Lily Mine Investigation: update

Meeting report

The Chairperson told Members that the purpose of the meeting was to get to the bottom of what had happened at Lily Mine in 2016.

He told the delegations that following the incident at Lily Mine, the Committee had sent a letter to the chief executive officer (CEO) of Vantage SA in order to allow them the opportunity of being a part of the resolution process. However, the response the Committee received from the CEO was that he did not see the need to attend the Committee meeting, because the business rescue practitioner (BRP) had all the information required by the Committee. He told the delegation that the reason the Committee was inviting the management of Lily Mine was so that the management could tell the Committee about the findings of the internal inquiry into the collapse of Lily Mine which had resulted in three workers being trapped underground, to find out the action management had taken after the inquiry and why there was no evidence of any action that had been taken by management.

The Chairperson asked that Members be sensitive to the families of those mineworkers who had died at Lily Mine, and to keep in mind that the purpose of the meeting was to find a solution to the problem at hand and to ensure that there were consequences for any acts which were not in line with the due processes.

Mr Thabo Mokoena, Director-General (DG): Department of Mineral Resources and Energy (MRE) said it was unfortunate that the Department was appearing before the Committee on a matter which should have been resolved a long time ago. The Department planned to give an account of what had been done in relation to the accident which took place at Lily Mine four years ago, as well as give an account of what they believe should be done in order to address the matter.

The DG gave a brief background summary of Lily Mine, and explained what had happened which resulted in the accident which trapped three workers underground. At the time of the collapse there were 76 mine employees underground, and the three were trapped in the lamp room. Rescue operations commenced immediately and 76 mine workers were rescued, but the three trapped in the lamp room could not be rescued due to conditions being too dangerous, and those employees were still underground.

Lily Mine Accident and Investigation Inquiry

Mr David Msize, Chief Inspector of Mines, referred to the schematic representation of the mine and told the Committee that the mine had started off as an open pit mine, but a decision had been taken to go underground due to cost implications. He said that this was a normal decision

On the day of the collapse, the western part of the crown pillar had collapsed, with the infrastructure above it. After the accident, with the challenges the Department faced in terms of safety underground and after the business rescue operation, a decision was taken to initiate an investigation which was done on February 2017. The investigation was converted into an inquiry which commenced on 6 March 2017 and after the inquiry was concluded, closing arguments were received from all stakeholders and the presiding officer had generated a Section 72 report.

A copy of the report, along with the findings, was submitted to the employer as well as the National Prosecuting Authority (NPA), with recommendations for prosecutions. The outcome of the report was also presented to the families by the Department.

The Chief Inspector presented the recommendation, and said it had been discovered that there had been prior accidents which had taken place and had not been reported. He also commented that the accident of 5 February 2020 had been unprecedented.

Inquiry Report Recommendations

Besides the technical recommendations that the Department had made, it had also recommended that the NPA declared the missing employees as presumed dead. Since then, the Department had been working with law enforcement and the NPA, since the NPA could not prosecute until this happened. It had been engaging with the families of the deceased to make sure that this happened, after which the matter could be concluded

Another recommendation that the Department had made was that the NPA prosecute various employer representatives on charges of culpable homicide and contravening various sections of the Mine Health and Safety Act. The report also recommended that the Department consider an administrative fine in terms of the provisions of the Mine Health and Safety Act.

Lily Mine Progress Report

Mr Msize said that the Department had been engaging with future prospective buyers, business rescue practitioners and organised labourers to try and find a solution to the issue of Lily Mine, as it was still believed that there was still value at the mine and the sooner the mine could be reopened, the sooner the recovery process could begin. There is still an opportunity to employ about 600 workers from the community.

The report recommended that there must be a new decline developed to go underground, and also a new ventilation shaft in order to clean out the air underground for when operations on the new mine commenced. The new decline would also make it easy to send equipment underground for the recovery process.

DG Mokoena said that with regard to the engagements of the Department, when there was a disposal of assets, the Department was required by the law to follow the Mineral and Petroleum Resources Development Act (MPRDA) Section 11. In 2018, the Department had been compelled to approve Section 11 so that the new owner could take over the mine.

