South African miner Arqomanzi does not expect a settlement to be reached between parties in the ongoing legal battle for control over the Lily and Barbrook mines, in Barberton, in Mpumalanga, anytime soon.

The mines have been in business rescue since 2016, after a collapse at the Lily mine resulted in the deaths of still unaccounted for mineworkers Yvonne Mnisi, Pretty Nkambule and Solomon Nyirenda.

Rescue attempts failed to locate the container with the bodies of the mineworkers, owing to unstable ground conditions and the risk to rescuers.

Mine owner Vantage Goldfields subsequently went into business rescue as capital from the Lily operations stopped. This also impacted on Vantage’s operation of its Barbrook mine, which also closed and entered into business rescue.

Arqomanzi, which is part-owned by diversified minerals operating and investment company SSC Group, was a bidder for both mines, having submitted business rescue proposals to reopen the mines about a year ago.

However, the implementation of business rescue plans for the Lily and Barbrook mines has been delayed owing to legal disputes over the appropriate way forward.

Arqomanzi director and CEO Neil Herrick tells Mining Weekly that it has, therefore, proposed a procedural settlement, where instead of the remaining issues and disputes being “dragged through the courts” over an extended period of time, a private expedited arbitration process be followed.

Should this proceed, the process could be wrapped up by the end of July, he says.

Vantage Goldfields CEO Mike McChesney, however, disagrees, telling Mining Weekly that “the terms proposed by Arqomanzi for arbitration were one sided, and so complex that there was no realistic possibility that the process could have wrapped up in July”.

He adds that, in all likelihood, “it would have gone on for many more months”.

In a pre-meeting, both the counsel for Vantage and the counsel for the business rescue practitioners (BRPs) had agreed that a procedural settlement was “the right way to go”.

Unfortunately, things were further delayed when, during a second meeting to finalise the terms and conditions for the proposed expedited arbitration process, the BRPs’ counsel advised that they were “not prepared to participate”.

“We’re not prepared to proceed with arbitration with Vantage alone, because at the end of the day, it’s the BRPs who must implement the business rescue plans,” Herrick says.

This latest move follows proceedings last month, where Vantage’s application to appeal the judgment handed down by Judge President Francis Legodi on May 31, was dismissed.

The judge had ruled that the behaviour and actions of the Lily and Barbrook mines’ BRPs towards the businesses under rescue and the affected parties, were unlawful and irresponsible.

Arqomanzi has indicated that it expects an application from Vantage to the Supreme Court of Appeal for leave to appeal the dismissal and, should this happen, Arqomanzi plans to oppose any such applications, says Herrick.

McChesney, meanwhile, has indicated that Vantage is awaiting the complete judgment, from which it will then determine “how best to proceed”.

Arqomanzi, meanwhile, has long held the view that the BRPs have a material conflict of interest that is prejudicial to the interests of the companies in business rescue and their respective creditors and affected persons.

“We believe this is so because the BRPs have been slavishly following instructions from Vantage’s management in respect of the unlawful Vantage proposal and the subsequent delaying of the business rescue process,” Herrick laments, stressing that “this is even to the extent that Vantage and the BRPs shared the same counsel and senior counsel in the matter which was the subject of Vantage’s appeal”.

This, Herrick notes, should indicate an “obvious” conflict of interest as it seems that Vantage is “pursuing its own commercial interests for its own benefit, whereas the BRPs ought to be pursuing objectives which are in the best interests of the companies in business rescue and their respective creditors”.

These two sets of interests can never be aligned, Herrick says.

McChesney, meanwhile, refutes the allegations.

“Arqomanzi has insinuated there is a conflict as Vantage agreed to pay the BRPs the fees to which they are rightly entitled for running the business rescue process for many years,” he says.

Arqomanzi has previously requested that the BRPs declare themselves to be “independent” from Vantage and says that, while they have not yet publicly done so, Arqomanzi is encouraged by the BRPs having been represented by their own counsel in the hearing on July 6.

Arqomanzi says Vantage does not have a plan in place to reopen the mines, which Herrick says is in contrast to Arqomanzi’s intentions to speedily complete the business rescue process, and that it has the funding and plans in place to reopen and develop the mines.

SSC Group CEO Fred Arendse substantiated Herrick’s claims on behalf of Arqomanzi and supported the company’s intentions to rebuild the Lily and Barbrook mines.

“We have absolutely no intention, desire, objective or agenda to keep these mines closed. We’ve got every motivation to open these mines, sink a new decline, open these mines and restore the dignity of thousands of people in the form of employment and get creditors to supply the mine,” he tells Mining Weekly.

Arqomanzi also intends to launch a rescue mission to recover the missing bodies of Mnisi, Nkambule and Nyirenda.

“Vantage does not want the amendments or any offers to be put to the vote of creditors, as required by law, because Vantage knows that it has lost the support of the creditors and former employees, and that Arqomanzi has significant voting interests in all of the companies in business rescue,” Herrick tells Mining Weekly, adding that this is believed to be the root of the alleged delaying tactics.

Overall, Herrick urges the BRPs to “simply do” what Legodi has ordered. Meetings of creditors to consider and adopt the plans, as amended, should be called, he adds.

McChesney, however, says “it has long been Arqomanzi’s attempts to force the implementation of its invalid plans, its lack of funding and its litigation, which has delayed the business rescue process for many years already and this continues to be their tactic”.

He reiterates previous comments, wherein he stated that Arqomanzi’s latest proposals “do not provide for the reopening of the Lily and Barbrook mines, nor the recovery of the bodies of the missing employees, and confirm further doubts that Arqomanzi has the funding to implement its proposals”.

Herrick has dismissed these allegations and says Arqomanzi’s funding can be largely attributed to a Hong Kong-based investor.

Mining Weekly has also reached out to the BRPs, who have not yet responded to email queries.