There is – at last – a possibility that two ‘connected’ South Africans will be forced to pay the thousands of miners the wages they owe them.
Khulubuse Zuma and Zondwa Mandela (nephew of South African President Jacob Zuma and grandson of Nelson Mandela) bought an aging mine, with money they didn’t have.
They promised the miners the earth. And then gave them nothing, while they sold off everything they could lay their hands on.
I covered the story back in 2011. See my report below, but first today’s story from Bloomberg.
May 12, 2016
Supreme Court of Appeal dismisses Aurora directors’ case Court ruled directors responsible for destruction of assets
A nephew of South African President Jacob Zuma, a grandson of Nelson Mandela and three of their business partners had their case dismissed by the Supreme Court of Appeal Thursday after an earlier ruling held them responsible for the destruction of gold-mining assets near Johannesburg, labor union Solidarity said.
Khulubuse Zuma and Zondwa Mandela had taken their case to the SCA after Judge Eberhard Bertelsmann of the High Court in Pretoria ruled last year they were “indisputably reckless” in their management of Aurora Empowerment Systems and the five men were personally liable for the company’s failure. This may result in a bill of 1.7 billion rand ($113 million), according to Solidarity.
“This judgment is a major victory for the 5,300 workers who have been innocently plunged into poverty, and the rule of law has also triumphed,” Solidarity General Secretary Gideon du Plessis said in an e-mailed statement.
The company fraudulently misrepresented Aurora’s ability to pay for the Pamodzi Gold Ltd. mines near Johannesburg in 2009 when its previous owner was placed under provisional liquidation, the judge said in June. In the following two years, mine shafts were destroyed and equipment stolen, he said.
Vuyo Mkhize, a spokesman for Zuma, and David Swartz, a lawyer for Mandela and the other three men, didn’t immediately respond to requests for comment.
Mandela and Zuma gold mine ‘exploiting workers’
5 May 2011
A South African gold mining company owned by members of the Mandela and Zuma families is accused of exploiting its political connections to avoid punishment over its abuse of workers.
The company is also accused of profiting from selling mine assets it does not own – a claim it vehemently denies.
“I’m drowning in debts at the moment, and I don’t have any food because I have no income,” says Primrose Javu.
“We’re living in a very, very bad condition here.”
She is standing in the kitchen of her small three-room flat, proud of the furniture, TV and hi-fi she bought herself when she was getting paid for working hundreds of metres underground, in a gold mine.
But she knows it will not be long before the debt collectors come and take it all away.
“They can come to fetch it any time, because I am not getting any salary. This company called Aurora, they just ran away with our pay. We don’t get anything.”
Ms Javu’s employer, Aurora Empowerment Systems, took control of two gold mines just outside Johannesburg around 18 months ago.
Today, South Africa’s mining unions claim the company owes its workers more than 12m rand (£1.1m; $1.8m) in unpaid salaries.
The managing director of Aurora is Zondwa Gadaffi Mandela, grandson of Nelson Mandela. The chairman is Khulubuse Zuma, nephew of President Jacob Zuma. Another board member, Michael Hulley, is the personal legal advisor to the president.
Despite having no previous experience in the mining industry, a high court-appointed liquidator gave Aurora control of two gold mines after the previous owner went bust. Aurora outbid seasoned mining firms with an offer of 605m rand (£55.5m; $92m).
Since then, the company has been at the centre of huge controversy in South Africa, with critics claiming that the company has committed multiple legal and regulatory infringements, but has escaped any kind of sanction because of the significant political connections of its senior management.
When Aurora took over the gold mines in October 2009, it promised steady jobs, decent housing and education bursaries for the children of its workers.
“All these things, all these beautiful promises – that worried me,” reflects Frans Baleni, secretary general of the National Union of Mineworkers (NUM) – South Africa’s largest, most powerful union, and a close political ally of the ruling African National Congress (ANC).
“They started to seriously default on the payment of salaries in December 2009, and in the following year, 2010, for the first three months, they were not paying workers’ salaries at all.”
