HomeGoldFlood threat at Grootvlei mine

Flood threat at Grootvlei mine

Grootvlei mine “’
facing flood threat
next week
Johannesburg, South Africa — MININGREVIEW.COM — 04 June 2010 – Workers keeping the Grootvlei mine dry for when Aurora Empowerment Systems raises the money to buy it out of liquidation are threatening to let it flood unless they receive three months worth of back pay.

Miningmx reports that in a letter sent on to two officials at UniCredit Group “’ a German bank heavily exposed to the Grootvlei mine “’ trade union Solidarity’s deputy general secretary Gideon du Plessis warned that if some 100 workers were not paid in full for the work they had done over the past three months they would walk off the mine next week. The letter alleged that the 100 workers, who had been retained to maintain and care for the mine since operations had been suspended in March this year, had not been paid since then.

UniCredit owns HypoVereinsank (HvB), which is exposed to debt of up to R900 million stemming from hedged gold positions at Grootvlei. UniCredit has limited the repayment to R290 million of the R390 million Aurora bid for the mine. Aurora has not yet paid for the mine.

“We got to a stage where the employees told us that if they did not get a favourable response from the liquidators and Aurora directors by today, they would be forced to down tools and walk away,” du Plessis said in the one-page letter.

He told Miningmx the salary bill alone stood at around R30 million, with payments due to power utility Eskom of around R25 million, Rand Water of R4 million and pension funds at R4.2 million.

“We indicated that if we don’t get this full salary by Monday at the latest, then these workers will walk away. It’s a very serious thing for the Grootvlei mine. Management there will have to quickly learn how to work the pumps and things,” he said.

Dawid Stander, who is heading up mining for Aurora, told Miningmx he was certain all monies owed to care-and-maintenance crews would be paid today, but he couldn’t say what the figure was.

"Aurora has funds and they will be releasing them today to pay for care and maintenance," Stander told Miningmx. “They [the workers] have got more than enough reason to be cross, but I know this payment will happen.”