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Aurora rerun at West Rand mine?

Sunday, 26 January 2014 09:03
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Members of the controversial Bhana family – of liquidated airline Velvet Sky and Aurora mining notoriety – appear to have seized yet another questionable financial opportunity, this time involving an insolvent gold mining company on the West Rand.
Once again, however, it seems that the father-and-son team of Solly and Fazel Bhana have tried to keep their involvement under wraps.


More than 1 600 miners have been hoping for the best since December last year, when the provisional liquidators of Blyvooruitzicht Gold Mine (Blyvoor) in Carletonville signed a sale agreement with a then unknown company, Goldrich Holdings (Goldrich), to buy the mine. The understanding was that Goldrich would kick-start the mine's operations this month.
The miners' fate, however, also rests with Thulani Ngubane, a director alongside Khulubuse Zuma and Zondwa Mandela of Aurora Empowerment Systems, which was liquidated in 2011 following its botched takeover of two Pamodzi Gold mines.
But, although Goldrich has paid about R5-million towards the sale, Blyvoor's joint provisional liquidators cancelled their contract with it earlier this month when the company allegedly failed to meet further payment obligations, an allegation Goldrich strenuously denies.
Goldrich was barred from Blyvoor's premises last Friday. The company subsequently brought an urgent court application against the provisional liquidators and the mine for "unlawfully evicting" them.
On Thursday, the South Gauteng High Court ruled in Goldrich's favour and the company is now allowed back on the mine, according to Goldrich's lawyer, David Swartz.


Denials

Swartz, of Phillip Silver and Associates – the same firm that represented the Bhanas in the Aurora matter – denied the liquidators's allegations that Goldrich had not made certain payments.
Swartz claimed that his client had already paid R4.8-million, the second of about 12 payments.
Bonginkosi Mthethwa, a KwaZulu-Natal businessperson, is currently the only person listed as a Goldrich director. The company was ¬registered in February last year.
Yet Mthethwa is not acting alone in the deal. Aurora's Ngubane told amaBhungane that he was on Goldrich's board. It was in this capacity that he signed sale and interim agreements in December and January on behalf of Goldrich with the liquidators.
Ngubane also noted that Mthethwa was a "personal friend" and that his involvement with Goldrich went back 20 years. He said that he would become a director of the company "at a later stage".
Fazel Bhana, who with Solly was specifically named as a key driver in the collapse of the two Pamodzi gold mines under Aurora's management (see sidebar), appears to have also played a major role in negotiating Goldrich's deal with Blyvoor's provisional liquidators.


Main negotiators

An anonymous source, whose information was corroborated by amaBhungane, said that the "main negotiator in the transaction" was Fazel Bhana. The source also noted that both Fazel and Solly Bhana were "at the mine daily, flanked by Mr Thulani Ngubane".
Solly Bhana's involvement at Blyvoor could not be confirmed.
Fazel seems to have tried to keep a low profile during negotiations over Blyvoor.
In particular, he has spelt his name "Fazil" with an "i" and, according to one of the joint provisional liquidators, Bhana junior only ever used his first name during their interaction. The only time he mentioned his surname was when he was told to sign it on a registry at a meeting with the mineral resources department.
Ngubane, however, defended Fazel's role. He said that the company was using him because, as a "lawyer by profession ... he has the right expertise" and that he was "indispensable and irreplaceable".
Liquidators were appointed to take over Blyvoor in August last year after a declining gold price and rising overheads forced it into provisional liquidation.
According to newspaper reports, two mining companies, DRDGold and Village Main Reef, both abdicated responsibility for the mine.
The workers were left jobless and the mine became a magnet for illegal miners or "zama zamas".
It appears that this is not the first time the Bhanas have been party to a possible deal to buy Blyvoor.


Deal cancelled

In 2009, a deal between DRDGold and Aurora – in which Aurora would pay R376-million for a 60% stake – was cancelled.
According to a 2010 MiningMx news report, DRDGold chief executive Niel Pretorius said the deal was thwarted as a result of suspicion about the role of Aurora's "advisers", although Pretorius did not specifically name the Bhanas.
Goldrich took occupation of Blyvoor on December 6, about 10 days after the company swooped in and mysteriously secured power to the mine's main asset, Shaft No 5, from Eskom, which was days away from shutting off the shaft's electricity supply. Blyvoor is about R90-million in arrears with Eskom.
According to joint provisional liquidator Leigh Roering, Goldrich "saved the day" when it managed to keep Eskom from turning off the power. Roering said the power utility had threatened liquidators with a November 29 deadline.
"We have no idea how it did it. The main thing is to save the Shaft No 5 for employment purposes. It managed to secure power to the shaft, and that is how it got involved," he said.
Joint provisional liquidators signed an interim and sale agreement with the company.
Ngubane denied that there was anything "sinister" about Eskom staying its hand.


Total cost

Roering noted that Goldrich referred to "foreign funds that were going to be brought in" to help to pay off the instalments agreed upon between the parties. The total cost for the mine would have been about R70-million.
Ngubane said that funding for Goldrich was "from a private family trust in Holland".
"Goldrich is not a listed company. I don't have to open up my chest. And the private equity firm from Holland will remain private as well," he said.
Referring to the insolvency of Blyvoor mine following ownership issues between DRDGold and Village Main Reef, Ngubane said: "At Goldrich, we have a heart. We want to save 450 jobs."
But it was the company's alleged inability to fulfil its financial obligations that led to its eviction from the premises.
In claims that are reminiscent of the Aurora debacle, Roering said: "There was always a reason for why they couldn't pay.
"They were waiting for funding, apparently from Dubai. But it never came."
Ngubane denied the nonpayment, allegations and blamed the liquidators, "who have revoked our agreement and that is why we are taking them to court".
Fazel Bhana and Swartz had not responded to questions by the time of going to print.

Sally Evans & Gabi Falanga  - Mail & Guardian.  Additional reporting by Tileni Mongudi and Justice Kavahematui

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SATURDAY STAR | 19 APRIL 2019, 7:41PM | SHEREE BEGA Picture:Yvette Descham On August 13 2013, Billy M heard gunshots at the gate of his house. He didn't know who fired the gun, and, worried that local traditional leadership might be involved, he didn't report the incident to the police. For the next five years, the community activist from Fuleni, a small rural village in KwaZulu-Natal bordering one of SA's oldest and largest wilderness areas, the Hluhluwe iMfolozi Park, continued to receive threats.  "We know our lives are in danger. This is part of the struggle," he says, simply. Billy M's account is contained in a new report released this week, 'We know Our  Lives Are in Danger’: Environment of Fear in South Africa’s Mining-Affected Communities, which documents how community activists in mining areas face harassment, intimidation and violence. The report details how in Billy M's case, mining company Ibutho Coal had applied for rights to develop a coal mine in Fuleni in 2013. The development would have required the relocation of hundreds of people from their homes and farmland and destroy graveyards. "The mine's environmental impact assessment estimated that more than 6000 people living in the Fuleni area would be impacted. Blasting vibration, dust, and floodlights, too, could harm the community," says the report."During the environmental consultation processes, Billy M led opposition that culminated in a protest by community members in April 2016."The company reportedly abandoned the project in 2016 while another firm, Imvukuzane Resources is reportedly interested in mining in the area.The 74-page report, compiled by Human Rights Watch, the Centre for Environmental Rights (CER), groundWork, and Earthjustice, describes a system designed to "deter and penalise" mining opponents.The authors conducted interviews with more than 100 activists, community leaders, environmental groups, lawyers representing activists, police and municipal officials, describing the targeting of community rights defenders in KwaZulu-Natal, Limpopo, Northwest, and Eastern Cape between 2013 and 2018. They report intimidation, violence, damage to property, the use of excessive force during peaceful protests, and arbitrary arrest for their activities in highlighting the negative impacts of mining projects on their communities. "The attacks and harassment have created an atmosphere of fear for community members who mobilise to raise concerns about damage to their livelihoods from the serious environmental and health risks of mining and coal-fired power plants," write the authors."Women often play a leading role in voicing these concerns, making them potential targets for harassment and attacks."But municipalities often impose barriers to protest on organisers that have no legal basis while government officials have failed to adequately investigate allegations of abuse."Some mining companies resort to frivolous lawsuits and social media campaigns to further curb opposition to their projects.  The government has a Constitutional obligation to protect activists," write the authors. Picture: Shayne Robinson, Section 27 Authorities should address the environmental and health concerns related to mining "instead of harassing the activists voicing these concerns,” remarks Matome Kapa, attorney at the CER.The report starts with the high-profile murder of activist Sikhosiphi “Bazooka” Rhadebe, who was killed at his home after receiving anonymous death threats in 2016. Rhadebe was the chairperson of the Amadiba Crisis Committee (ACC), a community-based organisation formed in 2007 to oppose mining activity in Xolobeni in the Eastern Cape.  "Members of his community had been raising concerns that the titanium mine that Australian company Mineral Commodities Ltd proposed to develop on South Africa’s Wild Coast would displace the community and destroy their environment, traditions, and livelihoods. More than three years later, the police have not identified any suspects in his killing."Nonhle Mbuthuma, another Xolobeni community leader and spokesperson of the ACC, has also faced harassment and death threats from unidentified individuals. "I know I am on the hit list.