- Tegeta seeks approval to buy Glencore's Optimum colliery
- Tegeta is a joint venture between Gupta family and Zuma's son
Tegeta Exploration & Resources (Pty) Ltd., a venture whose shareholders include the Gupta family and South African President Jacob Zuma’s son Duduzane, is acquiring the rights to export 8 million metric tons of coal through Africa’s biggest port for the fuel.
Richards Bay Coal Terminal, which lies on South Africa’s north east coast and is owned by mining companies, shipped a record 75.4 million tons last year and has a design capacity of 91 million tons. Its shareholders include Anglo American Plc, Glencore Plc and South32 Ltd. and almost all of South Africa’s coal exports move through the terminal.
The purchase “allows us access to an export contract,” Nazeem Howa, the chief executive officer of Tegeta shareholder Oakbay Investments (Pty) Ltd., said at an antitrust hearing in Pretoria on Wednesday. “Until now, that’s been controlled by the big players. It’s quite significant access.”
Tegeta agreed to buy Optimum for 2.15 billion rand ($138 million) in December after Glencore put the business into administration, saying that the refusal by state power utility Eskom Holdings SOC Ltd. to renegotiate a coal supply deal had made it unprofitable.
The Guptas, a family from India whose South African businesses span media to uranium mining, have been criticized by labor unions and opposition parties for their links to Zuma. In addition to doing business with his son their companies have employed his daughter and one of his wives. Mosebenzi Zwane, South Africa’s mines minister, said he traveled to Switzerland to meet with Glencore to try and advance the deal to save jobs.
The combined export allocation is from Optimum Coal Mine and Koornfontein mine, which is also part of the deal, Louise Brugman, a spokeswoman for Optimum’s administrators, known locally as business rescue practitioners, said in an e-mailed response to questions.
The Competition Commission recommended the purchase be approved, provided it doesn’t result in any of the 3,000 employees in the joint operations losing their jobs. The Competition Tribunal must now make a ruling as to whether it can go ahead.