Director General of Mineral Resources, Adv Thabo Mokoena; Minister of Mineral Resources, Gwede Mantashe; Deputy Minister of Mineral Resources, Godfrey Olifant

Mineral Resources Minister, Gwede Mantashe has met with the department’s senior managers as well as CEO’s of entities reporting to the DMR, to brief the portfolio committee on new developments at Optimum coal mine.

Mantashe noted that he was positive about the outcomes of the stakeholder briefing and said the department was committed to working with the committee.

The coal mine situated in Mpumalanaga was placed under business rescue last week along with three other Gupta-owned mines and was facing liquidation after mine conditions turned critical.

According to sources working at Optimum, late payment of salaries resulted in debit orders of more than 3000 miners dishonoured, bringing extra bank charges. Sources also noted that employees had no overalls, hard hats and other important safety gear.

Minister Mantashe announced to delegates attending the briefing that workers at mines across the Tegeta group have now been paid and that the business rescue practitioners, who were also present, would give a more detailed update.

“The business rescues practitioners have given us hope that the mines can be brought back to operation. They will present in detail the situation and plans underway.”

Can the business be rescued

Business rescue practitioners Johan Louis Klopper and Kurt Robert Knoop were appointed by eight Gupta-linked companies two weeks ago as creditors lined up. They were meant to meet with Parliament’s Portfolio Committee on Mineral Resources last Wednesday, however, the meeting went ahead in their absence.

Today they briefed the committee and other delegates.

Louis Klopper, senior business rescue practitioner, said “At the core of difficulties facing Tegeta is lack of access to transactional banking facilities. The four mining operations can be rescued, conditional upon resolving, primarily, the banking issue.”

“Secondly, mine management and unions must work together to restore the mine to full production, in order to meet contractual obligations. We are confident that with the full cooperation of all stakeholders the mines can be restored.”

Klopper noted that they had been approached by a number of interested parties wishing to purchase the assets of the operating companies once the business rescue process was complete.

The bank is to blame

Details of Optimum Coal Mine’s turnaround were revealed in an affidavit filed by the mine’s business rescue practitioners.

The papers outlined that Bank of Baroda’s announcement in February 2018 to close all Gupta accounts and depart from the country was to blame for business rescue proceedings being instituted.

In anticipation of the operational difficulties to be expected following Bank of Baroda’s impending closure of their accounts, Optimum required the protection of the business rescue process in order to continue doing business.

The bank plans to uproot its South African operations by the end of this month.

Minister Mantashe concluded and said, “While not all solutions will be found today on the issue of Tegeta’s mining operations, the meeting has provided clear pointers on what needs to be done.”