WATCH: Big support for black-owned Lurco R500m bid to take over Gupta mine

By Dineo Faku Time of article published Oct 22, 2019

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JOHANNESBURG – Black-owned diversified commodities business group Lurco has made a R500 million bid for Koornfontein Mine, one of the entities linked to the controversial Gupta family.

Group chief executive Ellington Nxumalo on Monday told Business Report that Lurco had received overwhelming support from creditors to take over the mine.

Nxumalo said Lurco hoped to resume production at the Mpumalanga-based mine within six months.


Video by: Chelsea Lotz, Business Report TV

He said the company had long-term supply contracts with Eskom and international off-takers that it planned to see through.

“Lurco has been looking at the Koornfontein asset for just under two years and has employed credible and reputable partners to assist with a robust due diligence of the mine in order to bring it up to full production. 

"We are extremely delighted by the outcome of the bidding process and the overwhelming support received for our bid offer,” said Nxumalo.

Koornfontein, one of Eskom's main coal suppliers before going belly-up last year, is in business rescue.

Creditors have given the company until Friday to settle the price tag for the mine. Nxumalo said the company would comply with the business rescue practitioners.

“It is a challenging deadline that was imposed at a late stage in the process. 

"However, the consortium and its funders will do everything we are legally able to, to ensure the funds reach South Africa within the stipulated time frames,” he said.

The two other bidders for the mine were Orchid Mining and Black Royalty Minerals.

Nxumalo said Lurco provided a solid offer that catered for ensuring the continued supply of energy to the country as well as job security for the workers. 

“Our plan anticipates that the mine will be producing within six months of commencement of operations,” he said.

Last February, Tegeta Resources, a subsidiary of Oakbay Resources and Exploration, voluntarily filed for business rescue after the country's leading banks closed down their accounts.

National Union of Mineworkers Highveld regional secretary Tshilidzi Mathavha said union members last received their wages in November last year. He said that he hoped that members would finally get what was due to them. “We have been disappointed too many times by the process. Our hopes were previously raised only to be disappointed at the last minute,” said Mathavha.

“Lurco has committed to give workers at least their full salaries and voluntary severance packages, at least they have money to pay us,” said Mathavha.

Louis Klopper, one of the business rescue practitioners for the Gupta companies, said he was grateful for the pending sale. “It has been a long road, because of the interference and court cases,” he said.

Klopper said that the Tegeta-owned Optimum Coal Mine’s business plan would be published in the next two weeks.

Koornfontein is a shareholder within the Richards Bay Coal Terminal, with a 1.5-million-ton annual coal export entitlement.

It also has three processing plants, two railway sidings, and a rapid load-out facility. 


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