Contentious gold miner CRG placed under liquidation

Several CRG employees at different levels of seniority told City Press that the company had not paid salaries since February.
Several CRG employees at different levels of seniority told City Press that the company had not paid salaries since February.

Almost 130 workers and suppliers of controversial mining company Central Rand Gold (CRG) are set to go without their salaries or overdue payments for an even longer period after the mine was placed under liquidation.

The troubled mining company, which has not paid salaries in more than four months and has previously been accused of not paying over salary deductions such as pensions, Unemployment Insurance Fund and tax, was placed under liquidation after one of its creditors got a court order for the company’s liquidation.

The security company contracted by the mine, Volsec Security, got a liquidation order against it over a debt of almost R1.6 million. A liquidator has already been appointed.

Two days before the liquidator, Jaco Venter, was appointed, City of Joburg also got an interim liquidation order meant to be finalised on May 26 if CRG did not convince the court otherwise.

Venter confirmed that he had been appointed based on the Volsec debt and liquidation order. Attempts to get comment from Volsec were unsuccessful.

According to the order, a copy of which City Press has in its possession, CRG owed the city just over R17 million for electricity and surcharges.

Another major creditor of CRG is West Rand Plant Hire. According to its director, Willem du Randt, his company is owed R2.2 million, but he says there are no plans to approach the courts yet.

Several CRG employees at different levels of seniority told City Press that the company had not paid salaries since February. Some of the managers had on several occasions been told CRG’s Chinese investors would be coming to the rescue, but nothing came of it.

At a meeting in Krugersdorp on Monday, the mine’s management told some senior staff that the debt to the City of Joburg had been paid up.

However, Joburg City spokesperson Nthatisi Modingoane said it still owed R18 060 158.80 after the final claims had been consolidated for the rest of the mine’s debt.

“The balance to date is R18 060 158.80. We signed a payment plan with them. They paid an initial R1.5 million and were supposed to repay the rest over six months, which they have failed to do. We have since terminated electricity. We proceeded with liquidation proceedings and we were granted a provisional liquidation order. Yesterday we completed and signed the liquidation claims for the debt,” he said.

After several attempts to get comment from the company’s chief executive, Dominique van Wyk, he finally responded on Friday, claiming he would be challenging the matter in court on an urgent basis. He declined to answer further questions.

Numerous attempts to get comment from Zolile Smous, secretary-general of the Building Allied Mining and Construction Workers’ Union, which is the majority union at CRG, also failed.

The company is not new to controversy. It previously had its mining licence cancelled by the department of mineral resources. It also counted Gayton McKenzie and Kenny Kunene, two former convicts turned businessmen, as minority shareholders. Two years ago it was reportedly bailed out with two loans by one of its shareholders, Jia Bang Wang.

CRG listed on the JSE in November 2007 with promises of one million ounces of gold production by 2012 at a production cost price of $320 an ounce, a target it didn’t come close to. Its annual production of bullion has not surpassed 10 000 ounces.

The company’s share price was also previously one of the worst performers on the JSE.

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