South Africa Minister Denies Gupta Favors in Glencore Talks

  • Sale of Optimum mine to Tegeta preserved jobs, Zwane says
  • Mines ministry talks with all companies, including Gupta's

South African Mines Minister Mosebenzi Zwane said he didn’t “unduly” favor a company controlled by friends of President Jacob Zuma in talks over the sale of Glencore Plc’s Optimum coal mine.

Glencore is selling the mine to Tegeta Exploration & Resources (Pty) Ltd., a company controlled by the Gupta family who are in business with one of Zuma’s sons, after the Baar-based firm placed the operation under bankruptcy protection. While Glencore said it worked with “stakeholders,” including the government, to facilitate Optimum’s sale, the Sunday Times reported that Zwane met Chief Executive Officer Ivan Glasenberg for talks at the Dolder Grand Hotel in Zurich about the matter.

Mosebenzi Zwane

Photographer: Waldo Swiegers/Bloomberg

Zwane’s involvement in the sale was for the purpose of preserving Optimum’s 3,000 jobs, he said on Friday at a presentation arranged in Johannesburg by TNA Media, another company controlled by the Gupta family. When asked whether he took part in talks between Glencore and Tegeta, Zwane said he flew to Zurich on a commercial flight without the presence of the Guptas.

“My job is to ensure that I engage with the stakeholders without having favorites,” Zwane said. “I will not favor any businessperson -- whether the Guptas -- unduly so, but I will not hesitate to help in instances, especially like Optimum Coal, where a business was put in business rescue.”

Business Empire

The Gupta family have built a business empire spanning computer equipment, media and mining since Atul Gupta arrived in South Africa from Uttar Pradesh, India in 1993. He runs the businesses together with his brothers Ajay and Rajesh. Zwane was appointed as minister by Zuma in September.

On Friday, Zwane was asked whether he is friends with the Gupta family.

“Let me put the record straight: I met with them, I’ve engaged them, I’ve engaged other big mining giants and will continue to do so in future,” he said. “One of my responsibilities is to attract investment in the country and you can’t attract investment in the country if you’re not talking to people like the Guptas.”

The sale of Optimum to Tegeta was beneficial for economic transformation in South Africa, Zwane said, referring to a government policy aimed at accelerating black-ownership of businesses as a way to redress disparities caused by apartheid.

“Tegeta is composed of the majority black shareholders,” Zwane said, without elaborating further on the ownership of the company. “We have to come together as leaders and come up with mechanisms so that we transform.”

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