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New buyer of Gupta mine after finance flop

Oct 30 2019 10:18

Black Royalty Minerals (BRM) says it is the new preferred bidder for the Gupta-owned Koornfontein coal mine.

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

Netwerk24 reported last week that black-owned South African mining group Lurco would be buying the Gupta family's Koorfontein mine.

Lurco had until late last week to settle the R500m bid. Louis Klopper, the business rescue practitioner tasked with dealing with some of the Gupta companies, told Netwerk24  that if it couldn’t deposit the money in time, BRM would buy Koornfontein.

Koornfontein's creditors voted for Lurco because its bid was higher.

BRM confirmed on Tuesday that its bid includes “a multiple funding approach, comprising of offtake agreements, internal funding and facilities by Standard Bank". It is required to fulfil certain conditions by Friday.

BRM owns the Chilwavhusiku Colliery in Bronkhorstspruit and is in the Makole Group, which is involved in various property development projects.

Makole Group’s CEO Ndavhe Mareda said in a statement he believes BRM's coal mining expertise contributed to its successful bid.

Koornfontein contains an open pit strip mine, two underground areas (Gloria and Blinkpan), a processing plant capable of processing 3.5m tonnes per year and a railway siding with rapid loading. Operations can extend well beyond 2040, said Mareda. Koornfontein’s Richards Bay port allocation has export entitlement of 1.5m metric tonnes per year.

Mareda anticipates that operations at the Koornfontein mine will restart in the first three months of 2020.

Klopper said that the business rescue plan for Optimum, another Gupta-owned mine, will be published before the end of the month, after which creditors will vote on it. He told Netwerk24 that they expect resistance from Oakbay, and wouldn'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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