Gupta company: No help from minister with mining deal | Fin24
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Gupta company: No help from minister with mining deal

Feb 14 2016 14:24
Franz Wild and Paul Burkhardt

Johannesburg - Tegeta Exploration & Resources, the South African company owned by the politically connected Gupta family and a venture fund in which President Jacob Zuma’s son is an investor, said it’s seeking further opportunities after being cleared by regulators to acquire Glencore Plc’s Optimum coal complex.

“Tegeta is an ambitious business and on the lookout for new opportunities to grow the business,” according to an e-mailed response this weekend to questions from Oakbay Investments, the Gupta family company that owns part of Tegeta.

“It is our view that any person, or company, should be free to compete fairly for any business.”

South Africa’s Competition Commission on Thursday recommended that the Competition Tribunal approve Tegeta’s R2.15bn acquisition of Optimum on the condition that jobs be retained. The regulator also disclosed that Zuma’s son, Duduzane, who has at least a dozen business ventures with the Gupta family, was a Tegeta shareholder through his Mabengela Investments.

Opposition parties and commentators criticised Mines Minister Mosebenzi Zwane for meeting with Glencore CEO Ivan Glasenberg to advance a deal, which they said benefited the president’s son and the Gupta family, who are personal friends of Zuma. Zwane denies favouring Tegeta and said he is only trying to preserve jobs. They are also selling coal to Eskom.

“We can categorically state we have received no assistance from the minister in the closure of this deal,” Oakbay said. “Eskom is the major purchaser of coal, so it would unreasonable for anyone operating in that space not to trade with them. Currently, we are a very small supplier to Eskom, around 1.3% of their requirements. This agreement is on terms and conditions which are no different to those of any other company.”

Glencore sold Optimum after Eskom refused to amend a loss- making coal supply contract. The power utility has said Tegeta will be subject to the same contract, which runs until the end of 2018. After the sale was agreed, Optimum started selling some coal to the Arnot power plant at higher prices on a short-term basis, as Eskom seeks a long-term supplier for the operation.

“We had a one-month contract in January, supplying less than 15%,” Oakbay said. “Optimum has not applied for Arnot’s long-term supply agreement.”

Tegeta bought Optimum “with a long-term view to building a successful business,” Oakbay said. “We would like to state our commitment to the future sustainability of the business.”

oakbay  |  mining  |  coal  |  gupta family


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