Johannesburg, South Africa — MININGREVIEW.COM — 15 August 2011 – The first of 2,500 laid-off workers at troubled Pamodzi Gold’s Orkney mine could be back at work by the end of October if the court this week approves the R150 million buyout offer by a Chinese-South African consortium.
Reporting this here, Miningmx explains that the bid, announced last Friday, sees BEK Resources, a local consortium headed by Elias Khumalo, and the SSC Mandarin Group teaming up to buy the mine through a joint venture known as China African Precious Metals.
The bid comes after Aurora Empowerment Systems, headed by President Jacob Zuma’s nephew, Khulubuse, lost its preferred bidder status for Pamodzi’s assets, and at a time when more than 5,300 former Pamodzi workers are out on the street and are owed millions by Aurora.
In a rare interview in Durban this week, the publicity-shy Khumalo, a close associate and backer of the president, was upbeat about the acquisition.
“There are a lot of people who are saying that this is a political transaction aimed at saving the president embarrassment and that this is something he has asked me to do. This is not the case. This is a business deal that is also motivated by a bid to save jobs and rescue people’s livelihood while making a profit in the long term,” he said.
“I have not been asked to do this by the president. I have not formally briefed him when we have met, but I will do so, just as I have briefed the leadership of the minerals and energy department,” Khumalo added.
Khumalo’s consortium, which already owns diamond mines in Free State and Northern Cape, and has signed memorandums of interest in two other as yet unnamed gold mines, is interested in bidding for Pamodzi’s East Rand mine if it goes up for auction.
“We are interested in the East Rand mine, which is a bigger, better and potentially more productive mine, with a longer life span than Orkney,” Khumalo said. “However, it has been too badly stripped and its assets have deteriorated too terribly since the last balance sheet for us to make a bid now. If it goes on auction, we will express interest.”
Khumalo told City Press that once the deal was approved, the new owners would pump R1billion into Orkney (up from the original R525 million they had budgeted), starting with refurbishment of its assets and the construction of a gold processing plant.
Khumalo believes that in the long run Orkney can turn a profit and that their investment will pay off. Previously, the mine had farmed its gold ore out to AngloGold for production.
“We have a recall agreement with the unions and will start with re-employing workers who were laid off, who total 2,500, 500 of whom were sourced from labour brokers,” Khumalo said. “I’m a supporter of government policy and we’ll eventually take on those employed by brokers directly.
“This isn’t a situation where we can buy the mine on Tuesday and start mining on Friday, but we hope to have the first of several tranches of workers back on the job by the end of October if our timetable works out,” he stated.
Khumalo has begun talks with the National Union of Mineworkers and Solidarity, both of which have backed the sale.