SERITI Resources, the black-owned consortium that today concluded the R2.3bn purchase of thermal coal mines from Anglo American, said it would be interested in buying Optimum Coal Mine, the Gupta family-owned colliery that has been put into business rescue.
“We are interested in looking at it,” said Mike Teke, CEO of Seriti. Asked if the mine had been harvested, Teke responded: “There is coal in the ground there”.
Said Anna Mokgokong, chairwoman of Seriti: “This guy [Teke] owned Optimum. What did he see there? The answer lies in that. But I can’t say more than that as we have to understand the assets that we have (currently) got. Other things may emerge, but I can’t talk about those now,” she added.
Optimum Coal Mine, situated in South Africa’s Mpumalanga province, supplies Eskom’s Hendrina power station. However, under the control of the Gupta-owned Tegeta Resources, the mine has struggled to meet the coal qualities required of Eskom. The mine was last week placed into business rescue while mine employees have staged a strike claiming they have not been paid for the last month.
Teke helped run Optimum and the Koorfontein coal mines after they were split out from BHP Billiton as it was then called. Glencore then bought the two operations before having to place it into business rescue several years later under pressure from Eskom. The utility’s then management had allegedly spied an opportunity for the Gupta family to whom former president Jacob Zuma was close. Tegeta Resources subsequently bought Optimum Coal, partly using funds allegedly for the pre-payment of coal from Eskom.
Teke was commenting following the finalisation of the purchase by Seriti of three Eskom dedicated coal mines – New Vaal, Kriel and New Denmark – from Anglo American, a deal that was first unveiled in April last year. The mines supply some 24 million tonnes a year (Mtpa) of thermal coal to Eskom’s Lethal, Tutuka and Kriel power stations comprising a quarter of South Africa’s coal generating capacity.
Seriti consists of Teke’s Masimong Holdings, Thebe Investment Corporation, Zungu Investments Company, led by Sandile Zungu and Community Investment Holdings, owned by Mokgokong. It was also announced in January that Seriti is buying Anglo American’s shares in New Largo, an undevelopment thermal coal project that will supply coal to Eskom’s Kusile power station, currently under construction. That transaction has been valued at R850m.
“This transaction continues the reshaping of our global asset portfolio based on value and the optimal deployment of capital, while realising value for our shareholders and ensuring reliable supply of coal to Eskom,” said Mark Cutifani, CEO of Anglo American.