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Bankrupt Gupta mine sold to black-owned group

Oct 21 2019 12:01

A black-owned South African mining group, Lurco, is buying the Gupta family's Koorfontein mine, Netwerk24 reported on Monday morning.

The bankrupt mine in Mpumalanga is owned by the Guptas’ Tegeta Exploration and Resources, a unit of Oakbay Investments. It used to supply coal to Eskom, but has not been operational for some time. Employees last received salaries in November 2018

Lurco was established in 2010 by businessmen Ellington Nxumalo and Aubrey Chauke. One of its largest projects is a coal beneficiation contract with Australian miner South32.

Lurco has until later this week to settle the R500m bid. Louis Klopper, the business rescue practitioner tasked with dealing with some of the Gupta companies, told Netwerk24 that a foreign-owned financier, who is supporting Lurco’s bid, has transferred a part of the money last week. The rest needs to be settled by 24 October.

If that doesn't happen, another company, Black Royalty Minerals (BRM), will buy Koornfontein. It already has the funds available, but Koornfontein's creditors voted for Lurco because its bid was higher.

Klopper said that the business rescue plan for Optimum, another Gupta-owned mine, will be published before the end of the month, whereafter creditors will get to vote on it. He told Netwerk24 that they expect resistance from Oakbay, and won't be surprised if the company applied for an interdict against the plan.

In August, the Pretoria High Court dismissed an application by Oakbay to remove the business rescue practitioners of Tegeta.

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