Share

Glencore lashes out at Eskom over coal claims

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:

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.96
-0.1%
Rand - Pound
23.92
-0.1%
Rand - Euro
20.43
+0.0%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.1%
Platinum
908.05
+1.2%
Palladium
1,014.94
+1.3%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders