Guptas’ struggling mines lure buyers

Business entities and wealthy individuals have shown interest in purchasing the Mpumalanga and KwaZulu-Natal-based Gupta-owned mining assets.

This includes Optimum and Koornfontein mines and the Richards Bay coal terminal, which went through business rescue last February, according to Liquid Services associate director John Taylor. Liquid Services and Park Village Auctions are among the companies contracted to oversee the sale of the mining assets.

These assets were once used by the Gupta family to siphon billions from Eskom during the tenure of Brian Molefe as group chief executive. Despite offering sub-standard coal to Eskom at a huge cost to the state-owned enterprise (SOE) under Molefe’s watch, Gupta-owned Tegeta was paid billions.

“We have had a lot of interest in the coal assets, especially since the 2019 elections. “In terms of price, at this stage I cannot comment on what we want to achieve,” said Taylor, confirming June 18 as the closing date for the sale.

Experts believed there was still much value to be unlocked in these mining assets. The sales encompass all the mines’ assets along with the allocation of the Richards Bay Terminal. Optimum Coal Mine’s assets include an open-cast and underground sections; eight draglines, two processing plants, a railway siding, a rapid load-out facility and a waste reclamation plant that produces 15ML a day.

Mining operations are said to be viable beyond 2030. The Gupta-owned mines went into business rescue following a sudden disinvestment by the family when the state capture revelations emerged in 2015.

According to the findings of the Treasury investigation and report into the capture of Eskom by the Guptas:

• Eskom management prejudiced previous mine owner Glencore by refusing to sign the negotiated coal supply agreement, giving the advantage to Tegeta to acquire all the assets in Optimum Coal Holdings. This amounted to abuse of a position of authority, breach of trust, and violation of legal duty in terms of the Prevention and Combating of Criminal Activities Act.
• Eskom was prejudiced by the reduction of a R2.1 billion penalty imposed for supplying coal of allegedly poor quality. This also amounted to abuse of a position of authority, breach of trust, and violation of legal duty. The Commission of Inquiry into State Capture continues tomorrow, with former Transnet electrical engineer Francis Callard resuming testimony on what led to the capture of the SOE by Gupta-linked entities.

– brians@citizen.co.za

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