In the process of disposing of the mine, there were disagreements between the Business Rescue Practitioner (BRP) and the new owner of the mine, which had resulted in the process being delayed. Subsequent to that, the Department had convened meetings with the families and ex-employees of Lily Mine in order to keep them informed about what was happening. During this meeting, one of the directors of Lily Mine was invited, and the BRP was also present, and they all deliberated on the issues and highlighted the importance of the matter and having it finalised as soon as possible.

The DG said that following this meeting, at the end of March the Department went to Nelspruit to meet with the families, members and ex-employees. During this trip, the Department agreed with the families of the mine-workers trapped underground that the families needed to open a missing person’s case due to some constraints in terms of the law. He reported that a case had actually been opened and a case number had been allocated and reported to the families.

What was frustrating was that the Department was responsible for the administration of the MPRDA, but at the same time the Company’s Act, according to which the BRP was appointed, made operations challenging. As law-makers, the Department would come back to the Committee on the issue of BRPs.

The BRP had a responsibility in terms of the law over the existing management to take certain decisions in the best interests of the company, creditors and other parties that were a part of the process. The matter had gone to the courts, starting at the High Court in Nelspruit, and was currently with the Supreme Court of Appeal in Bloemfontein.

Mr Mokoena said the Department had convened all parties which were competing for the asset, to give them an understanding of how the family members felt about the delay in the transaction, so that where there were disagreements the parties needed to sort them out. Throughout the Department’s interaction, after being directed by the Minister, the process had yielded results because the black economic empowerment (BEE) companies had decided to withdraw, and this meant that only one company, ArqoManzi, was left.

The Department had called the CEO of Lily Mine to come to the meeting and advised that since the mining sectorwas a highly regulated environment, the decision to dispose of the asset should not be delayed. If parties were going to be arrogant, this was going to create a problem for the Department in disposing of the asset. It was better for the parties involved to develop an understanding that those who had decided to go to court should try to find a solution in the form of an out-of-court settlement.

He told the Committee that the issue that the Department had to deal with now was that the current owners of Lily Mine needed to support the plans that the BRP was proposing in order to move forward, and in order for the mine to be disposed of. The Department had done everything within its power to resolve the matter before resorting to the termination of the mining rights of the Lily Mine management, which could be a lengthy process.

Vantage Goldfields Group Presentation

Container Search and Recovery

Mr Rob Devereux, business rescue practitioner at Lily Mine, said that throughout the four-year period, the retrieval of the container and the rescue had remained an integral part of every plan that had been looked at during the process.

As things stood, the mine was under care and maintenance, and security had been maintained by private security as well as through various operations, by the South African Police Service (SAPS).

The BRP was acutely aware of the illegal mining at Lily Mine, and that he believed that the issue was under control. He said the management of Lily Mine and the BRP would continue to secure the mine, together with the assistance of the SAPS.

Mr Devereux said the position of the BRP was the same as that of the Department of Mineral Resources (DMR) which was that the container underground must be retrieved under safe and controlled conditions. What Mr Msize had referred to was exactly what had been proposed four years ago, and was something that the BRP was looking to enforce. In order for the BRP to enforce the proposal, a new investor for a new decline was needed in order to retrieve the container from underground and at the same time not endanger more lives.

Current Transaction

Currently, the BRP had proposed offers to creditors via their new business plan, as directed by the court, from the company ArqoManzi.

There had been delays in the transaction due to the fact that Vantage SA, a company above the companies in business rescue, needed to agree certain terms and conditions of rescue. It was important that Vantage SA agreed, because if they did not it would result in further litigation costs which would be disastrous for the BRP, as they are running out of money for litigation costs. Failing to conclude the transaction would also have disastrous consequences and result in the BRP running out of money for securing and maintaining the mine.

The business had not yet been placed into liquidation because the BRP believed that there was still a reasonable prospect for the mine, which required investments, to be reopened.

A part of the transaction BRP had with ArqoManzi required that all litigations by all parties be withdrawn for the transaction to occur.

Transaction with Vantage SA

Mr Devereux said the issue was that all transactions within the business rescue process had been happening with companies which were above business rescue. He explained that there had been an agreement between Vantage SA and the  Siyakhula Sisonke Corporation (SSC) subsidiary, Flaming Silver, signed in March 2018, which was cancelled by Vantage SA in March 2019 and which had resulted in litigation.

