Vitol drops plan to acquire Gupta firm’s coal terminal stake
The world’s largest independent oil trader dumps deal to purchase a stake in Richards Bay Coal Terminal
Vitol Group, the world’s largest independent oil trader, walked away from a deal to buy a stake in the Richards Bay Coal Terminal from a company controlled by SA’s Gupta family.
"The consortium comprising Vitol and Burgh Group Holdings will not be proceeding with the acquisition," the commodities trading house said on Monday.
The proposed deal, first reported in September 2016, would have seen Vitol and SA’s Burgh Group acquire Optimum Coal Terminal from the Guptas’ Tegeta Exploration and Resources. It would have given the consortium a 7.61% stake in Richards Bay and rights to ship about 8-million tonnes of the fuel from SA annually.
The Guptas are friends with President Jacob Zuma. In December 2015 the family, along with Zuma’s son, Duduzane, bought Optimum through Tegeta for R2.15bn from miner and trading house Glencore.
The purchase would have given Vitol, which handles more than 7-million barrels of oil a day and more than 30-million tonnes of coal annually, access to a key export facility in one of the largest coal-producing countries. Vitol has trading and marketing operations in SA and its VTTI unit is building a fuel-storage facility in Cape Town.
In 2012, it formed a coal-trading company in neighbouring Mozambique by buying a stake in a terminal that exports coal from mines in SA.
While SA has quality coal reserves and is well positioned to export the fuel to India and China, shipments are constrained by limited port capacity. Only shareholders have an automatic right to export through Richards Bay, which accounts for almost all of the country’s coal-shipping capacity. Other investors in the facility include Anglo American, South 32 and Glencore.
Oakbay Resources and Energy, a mining company controlled by the Guptas, will delist from the Johannesburg Stock Exchange in July after if was unable to find a new transfer secretary or sponsor to comply with exchange rules.
Former public protector Thuli Madonsela published a report saying that Zuma and some ministers may have breached the government’s code of ethics in their relationship with the Gupta family.