Pamodzi Gold's dark horizon has no silver lining
April 3, 2009
HOW Pamodzi Gold will get out of the hole it finds itself in remains a mystery. Its Orkney gold mine in North West is in provisional liquidation and its East Rand and Free State mines are in provisional judicial management.
As a result of the provisional liquidation, Pamodzi has lost control of the Orkney mine, which is on care and maintenance until April 14, when a hearing into a final liquidation will be held.
The bad news doesn't end there. The East Rand operation is flooded and the Free State mine, President Steyn, is shut because Pamodzi has not paid a R6 million water bill to the Sedibeng water authority.
Pamodzi's mining rights will lapse if the company and its subsidiaries are liquidated, according to court papers.
The same court papers show Pamodzi has held discussions with White Water Resources as a possible investor.
"One of the key problems influencing investors is the onerous hedge book which Pamodzi Gold has inherited, which has swallowed up large chunks of the proceeds of production for a loss," Pamodzi chief executive Peter Steenkamp wrote as part of the application for judicial management of the East Rand and Free State mines.
At the end of September it would have cost R473 million to close the hedge book.
The gold mining company owes its 15 000 employees and contractors millions of rands. It has also received an ultimatum from Eskom to pay more than R60 million in electricity bills if it wants to avoid power cuts at all four operations.
Pamodzi's other key creditors are the Industrial Development Corporation, which is owed R200 million; and German bank HVB, which is owed a hedge payment of $18 million (R171 million). Harmony Gold is owed R103 million and AngloGold Ashanti says it is owed more than R90 million.
With such a very long list of woes, it's all dark clouds and no silver lining in sight for Pamodzi.
British beef
It is great that Britain's celebrity chef, Jamie Oliver, takes such pride in his country's food tradition. "I'm very, very proud of my country and its food traditions", he told the media yesterday, ahead of his big catering function at 10 Downing Street for leaders of the Group of 20 (G20).
Oliver promised that the recession-weary G20 leaders were "in for a real treat". And what was that treat? Well, the G20 leaders, whose primary concern right now is how to prevent countries from lapsing into protectionism, would be served British food exclusively.
The butter would be made using organic cream from Somerset and smoked sea salt from Wales; as a starter there would be organic farmed salmon from Scotland; and the main course would be a shoulder of lamb from north Wales, with "foraged wild St George mushrooms" and mint sauce. For dessert there would be the famous British Bakewell Tart. The ingredients for the custard, as well as the eggs for the tart, would come from the Prince of Wales' Duchy of Cornwall farms.
Presumably the drinks list would include dandelion wine from the Cotswolds and cider beer from Somerset.
Never mind that there is probably a contravention of some daft EU regulation in the menu - what about the huge sensitivity right now, among world leaders, to anything that smacks of nationalism?
If the Brits are serving only food from the British Isles, can it be long before they drive only British cars or drink only wine made from the Cotswolds' weeds?
Such faux pas just keep happening to poor old Prime Minister Gordon Brown, who seems to have the best of intentions. While Brown was at the World Economic Forum in Davos earlier this year, calling for a united effort to combat protectionism, British workers were striking under the slogan "British jobs for British workers".
That little ditty was something Brown had come up with on an earlier interaction with his voting public.
Let's hope that at least some of the eight unemployed youngsters, trained by Oliver to assist at the function, come from Africa, China, Latin America or even Calais.
Icasa's club foot
There goes Icasa, putting its foot in it again. This time the regulator has decided to limit its satellite network licences to companies that are already operating, thereby restricting potential competition in the broadcasting market.
This was an excellent opportunity to issue licences for free-to-air services over satellite to new entrants at the same time, as stated last week. (e.tv is a free-to-air broadcaster, but on a terrestrial platform).
What this means is that Icasa will have to issue yet another invitation for companies wanting to apply for satellite free-to-air broadcasting licences at a later stage.
In addition, the limitation of the network to satellite is not in the spirit of promoting network neutrality for services, which would allow companies to provide services on any technology or network platform. This would introduce some flexibility, say, in the case of a company wanting to roll out a cable network for broadcasting services.
It is much more expensive to broadcast content via satellite than from a terrestrial platform. Customers will need a dish and probably a decoder, which immediately puts it out of the reach of the majority of South Africans.
However, there is a market for satellite services, with dozens of free-to-air satellite channels that can already be received across most of Africa.
The regulator does not seem to be promoting network-neutral licences in broadcasting, unlike in the telecoms sphere, where the likes of Vodacom and MTN are building fixed-line networks, while Telkom is moving into cellular space.
These companies can do this because they all have technology-neutral licences.
If Icasa had issued an invitation to new companies and not limited the licence to satellite services, the regulator would have helped to increase broadcasting services on any platform, thereby giving more choice to consumers. page 4
Edited by Nontyatyambo Petros. With contributions from Justin Brown, Ann Crotty and Thabiso Mochiko.
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