Another company had entered into the scene, whose agreement was signed with Vantage SA around March 2019. The status of that particular transaction was confusing, because the practitioners did not have any domicilium for it, and Real Win Investments would not provide the practitioners with any proof of funds.

Litigation

Mr Devereux said there was litigation in August 2018, where an application to liquidate the Barbrook and Lily Mine was brought forward. Those liquidation applications were successfully defended by the BRP.

The rest of the litigation occurred outside of the business rescue companies. There had been an application brought in August 2018, which had been an internal dispute between the Flaming Silver/SSC director and the company, and the matter had been further supported by Vantage SA -- the company above business rescue. He said this matter was still under appeal.

ArqoManzi/SSC and Vantage SA had a case against one another, where the judge had ruled that the BRP had to provide a new plan and give their proposal to creditors and vote upon it. The decision was currently under appeal.

The significance of the new plan was that the Company’s Act had specific voting rights for dependent and independent creditors. The way the voting rights stood was that any vote on a plan would potentially end up in court, hence there were discussions with stakeholders to withdraw all court cases and come to an amicable agreement.

He informed the Committee that there were timelines in place for the plan, which the BRP had discussed with ArqoManzi, which would allow the BRP to open the mines and continue with the retrieval of the container.

Discussion

Before taking questions, the Chairperson read out a letter which he had just received from the management of the Lily Mine.

Mr K Mileham (DA) expressed his condolences to the families of the deceased, and said he hoped that the matter would be resolved very soon. He asked how deep the container which needed to be recovered was, and what was preventing the business from recovering it. He also asked the DMR had rescue practitioners and if so, what it was doing to retrieve the container. He asked if the NPA had prosecuted anyone yet and if not, why was that the case. What other actions, such as disciplinary action, had taken place as a result of the inquiry being completed? He asked the BRP what the current court status was of the case which had gone to the Supreme Court of Appeal, and when the case was likely to be finalised.

Ms C Phillips (DA) referred to a slide in one of the presentations where it was mentioned that this type of collapse was unprecedented. If that was the case, how would it have been possible to foresee that it would happen, and what would have been the indicating factors that there were risks present? She pointed out that there was no mining works programme which had been submitted, and asked who the negligent departments or people were who should have followed up and made sure that mining works programmes had been submitted.

She referred to the diagram, and noted that there were more surface structures next to where the container was. She asked if these structures they were still standing, and if they were also at risk of collapsing. She also raised the point that Members had been presented with a letter from SSC, and asked if SSC had been invited to make a presentation to the Committee. If so, why had they not attended, and if they had not been invited, why was this the case? 

Ms N Hlonyana (EFF) asked the Chief Inspector to clarify if there had been any outside expertise and advice on how the rescue could be conducted, since what had happened had been unprecedented. She told the Chief Inspector that if a risk assessment had not been done, despite there having been a prior collapse of pillars which had not been reported, that would have been the highest level of negligence that she had ever seen, and it seemed that people had been put underground just to die. Did he think a charge of culpable homicide would be appropriate?

She said that Mr Mark McChesney’s failure to show up after being invited to appear before the Committee was an insult to the entire nation, and something had to be done about that.

She asked the DG what it would take for the Minister to cancel the mining rights of the company.

She told the BRP that she did not believe that Vintage SA had the intention of selling, since they had received many offers which they chose not to accept. She also asked why BRP could not help to prevent the situation if BRP had been with Vantage SA for the past four years.

Mr D Mthenjane (EFF) said he felt that the BRP did not care about the lives of black people. He questioned how it could have been that a business was under business rescue for four years, yet no progress had been made on the matter. He asked Mr Devereux if there had been any mining company which he had rescued prior to Vantage SA. He also requested that the BRP explain whether or not in the four years there had been any offers to the businesses under business rescue, and if there had been, why they had not accepted these offers.  He also asked that Mr Devereux disclose how much money Mr McChesney had paid him to lie on his behalf, and whether or not he knew of the company SSC.

Mr Mthenjane accused the BRP of looting the mine, and asked why they had been doing that. He claimed that he had proof that BRP was sending cranes down to Lily Mine to fetch machinery, as well as using illegal miners to dig up gold to send to the BRP. It was very sad to have people calling themselves business rescuers while they were looters.

