The events surrounding the Guptas’ coal mines have an uncanny ring of deja vu, reminiscent of the Aurora saga involving Khulubuse Zuma and Zondwa Mandela.
Zuma and Mandela used their powerful connections to muscle their way through the door to take control of Pamodzi Gold’s mining assets, Orkney and Grootvlei, in 2009.
The two men promised the authorities that they would revive the mines’ fortunes.
The rub was that Zuma and Mandela, much like the Guptas in Tegeta Exploration and Resources’s acquisition of Optimum, did not fork out a cent to lay their hands on the Pamodzi mines.
The other similarity is that the Pamodzi mines were in liquidation when Zuma and Mandela swooped in. Optimum Holdings was in business rescue when the Guptas’ Tegeta came knocking.
The more than 5,000 employees who worked on Pamodzi mines rue the day that Zuma and Mandela gained control of the business.
Despite court after court finding against Zuma and Mandela, their former workers remain destitute while the two are yet to pay a cent for the plunder of the mining assets.
In 2016, the Supreme Court of Appeal dismissed an application by Zuma, Mandela and three other Aurora directors to appeal against a R1.5bn award handed down against them by the High Court in Pretoria.
The court’s rejection of the application was hailed at the time, with expectations high that Zuma and Mandela’s victims would finally see justice. But after almost two years their victims, who have tasted many court victories, are yet to taste the material fruits of justice.
Technically, the Aurora mess remains unresolved and the legal wrangling looks set to drag on for years as Zuma and others try to dodge liability.
On February 22 2016, the Competition Tribunal conditionally approved Tegeta’s acquisition of a suite of Glencore’s mining assets, including Optimum Coal Terminal, which had been placed under business rescue.
Glencore placed its Optimum Holdings under business rescue after Brian Molefe, acting Eskom CE at the time, fined the company R2bn for supplying subpar coal in late 2015. In the same year, then mineral resources minister Ngoako Ramatlhodi ordered Glencore to suspend operations at Optimum mines because the company had done a poor job with its social and labour plans and showed no sensitivity to workers when it retrenched more than 300 employees. The nail in the coffin was the R2bn fine, which set the ball in motion for the Guptas and Duduzane Zuma to bid for the assets.
The Competition Tribunal’s conditional approval statement makes for grim reading about the state of the target assets — the Optimum businesses were on their knees.
But Nazeem Howa, who was CE of Tegeta holding company Oakbay, believed that "by changing mining techniques and increasing supply so that some coal can be exported at higher prices, the mines can become profitable". How did Howa spin this fiction while the international coal supply market was depressed and the commodity was trading at unattractive prices, which would hardly make up for operational overheads?
The tribunal conceded in its 2016 statement that "at the time of the [Competition] Commission’s investigation into the proposed transaction, the acquiring firm had not undertaken due diligence on the target group…."
Now the Optimum assets are back in the hands of business rescue practitioners, while the Guptas and Zuma
are at large, leaving the fate of more than 3,000 workers in the balance.
Where are Economic Development Minister Ebrahim Patel and Labour Minister Mildred Oliphant in all of this?
• Phillips is news editor
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