Former Glencore CEO Clinton Ephron. Picture: Simphiwe Mbokazi/African News Agency (ANA) Archives
Former Glencore CEO Clinton Ephron. Picture: Simphiwe Mbokazi/African News Agency (ANA) Archives

Zondo commission: Former Glencore executive denies Ramaphosa influence

By Zintle Mahlati Time of article published Jun 11, 2021

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Johannesburg- A former Glencore executive has denied accusations that the mining giant was reliant on President Cyril Ramaphosa’s shareholding to leverage negotiations with Eskom over a coal supplier agreement (CSA).

Clinton Ephron on Thursday returned to the witness stand at the Zondo Commission.

He had previously testified at the inquiry in early 2019 regarding Glencore- and Gupta-related matters.

His testimony on Thursday focused on Glencore’s purchase of Optimum Coal Mine (OCM) and the mine’s ultimate placement under business rescue.

Glencore took acquisition of OCM in 2013 following its purchase, along with other interested parties, of Optimum Coal Holdings – which holds a 100% stake in OCM.

When Glencore took over OCM it sort to renegotiate a coal supply agreement with Eskom. At the time, a contract signed in 1993 was in place and was to expire in 2019.

Ephron explained that Glencore felt it could not keep up the maintenance of OCM and continue supplying coal to Eskom at a loss. The company sought to use a clause in the CSA to renegotiate a new cost price for the supply of coal to Eskom. OCM requested an R530 per ton price increase compared to the R150 per ton that was in place.

The matter did not go down well with Eskom executives at the time who insisted on paying the agreed price.

The commission has heard previously from former Eskom chief executive Brian Molefe that he believed Glencore had planned to use Ramaphosa as a shareholder at Glencore to help the company negotiate a deal with Eskom.

Ephron disputed this version of events and labelled them “preposterous”.

“I think that allegation is preposterous and I cannot understand how and why someone would think such a thing. The reasons why we did not do comprehensive due diligence is the following: this is not an uncommon way when acquiring a company,” Ephron said.

"There is no evidence in any way that Glencore wanted to rely on Mr Ramaphosa as our shareholder in order to change the contract price. It is ridiculous.

“The commission has interviewed a number of Eskom directors and executives and nowhere has it come up that Mr Ramaphosa had any discussion around the CSA of OCM," he said.

"I never asked Mr Ramaphosa to intervene in OCH or OCM in any matter relating to Eksom or the CSA and to the best of my knowledge he never did so. We strongly deny this allegation.“

Ramaphosa held shares in Glencore which he later dis-invested from when he went into government as deputy president.

Another allegation made by Molefe and former Eskom executive Matshela Koko was that Glencore had not done the proper due diligence on OCH when it purchased the business.

The two said if Glencore had done the proper homework, then it would have known the state of the company.

Ephron also disputed this, saying the company had done all the research needed, although not as comprehensive.

Glencore replied on publicly available information on OCH when it became listed on the Johannesburg Stock Exchange.

Ephron said it was not unusual for a company to approach individual stakeholders instead of making a public offering. That is the route Glencore took to help stabilise OCH’s share price, he explained.

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Political Bureau

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