1 PRESENTATION to Portfolio Committee on Mineral Resources on the AURORA: GROOTVLEI & ORKNEY 27 MARCH 2013 DEPARTMENT OF LABOUR REPUBLIC OF SOUTH AFRICA

2 PRESENTATION OUTLINE 1.Purpose 2.Background 3.Progress since the last report on Grootvlei - Claims for unpaid wages - Unemployment Insurance Fund payment 4.Progress in Orkney - Claims for unpaid wages 5.Progress on liquidation of Aurora

3 1. PURPOSE To brief the Portfolio Committee on Mineral Resources on progress to date regarding non payment of wages and salaries to workers at the AURORA Grootvlei Mine and AURORA Orkney

4 2. BACKGROUND RE: GROOTVLEI During the last report presented to the Portfolio Committee on Mineral Resources, DOL reported that a claim for unpaid wages was successfully brought to Court As a result of the Court order obtained we were able to pay Grootvlei miners who earned below the threshold a total of R2.03 million towards their unpaid wages. We also reported that we will continue to work towards securing unpaid wages for all other workers that were excluded from the first pay-out

5 3. PROGRESS IN GROOTVLEI CLAIMS FOR UNPAID WAGES The Department has since June 2011 received a total of 468 new claims from miners that were not included in the first claim. The value of these new claims amount to R1.73 million The claims were processed, verified and referred to DOL Legal section for inclusion in the pending legal process relating to the liquidation of Aurora.

6 3.1 PROGRESS IN GROOTVLEI CLAIMS FOR UNPAID WAGES Mineworkers who earned above the earnings threshold set in the BCEA could not be assisted with unpaid wages, but the Department worked with Solidarity and NUM to assist these workers. These claims are being dealt with as part of the liquidation process.

7 3.2 PROGRESS IN GROOTVLEI UNEMPLOYMENT INSURANCE FUND The Department together with the NUM and Solidarity negotiated with Aurora to obtain clarity on the employment status of these workers so that they could apply for UIF benefits. In October 2011 we managed to reach an agreement with all parties whereby it was declared that the mine is not operational and that workers were not receiving salaries, therefore they qualified to receive UIF benefits. This arrangement allowed to workers to still claim for retrenchment packages, unpaid leave and other benefits due to them

8 3.3 PROGRESS IN GROOTVLEI UNEMPLOYMENT INSURANCE FUND (cont.) The Department received and processed 936 claims from workers of the Aurora Grootvlei Mine Payment was made to all these workers beginning in November 2011.

9 3.4 PROGRESS IN GROOTVLEI UNEMPLOYMENT INSURANCE FUND (cont.) At the same time 1933 applications from foreign workers. Challenges being experience with these applications include: –Workers being untraceable because they have left for their home countries –Difficulty to obtain and verify information –Some of these miners were in the Country illegally and therefore did not have valid ID’s or work permits, and therefore could not be registered

10 4. PROGRESS IN ORKNEY In Orkney employees earning below and above the threshold were owed wages amounting to R8.65 million. During December 2010 Aurora paid out 25% of amount owed into the bank accounts of employees. The Department issued a Compliance Order to the amount of R 3.95 million on 15 February 2011 for employees earning below the threshold. On 29 June 2011 the Labour Court issued an Order in favour of the Department.

Progress with regard to UI payments - The DOL North West offices processed UIF application claims for affected Aurora Orkney workers 4.1 PROGRESS IN ORKNEY 11

12 5. PROGRESS ON LIQUIDATION OF AURORA The Aurora Mine has since been liquidated. The Liquidators are Kaapvaal Trust Pty (Ltd) 74 Siemert Road, Doornfontein, JHB P. O. Box 16185, Doornfontein

PROGRESS ON LIQUIDATION OF AURORA The Liquidators have been briefed about the wage claims. (Both the finalized and new claims) They have also been briefed about the status of UIF claims Liquidators have also been provided with the payrolls of all the workers from Aurora. Subsequently, the Liquidators informed the DoL that Aurora does not have assets which can be realized by way of sale to pay the amount owing to the employees.

PROGRESS ON LIQUIDATION OF AURORA DoL was advised to submit a claim on behalf of the employees to the Master of the High Court. This was done. A criminal case has been instituted by the Liquidators against the Directors of Aurora upon realizing that some monies of Aurora were paid fraudulently into bank accounts of Aurora Directors. The Liquidators also reported that several debtors were identified and owe Aurora around R 24 Million. However, there is no guarantee that this amount would be recovered in full.

DOL has since received correspondence from the liquidators indicating the following: Kaunda Global Mining Resources 2 Pty Ltd (Kaunda) and Aurora Empowerment Systems Pty Ltd (Aurora) must not be confused. The appointed provisional liquidators for Kaunda is CF De Wet and C Maredi. On a letter dated 15 August 2012, liquidators claim that: -The Master of The High Court has not convened. Therefore the first Meeting of creditors in Kaunda liquidators, could not prove The Department of Labour’s claim of R Currently there is other creditor’s claims of R that has also been lodged with liquidators. -Kaunda has currently got no assets under the liquidators control. -The Liquidators of Aurora is currently in legal proceedings against various debtors (9) totalling R A further 9 applications will be issued shortly PROGRESS ON LIQUIDATION OF AURORA

16 CONCLUSION The Department of Labour will continue to monitor progress in the Aurora liquidation process and do whatever it can to assist affected workers.

17 THANK YOU.