Loading...

James Lorimer: Optimum’s loss, Guptas gain. Private profiteering from SOEs.

Feb 16 2016 16:29

In this particular case one knows that where there’s smoke, there’s fire and in this case where there’s fire there’s now coal. And this is what’s at the heart of a South African story of corruption, government, the President’s son and an Indian family that’s gripped international headlines. At the heart of the problem is a coal supply agreement with Eskom. And the problem is the supplier has been swapped around to suit chosen benefactors. The companies that have lost out are Glencore and Exxaro, while the Gupta-owned Tegeta Resources sourced not one but two coal supply contracts. It’s also been revealed that Jacob Zuma’s son Duduzane is part of the Tegeta furnitue. It’s a cloak and dagger affair which further shows how deeply entrenched the corrupt factions are. And as the DA’s James Lorimer says, if it looks like a duck, walks like a duck and quacks like a duck, well… – Stuart Lowman

By James Lorimer* 

If it looks like a duck, walks like a duck and quacks like a duck, there needs to be a lot of contrary evidence to make us believe it is not a duck. So it is with the recent acquisitive activities of the Gupta-owned Tegeta Resources.

Tegeta has put in an offer for the Optimum coal mine, a mine which Glencore, one of the world’s most admired mining companies could not make viable. Along with this acquisition, Tegeta has just secured coal supply contracts for not just one but two Eskom power stations. It has resumed supplying the Hendrina power station from Optimum, which when it was owned by Glencore, was supplying Hendrina with coal that was allegedly sub-standard; so sub-standard that it provoked Eskom to issue Optimum with a R2.5 billion fine.

Global mining giant Glencore has its hands full after the ANC Government withdrew a mining licence because of the

On top of that, Eskom has ended a contract with an Exxaro owned colliery that was supplying Arnot power station, in favour of coal to be trucked in from Optimum. That looks like a duck.

Then it is revealed that the new Minister of Mineral Resources, Mosebenzi Zwane, who has a history of what one could politely call “facilitation” of Gupta family interests flies over to Switzerland with the Guptas to negotiate the Optimum sales deal. A Gupta factotum denies this happened, the Minister’s staff confirms it. The similarity to a walking duck is unmistakable.

Then it is revealed that another party to the Optimum purchase deal is one of President Zuma’s sons, Duduzane. There is a quacking noise.

South Africans can be forgiven for thinking that a Minister whose main purpose in the post is to deliver sweetheart mining deals to enrich the President’s family and his cronies has facilitated a deal which will work with the connivance of Eskom paying especially high prices for coal bought from Optimum. This is looking like duck soup.

The quacking became louder with a report that the R2.5 billion fine levied on Glencore would not have to be paid after all. That has unsurprisingly since been denied. That would have been a little too shameless for even the ANC patronage machine. One wonders if this fine will ever actually be paid. Expect delays and obfuscation and excuses for why the cash hasn’t yet been delivered.

This body of evidence of another deal that screws Eskom customers, that is almost all South Africans, may not be the full picture. But in order to convince the country that this is not, in fact, an amphibious avian, we need to be presented with facts that will show the full picture. That means details of this sale which include a proper report of all jobs lost at Optimum and Exxaro’s Arnot mines and most importantly the price paid to Tegeta for all the coal supplied to Eskom.

In the past calls for transparency have been batted away by Eskom with the portentous response of “commercial confidentiality”. But if Eskom is prepared to do deals like this it needs to be prepared to prove its innocence before the court of public opinion. If it can do so I will be first in line with congratulations. Until it does I remain convinced this is a pond-dwelling bird.

As such we will be demanding answers at the first available opportunity as to the nature of this deal.

*James Lorimer MP, DA Shadow Minister of Mineral Resources

* For more in-depth business news, visit biznews.com or simply sign up for the daily newsletter.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

NEXT ON FIN24X

 
 
 
 

Company Snapshot

BizNews Premium
Learn More
Loading...