Directing his question to the Department of Mineral Resources and Energy (DMRE), he asked about the wrongdoings on the mine by previous companies, and wanted to know if this company had had a safety officer. Had the DMRE conducted regular checks on mines in South Africa and if so, when last had it gone to Lily Mine prior to the accident?

Mr Mthenjane accused the DMRE of being captured, and asked the Department to disclose how much money they had received from Mr McChesney. It seemed that they did not care about the families of the victims, as they had not even bothered to visit them, like they had claimed. The things the Department were doing were worse than what had been done under apartheid, and they were depriving the families of the victims of closure from the loss of their loved ones.

The Chairperson asked the Members not to make allegations which are not substantiated. He explained that there were clear rules to allegations about Members of Parliament, and the rule was that Members should put them in a substantive way so that the House could deal with the matter. He explained that since Deputy President David Mabuza’s name had been mentioned in the Committee, it may seem like the Committee was making the accusation.

Responding to Ms Phillips’s question, the Chairperson said that what had been discovered during the discussion was that SSC was a company which had expressed an interest in acquiring the mine, but the same person at SSC was said to be a director of Vantage Gold. Since, in their letter to Vantage Gold, the Committee had not specified who exactly was being invited to appear before the Committee, there seemed to be a conflict of interest amongst the directors of Vantage Gold. The Chairperson also explained that since the Committee did not know how many companies had expressed their interest in acquiring the mine, if word had come out that Parliament had invited one company over the others, it would have painted a different picture to the nation. The Committee had therefore decided to err on the side of caution.

The Chairperson said there were three parties which had to account as to why after four years, the retrieval process was still not complete. These three parties were the DMRE, the BRP and Vantage Gold. He explained that he had been avoiding the Committee entering into a discussion about a commercial transaction instead of the accident that the three parties needed to account on.

The Chairperson said the Department did not make any laws – it was Parliament that did this -- and if the Department was looking to change legislation, it had to be proactive and bring the matter to Parliament.

Response by DMRE and BRP

Chief Inspector Msize responded to the questions about foreseeing and preventing the Lily Mine accident. In terms of foreseeing the accident, he had to repeat and emphasise that this accident was unprecedented, and that in the historical mining areas there were areas which had been built over mining ground, so it could be done safely, and it was difficult to say whether the accident could have been foreseen.

The reason the Mining Health and Safety Act required mine employers to report accidents was so that the accidents could be investigated by the mine, as well as the Department.

What had prevented the rescue in the past four years was mainly the issue of funds and ensuring that the mine remained open. Once the issue of ownership at Lily Mine had been resolved, the Department would be able to develop the decline which would help to access level four area, to retrieve the bodies as well as to sink a ventilation shaft.

On whether the Department had mine rescue resources, he said the South African mining sector utilised a centralised service called Mine Rescue Services (MRS), which had assisted during the Chile accident where mine workers had been trapped underground for 69 days. What the Department had done, along with MRS, the Colliery Training College (CTC) and the Mineral Council of the Chamber of Mines, was to organise for a similar hole to be drilled underground in order to see if the bodies trapped underground could be retrieved.

Regarding the possibility of NPA’s prosecutions, he said that people needed to be declared deceased before there could be any prosecutions.

Responding to whether or not the DMRE had sought outside expertise, the Chief Inspector told the Committee that the Department had called around the world to see if there could be any assistance with the emergency situation, soon after the mine had collapsed. The Department had also engaged its local research entity, the Council for Scientific and Industrial Research (CSIR) and the Defence Force, to see if there was any technology to locate the container underground.

On whether the Lily Mine accident should be classified as a culpable homicide case, he said that the DMRE would be advised by the legal team and the NPA. He added that there were appointments at the mine of general managers and safety officers in terms of the provisions of the Mine Health and Safety Act.

Regarding inspections and audits on the mine, Mr Msize said that inspections and audits had been conducted, with the last inspection being conducted in late 2015. The Department had issued a Section 54 instruction, which was an instruction that was issued after an inspection if it had been discovered that the hazards underground might have been detrimental to the workers. Normally, when a Section 54 instruction was issued, operations at the mine or in a section of the mine would have to be halted while the employer conducted a comprehensive audit of the workings with the health and safety committee to see if there were any other transgressions to prevent.

