OPTIMUM Coal Mine (Optimum) is reported to have agreed an export agreement for at least 200,000 tonnes of thermal coal with Vitol, the trading company that once sought the South African firm’s entire 5.7 million tonnes a year (Mtpy) export entitlement through Richards Bay Coal Terminal (RBCT).
Citing two sources close to Optimum, industry publication, McCloskey Coal Report (MCR), said the Geneva-based trading firm would pay for the coal upfront which would provide Optimum will a much-needed financial lifeline. Optimum failed to pay employees for a second consecutive month in March prompting the National Union of Mineworkers (NUM) to seek business rescue practitioners (BPRs) of its own in an effort to save jobs.
The current BPRs – Louis Klopper and Kurt Knoop – have been criticised for failing to stabilise Optimum which was placed into business practice by former owner, Tegeta Exploration and Resources (Tegeta Resources), a company operated by the Gupta family. The Guptas have since left South Africa amid charges of corruption.
The BPRs claim that Charles King SA, a Swiss-company, claims to have rights over Optimum assets having already made a down-payment, and had threatened legal action if the BRPs continue to process a possible sale in terms of the business rescue procedure. Pembani, a black-controlled firm which has Glencore as a partner, Exxaro Resources, and consortia Seriti Resources and Phakamisa Consortium have expressed an interest in buying Optimum and/or its RBCT entitlement.
MCR said in a report today that Vitol had agreed this week to a pay Optimum 80% of the cost for the 12-month export coal supply agreement. It calculated that based on the current API4 price of around $92/t, this would be an upfront payment of $14.7m. MCR said that a Vitol spokeswoman declined to comment, while Optimum officials could not be immediately reached for comment.
The speculated sale of export coal raises a number of questions about who is making the decisions at Optimum, especially as it languishes in business rescue.
Eskom told Miningmx last week that Optimum, nor other former Tegeta Resources companies including Koornfontein and Brakfontein coal mines, were not meeting their contractual obligations. “Eskom will follow the remedies as per the coal supply agreements to address under-supply,” said Khulu Phasiwe, a spokesman for Eskom. “The utility is awaiting the finalisation of the business rescue plan,” he added.