… If I am dying for the truth, then I am dying for a good cause. I am not turning back," she says.But other mining areas have had experiences similar to that of Xolobeni. "While Bazooka’s murder and the threats against Nonhle have received domestic and international attention, many attacks on activists have gone unreported or unnoticed both within and outside the  country."This is, in part, because of "fear of retaliation for speaking out, and because police sometimes do not investigate the attacks", the authors found.The origin of these attacks or threats are often unknown. "So are the perpetrators, but activists believe they may have been facilitated by police, government officials, private security providers, or others apparently acting on behalf of mining companies. "Threats and intimidation by other community members against activists often stem from a belief that activists are preventing or undermining an economically-beneficial mining project. In some cases, government officials or representatives of companies deliberately drive and exploit  these community divisions, seeking to isolate and stigmatize those opposing the mine."The Minerals Council South Africa, which represents 77 mining companies, including some in the research areas, responded that it “is not aware of any threats or attacks against community rights defenders where (its) members operate”.The authors state that while the mining sector and the government emphasise how mining is essential for economic development, "they fail to acknowledge that mining comes at a high environmental and social cost, and often takes place without adequate consultation with,or consent of, local communities".The absence of effective government oversight means that mining activities have harmed the rights of communities across South Africa in various ways. "Such activities have depleted water supplies, polluted the air, soil, and water, and destroyed arable land and ecosystems."Researchers also documented cases of police misconduct, arbitrary arrest, and excessive use of force during protests in mining-affected communities, "which is part of a larger pattern in South Africa".Last year, the Centre for Applied Legal Studies (CALS) at Wits University documented various efforts by traditional authorities to stifle opposition to mines in their communities. "In some cases, traditional authorities label those opposing mines as anti-development and troublemakers, thus alienating and stigmatising them.As a result, community members are often afraid to speak out against a mine in open consultations," CALS found.Research by the SA Human Rights Commission, too, has found that community members sometimes “are afraid to openly oppose the mine for fear of intimidation or unfavourable treatment (by the Traditional Authority)."The SAHRC says many mining-affected communities are experiencing “the creation of tension and division within communities as a result of mining operations.Sometimes, threats and intimidation against activists come from community members who have been promised economic benefit from the proposed project or are politically allied with the government or traditional authority."Local communities often do not benefit from mining activities, says the report. "Although South African law requires the development of social and labour plans (SLPs) that establish binding commitments by mining companies to benefit communities and mine workers, CALS has documented significant flaws in the development and implementation of SLPs."Despite the environmental and social costs of mining, the government is not adequately enforcing relevant environmental standards and mining regulations throughout South Africa. The SAHRC has found that the Department of Mineral Resources (DMR) often fails to hold mining companies accountable, "imposing few or no consequences for unlawful activities and therefore shifting the costs of pollution to local communities."Compliance with regulatory obligations, as well as monitoring and enforcement of such responsibilities, remains a crucial concern in the context of mining activities," says the SAHRC, noting how the DMR and other governmental agencies often do not respond to complaints filed against mines by community members.The report's authors describe how the lack of government action and oversight has also helped make the mining industry one of the least transparent industries in South Africa. Information that communities require to understand the impacts of mines and to hold mining companies accountable for harmful activities is often not publicly available. "Such information includes environmental authorisations, environmental management programs, waste management licences, atmospheric emission licences, mining rights, mining work programmes, social and labour plans, or compliance and enforcement information."The only way to access such information is through a request under South Africa’s access to information law, a procedure that the World Health Organisation has called 'seriously flawed' and which the DMR regularly flouts. In addition, mining companies and the government rarely consult meaningfully with communities during the mining approval process, resulting in uninformed and poor government and industry decisions that do not reflect community perspectives or have their support," says the report.The authors assert how the threats, attacks, and other forms of intimidation against community rights defenders and environmental groups have created an environment of fear "that prevents mining opponents from exercising their rights to freedom of opinion, expression, association, and peaceful assembly, and undermines their ability to defend themselves from the threats of mining".In its November 2018 review of South Africa’s compliance with the International Covenant on Economic, Social and Cultural Rights, the UN Committee on Economic, Social and Cultural Rights expressed concern about “reports of human rights defenders, particularly those working to promote and defend the rights under the Covenant in the mining and environmental sectors, being threatened and harassed". It recommended that South Africa provide a safe and favourable environment for the work of human rights defenders to promote and protect economic, social, and cultural rights, including by "ensuring that all reported cases of intimidation, harassment, and violence against human rights defenders are promptly and thoroughly investigated and the perpetrators are brought to justice". Mining activist Mariette Liefferink, who made submissions to the UN committee, tells how it has become increasingly difficult to work as an environmental rights defender in South Africa.   "There is an overwhelming body of evidence of intimidation, whether it is by means of frontal attacks or more insidious attacks on activists."International and South African law requires South Africa to guarantee the rights of all people to life, security, freedoms of opinion, expression, association, and peaceful assembly, and the rights to health and a healthy environment, say the authors."The attacks, threats, and obstacles to peaceful protest described in this report prevent many community activists in South Africa from exercising these rights to oppose or raise concerns about mines, in violation of South Africa’s obligations." 

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