Mr Mokoena responded to the question regarding Section 47, and said that the cancellation of mining rights could happen if there was non-compliance by the mining-rights holder in terms of honouring the Mining Rights Charter, and also if there was non-implementation of the commitments which the mining company had made. This would be after an assessment had been conducted to figure out if the company had complied with the requirements, and only after that could the Department refer the company to the Minister to consider terminating the rights of that company. The process could be a very long one, and that was why the Department was trying to resolve the issue within a short space of time.

The DG acknowledged that the Department had been appearing before the Committee for a while and Members had been asking the question for a while. He said the industry was a highly regulated one, and when certain things were done and if the Department was to act outside of the court orders, they would be in contempt of the court order, which could result in arrest for members of the Department. He explained that in terms of Section 11, the Department had done everything necessary to try and address issues timeously.

The DG said he had not lied about meeting the families of the victims, and that he had provided the Committee with the dates. Officials of the Department from the regional office had also met with the families on site.

The DG responded to the allegation that Department officials had been paid. He said that as the accounting officer he took the allegation very seriously, and would like to take the matter up with Mr Mthenjane. After the Member provided the Department with information and evidence, an investigation would be conducted.

The Department was committed to ensuring that the matter was resolved amicably, and the Department had done what they were required to do by law. Now it was up to the BRP and Mr McChesney to implement the recommendations and remedial actions which came from the inquiry.

Mr Devereux responded to the question on how deep below the ground the container was. At the time of the collapse, the container was believed to be 30-50 metres below surface level. He reiterated that during the mine rescue services, various technologies had been used to locate the container.

As the practitioner, his duty was not only a financial one, but also to ensure that the container was retrieved.

He said that the day after the collapse was effectively the day Lily Mine stopped generating revenue, and Barbrook had suffered. It was also the day that Vantage Australia and various shareholders had decided to stop putting money into the company. As a result, the company had had to borrow cash and sell assets in order to keep the mine secure.

Speaking on the current status of court cases, Mr Devereux said that in the first court case, the judge had ruled in favour of Vantage SA, and Flaming Silver had appealed the ruling. SSC was party to the Flaming Silver agreement. The appeal verdict had not yet been given, but should be given in March.

The second court case -- between ArqoManzi and Vantage SA -- was the one which was prohibiting him from publishing the second plan, as it had been appealed by Vantage SA. Papers for this case had to be submitted by Thursday of the current week, and if something were to happen, the ruling on the case would be expected sometime in February 2021.

Mr Devereux said there were structures around the collapsed areas, and these were various container-type offices about 50m from the collapsed area. The new decline would be built far from the collapsed area, and the offices would also move.

On the question of to what end the business was being rescued, he said both mines required money to open, and currently the business was faced with the issue of shareholders not being prepared to give BRP money and BRP having to be the ones to seek investments themselves. He raised the point that whenever BRP had an investment, the investment got countered by Vantage SA or Vantage Australia. There had been many investors interested in investing in the mine, with the latest investor being ArqoManzi, which had approached Vantage SA but had been turned down. They had then approached BRP, which had now started the process with the DMR to seek clarity and conclusion of the matter.

Mr Devereux responded to the accusation of not valuing black lives, and said he took offence to the comment as he believed that all lives mattered, regardless of race, creed or colour.  He also took offence to the comment that he was involved in illegal gold mining, and asked for evidence for such a claim. He worked closely with the Hawks in order to try and resolve the issue of illegal mining on Lily Mine, and he clarified that the recent death of two miners was a result of faction fighting on the mine.

BRP had started an operation, in anticipation of a transaction being completed, with the security of the BRP as well as the police, to clear up the surface and the underground area. BRP was also looking at areas around the mine where the production of gold was occurring.

Regarding the various assets which had been moved, there had been various assets which BRP had had to sell, and the money was used to pay for security by the company.

On his fees, Mr Devereux said that over the past four years, he had not taken any money. On the contrary, the BRP attorneys which were responsible for saving the mine had also not been paid. He had kept the mine going solely on the basis that there was a reasonable prospect of saving the company and avoiding liquidation.

Mr M Mahlaule (ANC) told the Committee that Mr McChesney’s behaviour was unacceptable, and attention needed to be paid to it  He told the DG that he felt the Department had been too lax on the owners of Lily Mine by not revoking its mining rights after it had been discovered that it had violated the Mineral Health and Safety Act.

