Johannesburg – The future sustainability of the Optimum Coal Mine (OCM) is very important for Tegeta Exploration & Resources, Nazeem Howa, CEO of Oakbay Investments, the holding company for the Gupta family’s businesses and that owns part of Tegeta, said on Tuesday.
"We are committed to the future sustainability of OCM and look forward to announcing our strategy for the business going forward,” said Howa.
On Monday the Competition Tribunal approved the R2.15bn takeover of Glencore Plc's OCM and six other target firms by Tegeta on the condition that there would be no merger-specific retrenchments.
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Tegeta is a black-owned operator owned by Mabengela Investments and Oakbay.
President Jacob Zuma’s son, Duduzane, who has various business ventures with the Gupta family, is a Tegeta shareholder through his Mabengela Investments. OCM is controlled by Optimum Coal Holdings (OCH). Both OCM and OCH are in business rescue.
The Competition Commission found that the proposed transaction is unlikely to substantially prevent or lessen competition in the thermal coal market.
The merging parties are small players in the market and face competition from larger rivals such as Anglo American, Exxaro Coal and South 32. Thus, there are credible alternative suppliers of thermal coal.
The Commission has recommended that the proposed transaction be approved on condition that the merging parties will not retrench any employees of the target firms as a result of the merger.
“We are delighted that the Competition Tribunal has ruled on the merger. Through this transaction we have prevented the loss of more than 3 000 jobs, by heading off an almost certain liquidation," said Howa.
Once the transaction is completed Tegeta will supply a maximum of 5% of Eskom’s total coal supply.
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