Arrests revive Aurora spectre

The scandal brewing at troubled Blyvooruitzicht mine deepened on Friday with the arrest of the mine manager after 1.3kg of gold was found at his house near Carletonville.

Blyvooruitzicht is one of the oldest gold mines on the West Rand. Like many mines on the Reef, it fell on hard times when reserves ran out.

It went into liquidation last year, but problems arose when the liquidator, Leigh Roering, accepted a R70-million bid from Goldrich, a company run by the controversial directors of the failed Aurora mining company.

Miners told of their fears that Blyvooruitzicht would be subject to an Aurora-style stripping exercise with mine equipment sold off and workers sacked. Those fears were probably stoked further by Friday's arrest of Ettieen Erasmus in connection with charges of theft, illegal possession of gold nuggets, fraud and defeating the ends of justice.

Hawks spokesman Captain Paul Ramaloko said on Friday that Erasmus went by the name of Morne Nortje. He had been arrested, and his laptop, cellphones and documents were seized, said Ramaloko.

The 1.3kg of gold is understood to have been 80% pure, and could have fetched R500,000 at current market prices.

Sarel Barkhuizen, the manager at Blyvooruitzicht's smelter plant, was also arrested.

Sources close to the investigation said they suspected Erasmus sold mine equipment and scrap metal on behalf of somebody else - possibly the new owners, Goldrich, which is run by former Aurora director Thulani Ngubane and his adviser, Faizel Bhana.

Ramaloko said Erasmus and Barkhuizen would appear in court tomorrow. Erasmus could not be reached by the time of going to print.

Barkhuizen's contact details could not be established.

However, Ngubane and Bhana were adamant that no gold had left Blyvooruitzicht on their instruction at any time since Goldrich took control of the mine, describing the claims as "ludicrous".

"We categorically deny any such allegations, and repudiate same with the contempt it deserves," they said.

The Aurora case is one of the biggest mining scandals in recent years.

In 2009, Aurora bought old Pamodzi mines Grootvlei and Orkney, promising to revive mining.

However, both mines were left bare while promises to pay liquidators and workers were never honoured.

Pamodzi's liquidators are still trying to recover more than R120-million in lost gold sales and more than R1.5-billion in damage to assets.

The influential Bhana family is facing lawsuits and claims for the millions it received from Aurora directors while the mines were basically insolvent.

The wealthy family was previously also involved in the liquidated Velvet Sky. In 2002, the family was ordered to pay huge fines relating to insider trading at oil products company Amlac.

Investigators working for rival mining groups said they suspected tactics similar to Aurora's were being applied at Blyvooruitzicht, and that Erasmus was taking the fall for others.

Goldrich was meant to pay the liquidators R70-million in instalments for Blyvoor, but last week missed the payment deadline for the latest R13-million payment as well as R2.4-million it was meant to pay workers.

Richard Xati, who represents the National Union of Mineworkers at the mine, said that despite big promises workers had not been paid.

"When we phone the liquidator, no one answers or returns our calls. We don't know what is going on," he said.

"Workers have been without money for six months now ... they cannot survive."

Goldrich's Ngubane claimed, however, that miners had been paid their salaries for February in full.

While the discovery of gold at the mine manager's house raises new questions, the police organised crime unit is investigating another case of gold theft.

That case involves a break-in at the mine in January when 380kg of gold-bearing material was stolen.

The ore was found the next day on a farm at De Deur, about 80km away. At the farm, police found old-time gold-processing equipment, including old-fashioned gold-sorting machinery They also confiscated a handgun and R40000 in cash.

Five suspects were arrested. It is understood that the suspects and the farm owner were investigated in 2003 for illegal gold mining.

Private investigators who are understood to be assisting the police, believe there is a strong link to the current case against Erasmus.

Most gold mined in South Africa is processed at Rand Refinery, but that company has strict rules obliging it to ascertain the identity of the people who bring it ore.

After processing, however, it is almost impossible to distinguish between gold that was obtained legally and gold that was mined illegally.

Rand Refinery CEO Howard Craig said that the last time it received material from Blyvooruitzicht mine was on August 16 , when the mine went into liquidation.