Directing a point at the BRP, he said there were people who were affected by the incident at Lily Mine and were complaining about the duration it had taken to rescue the company. He asked Mr Devereux if these people were a part of the rescue plan as well and if not, why that was the case. He added that there were liabilities that every player had to carry, and BRP was liable for “any act or omission amounting to gross negligence in the exercise of the powers and performance of practitioners”. BRP had a business and rescue plan, and where they had to perform and were not performing, they had to be held liable for that.

Mr Mahlaule said it was inhumane that the three bodies trapped underground had still not been retrieved while BRP was waiting for investors. He asked Mr Devereux how, as an expert, he had not managed to fulfil his task.

Finally, he asked when Mr Devereux had last visited Lily Mine because the issue of “zama-zamas” could potentially cause another incident once the mine was reopened and fully functional. What was he doing to ensure that illegal mining did not happen on the mine?

Mr M Wolmarans (ANC) asked the DG what the cost of the operation was over the course of the four years which had passed, and what the cost implications of retrieving the workers underground were.

He pointed out that offers had been made to the mine owners which had been rejected. He asked whether or not main priority was capital profit or the retrieval of the bodies underground. Apart from the rescuer not being paid, was the management of the mine a part of those people who had not been paid? Had other rescued miners been remunerated?

He asked who would be responsible for enforcing the Mining Works Programme, and what role the Department was playing in enforcing Section 11 when investors had presented themselves, and yet the mine was still not operational. 

Ms V Malinga (ANC) said she had been following the developments of the case closely on the television, and heard family members saying that the Department had not been assisting them in anything. She had been surprised to hear the DG telling the Committee that the Department had been engaging with the families. The BRP had told Members that for four years they had been providing security on the mine, and yet people were killing each other on the mine.

Despite Lily Mine being under business rescue for four years, the operation was still not yielding the desired results, which was to retrieve the container. She also expressed her concern that every political party would use the pain of these families to score points. She had not heard anything from the Department about the people who had appeared on national TV trying to retrieve the container for traditional/ religious purposes. That would have resulted in another problem had something happened to those people.

Ms Malinga also expressed her confusion as to why the NPA had told the Department to advise the families to open a missing person’s case, when it was known that the persons trapped underground without any air would fall into a coma. She asked about Mr Arendse, who had said on television that they would need about R8 million to retrieve the container. Was there a possibility that the container might have moved from where it was last noted to be?

Finally, she asked if the Department had taken any action over the unreported incidences which had been discovered during the investigation the Department had conducted.

The Chairperson asked the BRP if the important matter at hand was to rescue the container trapped underground. What was the purpose of the rescue practitioner on the matter when there was a failure in mine health and safety compliance? Thirdly, was Lily Mine operational and if it was not, why was it under rescue?

The Chairperson said it appeared that the priority of Vantage Gold was to satisfy their greed, and not to retrieve the container which was trapped underground, as they had had the audacity to reject the various offers which had been made to them. He asked the BPR to take tell the Committee how much it would take for Vantage Gold to satisfy their appetite. He also told Mr Devereux that the Committee needed to see the business plan which the court had ordered the BRP to draw up in order to hold it accountable.

The Chairperson asked Mr Msize how frequent the inspections the Department had conducted had been, as in a period of six years more than 10 pillars had failed. He also asked if there had been frequent inspections which were never recorded, why inspectors did not have access to the records during general inspections, and exactly what process the inspectors followed when inspecting the mines. He condemned the fact that there had been a consequential effect in the public sector, and asked if the inspectors had been made to account for how this had happened when they were supposed to be doing their duties.

He asked which employer would carry the fine imposed on the management of the mine if the transaction between Vantage Gold and a prospective buyer had taken place. If the transaction had already taken place between Vantage Gold and a prospective buyer, how would Vantage Gold still be held accountable for the incident that had happened under their management?

Seeing that the incident at Lily Mine was unprecedented, he asked Mr Devereux whether or not he had dealt with a similar case in the past, and what his expert knowledge would be that qualified him to deal with this particular case at Lily Mine.

Before giving the delegations an opportunity to respond, he asked who would be responsible for developing the new mine shaft.

