Registered users can save articles to their personal articles list. Login here or sign up here

Glencore is said to mull buying back Gupta-linked coal mine

Government is not opposing Glencore’s bid to reacquire embattled Optimum coal mine.

Glencore is considering a bid for the Optimum coal operations in South Africa, which it sold in 2015 to a company part-owned by the politically connected Gupta family, according to two people familiar with the matter.

Optimum supplies fuel to state power utility Eskom and became a lightning rod issue for critics of the Gupta family members and their friendship with former president Jacob Zuma.

Glencore placed the mine in bankruptcy protection in 2015 after Eskom refused to renegotiate an unprofitable supply contract and issued penalties. The asset then was sold to a company owned by the Guptas and Zuma’s son Duduzane, with support from then-Mineral Resources Minister Mosebenzi Zwane, who traveled to Switzerland to meet with Glencore Chief Executive Officer Ivan Glasenberg and was later criticized by the nation’s graft ombudsman. The Guptas, Zuma and Zwane all deny any wrongdoing.

Glencore is interested in reacquiring the mine and the government has indicated it wouldn’t oppose the deal, said one of the people, who asked not to be named because the information is not public. Optimum, which is undergoing business-rescue proceedings, the local equivalent of bankruptcy protection, is among businesses linked to the Guptas that are struggling as banks refuse to work with them.

A Glencore spokesman declined to comment, citing company policy. Kurt Knoop, a business-rescue practitioner overseeing the Gupta-linked companies, and spokespeople for the Department of Mineral Resources didn’t immediately respond to requests for comment.

Some workers at the Optimum mine have not been paid on time, according to the National Union of Mineworkers. Business rescuers “should sell the mine as soon as possible” to avoid employees having to face additional risk, Livhuwani Mammburu, a spokesman for the union, said by phone.

South African miners Exxaro Resources and Seriti Resources  have each said they would consider buying some of the Gupta coal assets. Optimum has received “expressions of interest” from parties after being placed under administration, business rescue practitioner Louis Klopper said at a meeting with creditors earlier this month.

© 2018 Bloomberg

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


To comment, you must be registered and logged in.


Don't have an account?
Sign up for FREE

Will they also return the oil they bought, sorry rotated, as part of that deal…

The money lenders don’t like new state capturers, especially when they have had such a hold over government for so long.

No one likes competition.

Great idea. Glencore could bypass the Gupta’s account and deposit the cash directly into the fiscus.

Load All 4 Comments
End of comments.





Follow us:

Search Articles:Advanced Search
Click a Company: