Platinum Producers in S. Africa Severing Ties With Gupta Company

  • Gupta-linked companies had bank accounts suspended in April
  • Suppliers without banks raise payment problems for miners
Source: Getty Images

South African platinum miners are severing ties with a services firm that accounts for the biggest share of profit at the Gupta family’s investment company, the latest sign that the friends of President Jacob Zuma are under pressure from the country’s business community.

The miners are ending, or not renewing, contracts with JIC Mining Services (Pty) Ltd. because it’s difficult to pay for their services after the nation’s biggest banks closed accounts connected to Gupta-linked companies.

JIC has lost a contract at Platinum Group Metals Ltd.’s Maseve mine, according to a person familiar with the matter who asked not to be identified because the contract is confidential. JIC as well as Oakbay Investments, the Guptas’ investment vehicle, didn’t respond to requests for comment. Platinum Group didn’t answer queries. Impala Platinum Holdings Ltd. won’t consider JIC for future tenders if it can’t reinstate its banking facilities, spokesman Johan Theron said by phone.

“We can’t pay people cash,” Theron said. “Service providers must have bank accounts. If they want to tender for additional work without a bank account it would be problematic.”

Gupta Influence

Some officials of the ruling African National Congress have accused the Guptas of trying to influence cabinet appointments, and the state graft ombudsman has prepared a report on links between the family and Zuma, whose son is in business with them. Barloworld Ltd. this week asked a court to liquidate the Gupta-linked Optimum coal mine after it didn’t pay for services. The case was dropped after a partial payment was made. Both Zuma and the Gupta family have denied any wrongdoing.

Impala, which has worked with JIC for 20 years, has given the company time to resolve the issue, Theron said.

JIC, which was bought by the Guptas in 2006, is still used by Royal Bafokeng Platinum Ltd., Mpueleng Pooe, a spokesman for the miner, said by e-mail.

“Confidential engagements are continuing between ourselves and JIC relating to our relationship,” he said, declining to give further details.

JIC is the largest company within the mining division of Oakbay Investments. Mining contributed 1.2 billion rand ($87 million) of revenue, 45 percent of its total, in the year ended Feb. 29, Oakbay said in a statement last month.

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