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The Congress of South African Trade Unions is appalled at the shut-down of Grootvlei mine on the East Rand, and the ‘temporary lay-off' of 1440 workers - 60% of the workforce - after months in which they have not been paid their wages.

The company has also made no payments to the mine's security and insurance companies; suppliers also claim they are not being paid and are therefore not delivering equipment and supplies to the mine, and things came to a head when Eskom cut off power because they had not been paid, forcing mining to stop.

COSATU fully supports the workers who have taken strike action in defence of their jobs.

The federation is also alarmed at the allegation that thousands of workers' pension contributions have been deducted from wages but not paid over for the past five months. As a result the Mineworkers' Pension Fund has reported the company to the Financial Services Board and the National Prosecuting Authority.

The owner is Aurora Empowerment Systems, a BEE company which bought the mine from the liquidated Pamodzi company eight months ago. It is a tragic example of how ‘empowerment' can lead to the absolute opposite - mass retrenchments and the loss of a potentially profitable and job-creating enterprise.

The Mail&Guardian claims that R81-million worth of gold has been extracted from the mine since Aurora took over, but the money has gone neither to the workers, who have not been paid, nor back into investment into the mine.

The M&G claims to have information that money has been diverted into a secret bank account, and there are reports that equipment is being removed from both Grootvlei and another Aurora mine in Orkney, though Aurora denies these allegations of asset stripping and claims that the mine is simply not making a profit at this stage.

One of the Pamodzi liquidators, Enver Motala, told the M&G: "Aurora's BEE credentials were impressive indeed -- the directors included Nelson Mandela's grandson ... and President Zuma's nephew." "Its bid pledged not to retrench permanent employees and to rehire laid-off workers on new packages. A share-incentive scheme would be created, as they believe in empowerment in the true sense of the word".

It also talked of bold plans to create an Aurora Gold East Rand Community Trust "with the sole purpose of uplifting the community", which would fund "housing development and bursaries for dependants of staff members."

But now Motala says that Aurora has failed to give the liquidators financial information and detailed reports to the liquidators of all expenses incurred and revenues received in respect of the mining operations. Workers have been plunged into poverty.

The collapse of this company will add strength to COSATU's long-standing call for the nationalisation of the mining industry. The sector plays such a critical role in the country's economy and provides employment to such a large workforce that it should not be at the mercy of companies using mines as a route to quick profits at the expense of the workers.

It also reinforces the federation's view that the existing form of BEE benefits only a tiny handful of the previously disadvantaged, while leaving the vast majority either unemployed or struggling to keep a precarious job and earn enough to feed their families.

The first priority for an empowerment strategy should be saving and creating jobs. Then ways must be found to share the profits made from the workers' labour amongst the workers themselves and their communities and not just a few upper-rich and politically well-connected individuals.