Photo: Ian Landsberg Photo: Ian Landsberg
Johannesburg - Tegeta Exploration & Resources, a
company part-owned by South Africa’s Gupta family, reached an arbitrated
settlement over a fine levied on its Optimum coal mine by power utility Eskom
Holdings.
The R2 billion penalty was originally issued to the mine’s
previous owner, Glencore, which put Optimum into bankruptcy protection in
August 2015 after Eskom refused to amend an unprofitable coal-supply contract
and fined the producer because the fuel didn’t meet
specifications. Tegeta, a company in which both South African President
Jacob Zuma’s son, Duduzane, and members of the Gupta family, who are friends
with the president, have indirect interests, completed the purchase of the mine
last year.
“We are not at liberty to disclose the contents of the
agreement but at least we can say that the matter is now resolved,” Khulu
Phasiwe, a spokesman for the utility, said by phone. “Details cannot be
divulged but the arbitrator has made an award.”
Read also: Eskom-Tegeta deal in best interests of SA
Glencore spokesman Charles Watenphul declined to comment.
Representatives of Gupta-controlled Oakbay Investments, which owns a stake in
Tegeta, didn’t immediately reply to an email seeking comment.
“At the time of this transaction, it was an insane coal
price contract with an insanely large fine,” Peter Major, director and head of
mining at Cadiz Corporate Solutions, said of the Optimum sale. It’s unlikely
Tegeta would have bought the asset without expecting that the issues would be
resolved, he said.
Peter Grauer, the chairman of Bloomberg LP, is a senior
independent non-executive director at Glencore.