Government-owned entity in bid to acquire Optimum Coal assets

By Dineo Faku Time of article published Jan 18, 2019

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JOHANNESBURG – Government-owned coal company African Exploration Mining and Finance Corporation (AEMFC) entered the bidding process for Optimum Coal assets, it said yesterday.

AEMFC chief executive Sizwe Madondo said yesterday that the bid was central to the country’s energy security and would also ensure that the assets were awarded transparently. “We believe there exists, through this consortium and within our bid for Optimum Coal and its associated assets, a significant potential to demonstrate the value inherent in a workable and sustainable South African public-private partnership,” said Madondo.

Optimum Coal comprising the Optimum Coal Mine, Koorn- fontein Mines and Optimum Coal Terminal was previously operated by Gupta-owned Tegeta Exploration and Resources and produced around 10 million tons of coal a year – half of which was supplied to Eskom. AEMFC said it had funding and operational expertise to create a commercially viable business that optimised the asset for South Africa's benefit.

“We view this transaction as of national significance, and through a team of reputable and experienced sector experts who invest in rigorous due diligence processes, together we can build South Africa’s image, while instilling confidence within the local and global investor community that South Africa is open for business on commercially sound terms that benefit all South Africans,” said Madondo.

Optimum filed for business rescue after its perilous financial state was exacerbated by the closure of the Gupta bank accounts. 

Louis Klopper, one of the business rescue practitioner, said yesterday that the business rescue practitioners had not received the bid from AEMFC. “We know nothing about the bid by the state-owned company,” he said, adding that the business rescue practitioners were scheduled to meet creditors next month.

“We want the business rescue processes to be finalised as soon as possible. It is up to the creditors and not the business rescue practitioners to vote on the winning bid,” he said.

Commodities traders Vitol Group, Project Halo and the Phakamisa Consortium have previously submitted bids for the Optimum assets. Project Halo’s offer was the only offer that had financial backing at the time of making the offers.  

The business rescue practitioners said earlier this month that they had provisionally accepted the R3 billion offer by Project Halo, subject to the approval of creditors.

More than 2 000 Optimum Coal employees have not received their salaries for the past three months and marched to the Union Buildings this week to request government officials to step in.

Tshilidzi Mathavha, Highveld regional secretary of the National Union of Mineworkers, said the union had been calling for the government to take full ownership of the company.


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