CAPE TOWN (Business Day) -- Simmer & Jack Mines (Simmers) is hoping to finalise an interim agreement with the liquidators of the DRDGOLD North West mining assets this week as a precursor to buying the mines and resuming operations.
Simmers was named as the preferred bidder for the marginal mines in May, but its bid was initially conditional on reaching an agreement with labour, arranging financing and finding a solution to the issue of sharing costs of pumping water from disused mines in the Klerksdorp, Orkney, Stilfontein and Hartebeestfontein basin. The offer also requires regulatory approval.
Last week Simmers said it had dropped its precondition on the pumping of water because court action could delay a resolution of the issue and there was an urgent need to preserve jobs at the mine.
A company spokesperson said yesterday that arrangements for financing were on track.
On Friday Simmers said it had reached an agreement with the National Union of Mineworkers for its members to accept new restructured conditions of employment.
The three other unions affected - Solidarity, the South African Equity Workers' Association and United Association of SA - agreed to the terms two weeks ago.
Under the agreements the mines will employ about 3 800 workers under nondiscriminatory conditions, where the same remuneration structure will apply across the board and all employees will be entitled to the same proportional benefits, which will help to reduce costs.
The signing of the agreement occurred just before water, electricity and catering services at the miners' hostels were to be cut off.
Simmers chief operating officer Deon van der Mescht said that with the support of organised labour, he was confident the liquidated mines could become sustainable assets.
The new interim agreement that Simmers is negotiating with the liquidator would see Simmers resume mining operations for its own account, and the holding costs would be deducted from the purchase price.
The life of the mines could be extended for another 10 years.
Simmers has offered R45m for the liquidated North West operations, which include Buffelsfontein and Hartebeestfontein. Both were losing money when hit by an earthquake in March. They reported losses of more than R270m in the six months to December.
The water affairs and forestry department has ordered the four mining groups that operate in the area to share the pumping costs, which amount to about R1,6m a month. Simmers shares were trading 4% lower at 48c yesterday.
