[FOLLOW UP] Mintails collapse: business rescue and liquidation
According to the business rescue plan, Mintails owed various creditors more than R1 billion, including the roughly R300 million shortfall in reclamation funding.
On 29 August the News reported on how Mintails Mining South Africa and several related companies had announced their liquidation, throwing into question the environmental rehabilitation of the highly-polluting operations on the West Rand.
Read here:
https://www.citizen.co.za/krugersdorp-news/363097/mintails-collapse-a-case-study-in-how-not-to-close-mines/
Mariette Liefferink, the activist chief executive of the Federation for a Sustainable Environment, tracked Mintails for more than a decade and is now working to intercede in the liquidation proceedings as the legal voice for what she labels the “mute environment”.
In a release compiled by Liefferink, she describes how Mintails fought for nearly three years to save the company through business rescue practitioner, Dave Lake, who notified the South Gauteng High Court recently of his intention to liquidate the company. A court hearing was scheduled and a liquidator will be appointed soon.
The business rescue plan called for the refurbishment of a gold ore processing plant, but according to a memo dated 1 August that Lake sent to the court and to affected parties, it failed when multiple investors ceased funding Mintails.
“There is no longer a reasonable prospect of rescuing the company,” Lake wrote in the memo.
The liquidator will now decide how to pay back creditors with the remaining assets. Environmentalists fear this process could leave environmental liabilities low on the list of what deserves money.
According to the business rescue plan, written in December 2016, Mintails owed various creditors more than R1 billion, including the roughly R300 million shortfall in reclamation funding.
Due to a web of involved companies, it remains unclear whether a large portion of the already insufficient financial provisions can be accessed for an environmental clean-up.
DRDGOLD Limited formerly held one of the mining rights and the corresponding trust fund that is now in the Mintails Group.
“DRDGOLD chief executive, Niël Pretorius, said via email that he believed the trust fund contained R18 million, but he did not identify the trustees, whose consent is vital to unlocking the money.
“Documents show the Mintails Group acknowledged that rehabilitation would likely cost between R300 million and R336,5 million, but it declined to top up financial provisions,” Liefferink said in her release.
According to the environmental management programme from one of Mintails’s mining rights, “These liabilities are also historic and pre-date Mintails’s involvement and should thus not be for Mintails’s account.” Experts debate this narrow interpretation of the law.
Lake also wrote in the business rescue plan: “The Mintails Group’s rehabilitation liabilities have remained largely unfunded for some time, and there are simply no free funds available to the [business rescue practitioner] to enable him to immediately provide such funding.”
To read more on this developing story, make sure you get your hands on next week’s edition of the News, in which Liefferink will delve into the rehabilitation fund of this mining situation.
Do you perhaps have more information pertaining to this story? Email us at krugersdorpnews@caxton.co.za (remember to include your contact details) or phone us on 011 955 1130.
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