The BBC has repeatedly approached Aurora to request an interview with the company’s senior management, but they declined to speak or issue a statement.
Food for votes?
Many of the 5,200 mine workers employed at the two mines in Orkney and Grootvlei – to the south-west and east of Johannesburg respectively – have since been living on donations and food parcels provided by the unions.
Mamosa Nonyane was a former surveyor working on the Orkney mine.
“It’s very painful to live on charity,” she says.
Recently, the ANC also delivered food parcels to the workers at the Orkney mine. Ms Nonyane holds a plastic bag of maize meal, cooking oil and sugar, given to her by the party, but she is cynical about their motives.
“They are not helping us… they just want us to vote for them,” she says, referring to the local elections taking place later this month.
It was recently revealed that Aurora’s chairman had made a private donation of 1m rand (£91,400, $151,000) to the ANC, when his company is yet to pay outstanding wages to its workers.
The NUM has demanded the money be handed to the destitute miners, but the ANC has refused.
Former mine worker Primrose Javu is furious.
“Khulubuse Zuma gave one million rand to the ANC. For what reason? He gave it to them just to shut [them] up. They must shut their mouths. They mustn’t say anything about these conditions,” she says.
And indeed the ANC has been silent. Mr Baleni says there is one clear reason for this.
“Because of the names which are associated with this saga, we have got a barrier. The ANC has been very silent on this – not a single word, not a single statement.”
At Aurora’s Grootvlei operation there is an open hole in the ground, 400 metres deep, at the mine’s Ndlovu shaft.
It is all that is left of what was one of the country’s most modern mines, opened in 2008 at a cost of 40m rand (£3.6m; $6m) – a year before Aurora took control of it.
The mine has since been stripped bare and its headgear and machinery sold off for scrap, it is claimed, by Aurora themselves.
“What you see here is the best description of daylight robbery, because Aurora don’t actually own the mine,” says Gideon du Plessis, deputy general secretary of Solidarity – the union representing mainly white and skilled mine workers.
Since taking over operations in 2009, Aurora has never secured the financing to buy the mines outright as it had planned.
This is despite company chairman, Khulubuse Zuma, boasting to South African media that the company had “deep pockets” promising profits of “5 to 10 billion dollars” in the first 10 years of business.
“Some people believe Aurora were never interested in running a gold mine, and that from the beginning they realised there’s a lot of money to be made in selling scrap and mining equipment,” said Mr du Plessis.
The company has strongly denied they stripped the mines, and says the equipment was stolen by illegal miners – a significant problem in South Africa.
Mr du Plessis thinks it highly unlikely illegal miners would have had the trucks and equipment to completely dismantle a mine shaft, let alone do so without being caught.
The closure of the shafts at Grootvlei has severely affected the local economy in the nearby town of Springs, where local pawn shops are full of furniture, TVs, fridges, and even clothes, sold by former Aurora workers – black and white – struggling to make ends meet.
“We had to sell some of our curtains, our crockery, a lot of stuff,” Susan Ferreira says, forlornly.
“It’s things you get over the years, and it breaks your heart to do a thing like that, just to get some food on the table.”
Mrs Ferreira’s husband, Marius, worked at the Grootvlei mine, and like many others, saw his pay packet dry up over a year ago.
The Solidarity union says the company owed Mr Ferreira approximately 170,000 rand (£15,500; $25,600).
“He stressed a lot, and said he couldn’t go on any more. And my husband took his life – he’s gone.”
Tears stream down Mrs Ferreira’s cheeks.
“He said he’s tired of life and he can’t look after me like he did before, and he drank some poison. I didn’t ever believe he’d do a thing like that. I was shocked.”
Over the past couple of years, Aurora have made repeated public statements declaring a finance deal was ‘imminent’, and the problems will be resolved, but the money has never materialised.
The latest suggestion is that a Chinese state-owned company, Shandong Mining & Exploration, is to invest $100m (£60.6m) in the two gold mines.
While the mining unions and its members hope that this proposal comes to fruition in order to restore jobs, it will come too late for former miners like Mr Ferreira.