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Glencore might buy back Gupta-linked Optimum

Mar 27 2018 22:00
Loni Prinsloo and Paul Burkhardt, Bloomberg

Johannesburg - Glencore is considering a bid for the Optimum coal operations which it sold in 2015 to a company part-owned by the politically connected Gupta family, according to two people familiar with the matter.

Optimum supplies fuel to Eskom and became a lightning rod issue for critics of the Gupta family members and their friendship with former president Jacob Zuma.

Glencore placed the mine in bankruptcy protection in 2015 after Eskom refused to renegotiate an unprofitable supply contract and issued penalties.

The asset then was sold to a company owned by the Guptas and Zuma’s son Duduzane, with support from then-Mineral Resources Minister Mosebenzi Zwane, who travelled to Switzerland to meet with Glencore CEO Ivan Glasenberg. The Guptas, Duduzane Zuma and Zwane all deny any wrongdoing.

Glencore is interested in reacquiring the mine and the government has indicated it wouldn’t oppose the deal, said one of the people, who asked not to be named because the information is not public.

Optimum, which is undergoing business-rescue proceedings, is among businesses linked to the Guptas that are struggling as banks refuse to work with them. 

READ: Optimum denies claims of 'Gupta stench'

A Glencore spokesperson declined to comment, citing company policy. Kurt Knoop, a business-rescue practitioner overseeing the Gupta-linked companies, as well as the Department of Mineral Resources didn’t immediately respond to requests for comment.

South African miners Exxaro Resources and Seriti Resources have each said they would consider buying some of the Gupta coal assets.

Optimum has received “expressions of interest” from parties after being placed under administration, business rescue practitioner Louis Klopper said at a meeting with creditors earlier this month.

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glencore  |  gupta brothers  |  mining
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