25 May 2024 | 03:26 PM

Aurora’s tank runs on empty

Key Takeaways

Joint liquidators of the troubled Pamodzi Gold mines being run by Aurora Empowerment Systems appear poised to scrap their deal with Aurora.

Aurora, the board of which includes President Jacob Zuma’s nephew, Khulubuse, the president’s lawyer, Michael Hulley, and Nelson Mandela’s grandson Zondwa Mandela, was chosen by the liquidators as preferred bidder for the Pamodzi assets, which include ageing gold mines at Orkney and on the East Rand.

But it appears Aurora has not been able to raise the cash to complete the deal after its mysterious Malaysian backers, AM-Equity, apparently walked away from the transaction.

The Mail & Guardian understands that at a crisis meeting on Thursday the liquidators gave Aurora an ultimatum to come up with cash or guarantees within 10 days or have its bid contract cancelled.

In the meeting Aurora was taken to task for non-performance: “It was hell to pay,” said one source: “Should they not meet that 10-day undertaking, that’s the end of the road for them.”

It is also understood that despite public promises to pay desperate mineworkers by Thursday afternoon, Aurora admitted to liquidators that it did not have the cash to do this. (See accompanying story.)

One source told the M&G that liquidator Enver Motala travelled to London and Munich two weekends ago to propose a new funding structure. He could not be reached to confirm this.

There is no clarity on another unnamed American funder, who was reported last week to be in talks with Motala about funding Aurora.

Ahead of the meeting Aurora operations director Sheshile Ngubane furiously denied that the liquidators were about to pull the plug on the deal.

“Nobody [outside] knows the agenda. We are still the preferred bidders,” Ngubane said. “We have signed a contract with the liquidators. If they are unhappy about anything they will discuss it with us. But we will go to round 18, Aurora is going to fight to the last breath — and we are going ahead with all of our deals.”

Zuma echoed Ngubane’s bullish outlook. He said Aurora was talking to the Industrial Development Corporation about funding other deals.

“We are talking to them about other acquisitions. Our firepower is too much, no one can stop us. We don’t only have these mines, we will surprise you with other acquisitions in the next few weeks.”

This week Aurora was reported to have concluded a R5-million deal to buy out shareholders in listed company Labat to use the Labat shell to raise funds through the Johannesburg Securities Exchange.

The National Union of Mineworkers (NUM) has criticised the company for buying shares when workers on its mines have been only partly paid, but Zuma told the M&G: “We are not a charity organisation. NUM wants us to run at a loss, we cannot do that.

“With the time lapses on these deals, we had to pay Labat or the deal would be off.”

Documents seen by the M&G also suggest that the Labat shares were to be pledged to secure some of Aurora’s obligations to make payments needed to meet repayment agreements with Pamodzi’s major creditor, the HVB-Unicredit Group, based in Munich.

But HVB appears sceptical that it will get its money.

In an internal email, seen by the M&G, HVB manager Frank Biburger wrote to Motala on March 2: “Something is wrong here. We delayed our repayment profile by accepting — that an amount of R5-million will be moved to the end of March. Aurora told us that they require R5-million to fund the operation. However, we heard today that the mine is running out of oil, explosives etc.

“We probably have to accept that Aurora is running dry and does not even plan to pay us and/or the mine.”

Meanwhile, two companies have prepared liquidation applications against Aurora because of unpaid bills, while the Mineworkers’ Pension Fund has reported the company for allegedly deducting contributions from workers’ salaries without paying them over to their pension fund.

‘We won’t go back to work’

Aurora’s Grootvlei mine was quiet on Thursday after the previous day’s clashes between angry workers and police, but the National Union of Mineworkers (NUM) has threatened further protests.

A week of demonstrations at the mine over unpaid wages exploded on Wednesday. Workers claim they have not received wages for two months and are without food, water or electricity at the Grootvlei hostels.

Solly Manjate, a clerk, said: “Today we are just waiting for the payment — Otherwise we won’t go back to work.”

But NUM spokesperson Lesiba Seshoka said the miners will not be paid. “Yesterday the management said the same thing, last week they said the same, in fact, last month they said the same.”

Seshoka said management had indicated the mine did not have the money to pay workers.

“They have sent a lot of confusing messages,” said Seshoka. “They tell the public they don’t owe the workers money — but then why are they promising to pay up soon?”

Seshoka said the union has now approached its legal department for assistance.

Manjate said that even if workers had been paid for February it would not be enough. “We have an agreement with the union not to go underground until we are also paid for March,” he said.

The workers said food parcels donated by the public are almost exhausted. “My parcel is finished,” said Raphael Lebo, a miner at number four shaft. “The last one I got was last week Thursday.”

Lebo warned that if he is not paid soon: “I will — blast the hostel, the clinic, I will blast the shaft.”

“I have not had water for three days,” said miner Arlinto Vilakazi. “We are suffering here.”

Aurora will start laying off 1 900 of its employees from Monday, when it plans to resume operations. Only 700 miners are expected to go underground.

Additional reporting by Lisa Steyn

amaBhungane are the investigators of the M&G Centre for Investigative Journalism, a non-profit initiative to enhance capacity for investigative journalism in the public interest. The centre is funded by M&G Media Ltd and the Open Society Foundation for South Africa. www.amabhungane.mg.co.za

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