclose the value of the scrap his company has purchased.

Frazy Namanyane, of the National Union of Mineworkers, said that he is aware of the sale of scrap and has raised the issue with the liquidators.

“[Aurora] cannot run their care and maintenance operations by selling scrap — it’s not their asset, it doesn’t belong to them,” Namanyane said.

“The scrap is worth a lot of money; there’ll be nothing left for whoever wants to buy the mine.”

The M&G has also established that Suliman “Solly” Bhana was present at a meeting between the liquidators and Aurora at which the sale of scrap metal was raised.

Motala said that Bhana was present to discuss issues pertaining to when he was contracted to Aurora as a management consultant.

However, the source close to the liquidators says that he was part of the discussion about the scrap metal.

Bhana and his son Faizel came into the spotlight earlier this year, when the M&G established that they were making major decisions for Aurora in their advisory capacity.

The Bhanas have a checkered financial past, including a R12-million fine for insider trading at their company, Amlac, in 2002.

In June, the Bhanas’ contract with Aurora was terminated, but not before the family had received R1-million from the company.

The M&G Centre for Investigative Journalism, supported by M&G Media and the Open Society Foundation for South Africa, produced this story.www.amabhungane.co.za.

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Before joining the amaBhungane team in 2017, Micah was the national coordinator for media freedom and diversity at the Right2Know Campaign. He holds a Masters in African Studies from Oxford University and a BA Honours in History from Wits University.

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