BRP and DMR’s response

Mr Devereux replied that he was not a liquidator. By profession he was a chartered accountant, and had been involved in turnarounds of companies on an informal basis before Chapter 6. He was a senior business practitioner and had been a practitioner for eight years. His company purely did business rescues with experience in mining. His company surrounded itself with experts in the industries within which they operated.

Going back to the retrieval of the container, he said this was a critical part to the rescue plan. He agreed with the Chairperson that it was quite possible that the bodies were no longer in the container, but with the DMR, the BRP was planning on doing its utmost best to retrieve the container. There had been efforts to retrieve the container, but it was important that in the process no other lives were endangered.

Regarding the business rescue of the company, Mr Devereux said he had never come across such a case before, but within the business rescue plan, the retrieval of the container was very central, as well as reopening the mine and creating jobs. The responsibilities of a business rescue practitioner were to produce a plan which would be approved by relevant parties within specific timelines. He explained that the timelines had been left open, and in meetings with stakeholders it had been agreed that the business should be saved and not put into liquidation. Litigation processes among involved stakeholders had muddied the plan and resulted in an impasse in the process.

He said it was believed that the decline was the best way to retrieve the container, and that was a cost that would be incurred by the new investors.

Mr Mokoena replied to Ms Malinga’s comment on reports that had been made of illegal miners. He said that immediately after the DMR had seen the reports, they had called the BRP to ask what action would be taken. The BRP had told the DMR that security would be strengthened on the mine, and the DMR had also sent inspectors following the report.

He clarified that the BRP had not been assigned to the project simply for the financial factors only, but had also been assigned because of the dangerous working conditions on the mine.

Chief Inspector Msize responded to the question relating to the cancellation of mining rights. He said the Department needed to comply with conditions clearly stipulated for the mine right holder. The Department had hoped that the matter would have been resolved by now, since going via the route of Section 11 could prolong the process.

The Chief Inspector said that their ultimate goal in the process was to ensure that the container was retrieved, and to ensure that the mine went back into operation. The DMR could not enforce Section 11, because it still needed to be executed. He said it was the Department which was responsible for the Mining Works Programme, and overseeing the compliance with it

The Department had visited the families. However, until the missing persons were declared deceased, the Department could not confirm the status of the missing employees.

Mr Devereux said he could not disclose the amounts on the cost of the mine, as these amounts were not public knowledge.

The Chairperson told Mr Devereux that in the letter that Mr McChesney had written to the Committee, Mr McChesney had stated that Vantage Gold would be represented by BRP, and that BRP would have all the necessary information required by the Committee. The Committee needed to have the “necessary funding” amounts disclosed in order to make a decision. Mr McChesney had committed himself, through his letter, to cooperating with the Committee.

Mr Devereux said the cost of opening the mine was in the region of R200 million to R240 million. The purchase price of the mine was an agreement between Vantage SA and ArqoManzi. This agreement was outside the ambit of the BRP.

The Chairperson handed over to the delegation of Lily Mine to make a comment.

Lily Mine comments

Mr Wendel Bloem, an attorney representing the families of the Lily Mine victims, told the Committee that what they had seen so far was that there was a Department which was saying that there had been attempts, but nothing had been done yet. There was also a BRP which was saying its main focus was the retrieval of the container and opening the mine, yet in reality nothing had happened. In four years, there had been a lack of political and business will to retrieve the bodies stuck underground.

Responding to Mr Devereux’s comment on trying to minimise litigation, he said that litigation would resume on a much higher scale from the side of the family should there not be resolution to the matter.

He proposed that should a body not be established that would involve the DMR, the BRP and the families involved would report back to the Committee regarding progress on the matter. He said it seemed that Mr McChesney was intentionally delaying the process in order to avoid criminal prosecution.

Mr Mazibuko, a family member of one of the victims, said that so far a lot had been said but nothing had been done, and lies had been told by the various stakeholders who were involved in the matter. He agreed that it seemed that this issue was more of a commercial campaign for Vantage SA. He said there had been correspondence between BRP and the families, and it did not make sense that BRP was claiming that they were seeking funding from investors when there were willing investors in the process.

Mr Mazibuko said they did not have confidence in the BRP, as they were corrupt and had allowed the mine to be looted, and so far had not communicated with the family. He appealed to the Committee that if it had the power to remove the BRP and Mr McChesney, that they shouldto assist the families and grant them the permission to retrieve the container themselves.

