Community revolts against interference in sale of Optimum

The march is being coordinated by the Mpumalanga Action Movement (MAM) and is currently being monitored by law enforcement, as picketers take to the N11 (Hendrina).

One of Mpumalanga Action Movement’s coordinators, Bongi Mahlangu, told www.mobserver.co.za that the peaceful march will be taking place on both sides of the N11.

Two groups have embarked on a march from the N4 offramp to Optimum and from Hendrina to Optimum. The group from Hendrina first gathered at the Municipality to hand over a memorandum.

According to a press release issued by the Mpumalanga Action Movement, the group comprises of 3 000 former mine employees who have all lost their livelihoods in the liquidation of the mine.

MAM’s secretary general, Clifford Masinga, summarised that the community wants to see Optimum Coal Mine up and running again and the livelihoods of employees restored. The press release dictates the following:

They state that the march is a protest action by the communities of Hendrina, Middelburg and eMalahleni against the interference of the National Prosecuting Authority (NPA) regarding the eminent sale of the Optimum Coal Mine (OCM).

“These communities are directly affected by the closure of OCM that has led to untold suffering and hardships as 3 000 people lost their jobs and even more families had their livelihoods destroyed whilst businesses lost opportunities.”

The gathering will be addressed by community leaders who have been leading efforts to get OCM back into operation and therefore create economic and employment opportunities for the people who mainly dependent on this mine for survival.

Background as stated in the press release:

“Optimum Coal Mine (OCM) was purchased by Tegeta Exploration and Resources (Gupta owned) – from Glencore, in 2016. The Public Protector report that was released in 2016 made allegations as to how Tegeta had funded the acquisition price.

The money was ultimately paid to Werksmans Attorneys Trust account for the benefit of Glencore and/or the Loan Consortium. Assuming that these funds were the proceeds of crime, Glencore, Werksmans and the Loan Consortium received the benefit of these funds and should have long been made to account by the law enforcement agencies generally and the prosecuting authority (NPA) particularly.

Despite the publicly known accusations, the NPA is either unwilling or has no appetite to bring charges or preservation proceedings against Tegeta, Glencore, Werksman or the Loan Consortium during the period post Tegeta’s acquisition from Glencore.

Given the tough economic conditions at the time, OCM entered business rescue in February 2018. The NPA took no action or showed no interest at that point.

Initial post commencement finance was secured in an attempt to protect employment and keep the mine operational whilst in business rescue. Even at that stage the NPA took no action or did not show any interest at that point.

The mine was placed into care and maintenance in late 2018, with a devastating negative impact on the employees and the surrounding community. Still the NPA took no action or showed no interest. Various bid processes were completed by the Business Rescue Practitioners (BRPs) with such being common knowledge and advertised internationally.

Ultimately various business rescue plans were published and not supported by the creditors. Still the NPA neither took action nor showed any interest.

Ultimately and after the local community and ex-employees had suffered hardship for over two and half years, a business rescue plan was approved by 88% of OCMs creditors in September 2020.

Still the NPA took no action and did not show any interest.

The approved plan proposed that Liberty Coal would take over the assets and business of OCM. This acquisition would bring the mine back into sustainable production. The community understands that the costs to undertake this venture are over R1.2 billion.

In the interim, the Business Rescue Practitioners of OCM entered various contract mining agreements to allow third parties to mine at OCM on a royalty basis. Over 800 jobs have been created already. An additional 1 500 jobs will be created directly and indirectly when the mine is under Liberty Coal’s ownership and operational.

The positive impact on the local community and the South African fiscus from the taxes and royalties cannot be overlooked.

The community finds it objectionable and insensitive the NPA’s legal proceedings that will cause the business rescue plan to fail.

Instead of targeting the monies, which were paid to Glencore and the Loan Consortium, which were allegedly the proceeds of crime, the NPA instead seeks to take over OCM, with a view of selling OCM if it is successful.

This is almost six years after Tegeta purchased OCM from Glencore.

If the NPA is successful and the business rescue plan fails, OCM will not be recapitalised, jobs will not be created and OCM will likely be liquidated.

The return to the NPA in a liquidation scenario would be zero whilst the impact to community will be extremely devastating especially given the tough economic situation that has seen rising unemployment and crime levels in our country.

The NPA is not acting in the interest of the poor communities but seems to be doing the bidding for the rich and powerful if the reports of their officials visiting communities to dissuade them from supporting the proposed purchase plan is anything to go by.

We call upon the NPA to abandon its wrecking ball tactics as this has an effect of further plunging communities deeper into poverty and joblessness with the concomitant rising criminality.

Instead, the NPA must and should pursue those who seemingly benefited from the proceeds of crime like Werksman and Glencore to recover those monies.

As the community, we support the plan to bring back OCM into operation as this will create much-needed economic and employment opportunities for our communities,” the press release concluded.