Johannesburg - The DA has called for the Minister of Mineral Resources, Mosebenzi Zwane, to explain how Tegeta Exploration and Resources, a company that is linked to the Gupta family, was named the preferred bidder for Glencore’s Optimum Mine following public outrage over the controversial R2.15 billion deal.
DA spokesman for mineral resources James Lorimer yesterday denounced the deal and said it was not above board.
Read: Gupta deal is 'usual'
“The entire deal seems tainted with corruption and Minister Zwane is too close to it to avoid this taint. Minister Zwane needs to tell South Africa whether he negotiated Tegeta’s let-off from the fine while in Switzerland,” Lorimer said. “If he says he did not do so, then he needs to tell us exactly what he did negotiate and the extent of his involvement in this job-culling deal.”
Tegeta, a company formed in 2006 to operate Oakbay Resources, was named the preferred bidder after agreeing to pay R2.15 billion for the Optimum mine in November. The mine supplies coal to Eskom’s Hendrina power station in Mpumalanga and provides 500 permanent jobs.
Glencore pulled out of the mine following financial difficulties after being slapped with a R2.5bn fine by Eskom over poor quality coal.
“The suite of deals has seen the Guptas grabbing coal deals from Eskom worth billions and has potentially put hundreds of jobs at risk,” Lorimer said.
“The evidence currently suggests that Zwane and Eskom contrived to make Optimum unviable for Glencore to operate. Once Glencore was forced to sell the mine to the Guptas, it was then arranged that the path for Tegeta would be eased to get supply contracts with Eskom and get let-off a considerable fine.”
Tegeta Resources was among seven companies that were awarded with a contract to supply coal to Eskom’s Arnot power station in Mpumalanga after a 40-year contract with Exxaro expired.
The National Union of Mineworkers (NUM) said it was extremely worried that thousands of its members and other employees at Exxaro Arnot Coal Mine in Mpumalanga were facing possible job losses after Eskom did not renew the contract with Exxaro Arnot Mine that ended at the end of December.
“We want to put it categorically clear as the NUM that we are not defending or speaking on behalf of the individual mining companies affected, but we are defending thousands of our members who are going to be retrenched because of Eskom’s decision not to renew the contracts,” NUM spokesman Livhuwani Mammburu said.
The business rescue practitioners, Piers Marsden and Peter van den Steen, rejected reports that Endulwini Mining, an empowerment consortium, had made a firm offer to purchase the Optimum mine for R3.17bn on August 5, but lost the bid.
“Endulwini’s chairman, Sipho Dube, made an indicative offer in August 2015, but the offer was for R1.5 billion and not $200 million (R3.2bn).
“Moreover, the offer was not firm or binding. It was conditional on funding and due diligence,” the two said through their spokeswoman Louise Brugman. The offer did not include any commitments regarding an “equity share scheme”.
Brugman said the business rescue practitioners reiterated that their duty was to develop a business rescue plan that offered value for all affected persons and was reasonably capable of implementation.
“The business rescue practitioners considered all viable and credible options available to them and concluded that the offer from Tegeta provides the most compelling value for all stakeholders.
“The Tegeta offer will be included in a business rescue plan that will need to be approved by creditors of Optimum Coal Holdings in accordance with the Companies Act,” she said.
Asked what made the Tegeta deal attractive and its commitments to communities and black empowerment, she referred Business Report to Tegeta. “If you want to know the details of the Tegeta deal, speak to Tegeta itself,” Brugman said, adding that business rescue practitioners would not make details of competitive bidders public.
“Once there is a preferred bidder, all other options and plans to rescue the company are not made public. All considerations that have fallen off the table are not mentioned.”
BUSINESS REPORT