Glencore lashes out at Eskom over coal claims | Fin24
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Glencore lashes out at Eskom over coal claims

Nov 06 2016 09:50
Jeanette Chabalala, News24

Johannesburg – Glencore has rejected allegations by Eskom CEO Brian Molefe that it sold the parastatal coal at exorbitant prices.

Molefe accused Glencore of previously trying to sell coal to Eskom at a rate of R570 per tonne, when he said the price should have been below R200.

However, Glencore said the Optimun Coal Mine (OCM) engaged in good faith negotiations with Eskom over a period of more than two years.

“OCM made a number of proposals to Eskom including increasing the purchase price for the coal for the remainder of the agreement and an extension for amongst other things, a withdrawal of OCM’s hardship claim under the agreement and an extension of the agreement after 2018."

Glencore said at no stage did OCM raise the topic of load shedding in its discussions with Eskom.

It said the last offer made by OCM while it was under Glencore’s control was R300 per tonne until 2018, "not R530 per tonne".

“Eskom rejected this offer and terminated negotiations with OCM. Eskom, thereafter lodged its approximately R2 billion penalty claim against OCM. As a consequence of the claim by Eskom, the directors of OCM resolved to place OCM under business rescue at which point OCM was still supplying coal to Eskom.

“Glencore agreed to provide post-commencement funding to OCM to allow it to continue operating and supplying Eskom while under business rescue.”

Molefe said that subsequent to the sale of the mine, Eskom has been paying the cheaper rate.

He further added that had he accepted Glencore’s price, former public protector Thuli Madonsela would have scrutinised the deal and labelled it corrupt.

Molefe hinted that his current troubles with the public protector’s report could stem from his refusal to accept Glencore’s price for coal.

“Having said that, I’ve had time to apply my mind to this matter [of the state capture report]. I think it’s all because we refused to give Glencore R570,” he said.

“What pains me the most is that I never had the opportunity to explain to Thuli Madonsela what I have explained now,” he added.

READ: Eskom 'states facts' in state capture report - AS IT HAPPENED

The board of Eskom and Molefe came under the spotlight in the report over a coal deal with Tegeta Resources & Energy, a company owned by wealthy industrialists the Guptas.

According to the Public Protector report into state capture, Molefe's cellphone location information places him near the Gupta home, and 58 calls were apparently made between himself and Ajay Gupta, the eldest of the three Gupta brothers.

The report, which was released on Wednesday, also nailed Eskom over a prepayment of almost R1bn to Tegeta for a coal tender to supply Arnot Power Station.

READ: Tearful Molefe slams public protector’s Saxonwold cellphone evidence

The money was allegedly used to buy Optimum Coal Mine (OCM) from Glencore and may be corrupt, illegal and amount to fruitless and wasteful expenditure, the report found.

Madonsela said Glencore appeared to have been severely prejudiced by Eskom's actions in refusing to sign a new agreement with them for the supply of coal to Hendrina Power Station.

READ: #StateCaptureReport: Madonsela nails Eskom over Gupta coal tender

Read Fin24's top stories trending on Twitter:

glencore  |  tegeta  |  eskom  |  brian molefe  |  coal


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