The Chairperson asked the Committee to deliberate on what they have heard so far.

Mr Mileham asked for clarity on whether the BRP was responsible for any of the court cases which were currently before the court.

Mr Devereux said that the first litigation, whose outcome was expected to be released around March, was within the Flaming Silver camp had been joined by Vantage SA. He explained that BRP had no say in the matter. The second litigation was between ArqoManzi, the current potential investor, and Vantage SA again. In this situation, BRP also had no say in the matter.

Further discussion

Ms Malinga told the DG that her previous question had been based on what she had seen on live television, where the families had been saying that the Department had not been engaging with them. She asked who was telling the truth. She also wanted to know why the Department had decided to appoint the BRP, as BRP had not been assisting the family and Mr McChesney had been allowed to disregard the Committee. She asked the Department to clarify what their key intention was regarding the situation so that the Committee could be in a better position to advise them.

Mr Mahlaule said the intention of the Department was to provide a way forward without going back to the discussion. There were some situations where limited information had been provided, and if they were not expanded on, the Department would have limited information to assist the situation. He listed these situations the BRP’s rescue plan. He said that if the business plan could be given to the Committee, that would help to guide them. There had been an issue where inspectors had not reported, and he suggested that the Committee get information on whether there had been reports on these unreported incidents or not. He questioned whether or not, after receiving the information, the Committee could determine if the Minster should go ahead with the mining right issue.

Mr Mthenjane said it was a good thing to try and speed up the process and to try and get a solution to the issue. It appeared to him that the DG might have been misled by his region, because what was happening in Mpumalanga was not what had been reported by the DMRE. He asked what the Department had done to ensure that the people who had not followed protocol on the day of the accident were being held accountable. He suggested that Mr Devereux be removed from the case of Lily Mine and that the DMRE work with Mr McChesney to speed up the process.

Ms Phillips asked for an extract that had been referred to in a letter from Vantage Gold. She also referred to the accusations that were made in a letter from Vantage Gold, and said that Mr McChesney needed to appear before the Committee so that those accusations could be interrogated.

She suggested that there be negotiation over the money that was going to be used to retrieve the container be credited to the fines which would be issued against the company at a later stage.

Ms Hlonyana told the Committee that it was very unfortunate that a company from Australia could come into South Africa and make a profit from the mines, but could refuse to assist in a problem for which they were responsible. This was an example of why mines had to be nationalised. Vantage SA had failed to follow procedures and do risk assessments because their intention was to derive maximum profits from their operations. The priority was to find the money to retrieve the bodies trapped in the mine, and to buy the mine back

Mr M Nxumalo (IFP) asked what was currently happening to those people who had lost their jobs after the closing of Lily Mine. He also suggested that the Committee assist and chargethe Department with the responsibility of acquiring the money needed to rescue the container in order to give the families closure.

Mr Mileham asked who had had appointed the business rescue practitioner, and what powers the Committee had to force the Department or private company to do anything. He proposed that the Committee set up a quarterly reporting session on the recovery of the container and the resumption of operations at Lily Mine. He also reminded Members to be careful about what they decide should happen on the matter, because the Committee did not have the power to force the company to act in a certain way.

The Chairperson clarified that the BRP had been appointed by the court, and that Mr Bloem had only been making a suggestion on what should happen. The Committee had the power to force the Department to take a certain action, but what the Committee had no jurisdiction over were commercial transactions.

He suggested that the Committee should write a report to the Speaker or House Chairperson about the conduct of the CEO of Vantage Gold, and seek guidance on what the Committee should do. He asked the Committee to accept the request to give the family an audience to express their grievances.  He also suggested that the Committee give Mr Arendse an opportunity to appear before the Committee, as he had taken the time to write to the Committee.

He proposed that the Committee should make a request to the Speaker/ House Chairperson to have a delegation visit Mpumalanga for an inspection tour. On the point of paying out the money required to retrieve the container, he said the Committee needed to look at the legal implications of the decision, and also avoid setting a precedent of bailing out companies when they had failed to play their role.

He concluded that the Committee needed to find a way in which they could escalate the issue, and should look into involving the government in trying to find a solution. He also suggested that the Committee request the rescue plans and status reports of Lily Mine between October 2009 and August 2015. The Committee should consider whether or not there was a need to do a legislative review.

The meeting was adjourned.