Sat Oct 22 09:16:21 CAT 2016

FS mine's future hangs in balance

By Marcia Klein | Sep 09, 2009 | COMMENTS [ 0 ]

THE deadline for Pamodzi Investment Holdings, the holding company of the troubled Pamodzi Gold, to come up with the money to keep the Pamodzi Gold Free State mine going has come and gone - and the mine's future continues to hang in the balance.

Provisional liquidators of the mines and PIH director Kobus du Plooy confirmed yesterday that the liquidators' demand for R11million to keep the Free State mine going on a care and maintenance basis for the month had not been secured by Monday's deadline.

The liquidators had already accepted a R405million bid from Harmony for the mine, but Harmony withdrew its bid after PIH said it had secured funding from the China Africa Development Fund and wanted a chance to present its rescue plan.

Another of Pamodzi's mines, at Orkney, was also successfully bid for by Aurora Empowerment Systems.

Joint provisional liquidator Enver Motala said yesterday that the liquidators have signed an interim trading and contract mining agreement with Aurora, and since Monday, Aurora has started mining activities.

Aurora originally said it would be able to employ 390 of Orkney's 1500 permanent employees immediately, but in fact, it was able to take on 872 of these employees and hoped to employ another 238 on October 1, with the rest being employed in the short- to medium-term after December.

Du Plooy said yesterday that "the R11million that had to be raised has increased substantially as the process we are taking will take two months and not one".

He said PIH may also have to secure funding to put a third Pamodzi mine, on the East Rand, on a care and maintenance programme, which meant more funding would be required. "We have made a lot of progress and we will make an announcement on that soon," Du Plooy said.

He said PIH had presented its plan which would see it, together with the China Africa Development Fund, pour R625million into Pamodzi Gold, and the next step was for the China Africa fund to do a due diligence before the funds were injected.

PIH believed its plan was better than the sale of mines to Harmony and Aurora because it would not require the transfer of mining licences.

The liquidators, creditors and employees, meanwhile, have been left in limbo since Harmony has withdrawn and PIH has failed to come up with the money.

PIH has made it clear that its plan is group-wide, and is conditional upon mines not being sold.


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