Mineral resources minister Gwede Mantashe. Picture: GCIS
Mineral resources minister Gwede Mantashe. Picture: GCIS

Mineral resources minister Gwede Mantashe has called for urgent action to resolve the problems facing victims of state capture, particularly at Optimum and Koornfontein coal mines.

The sale of Optimum Coal, which consists of the Optimum and Koornfontein coal mines, as well as their coal export allocations at the Richards Bay Coal Terminal, considered a prize asset, was a central focus of former public protector Thuli Madonsela’s “State of Capture” report. It showed how Eskom, SA’s largest state-owned company, essentially forced Glencore to sell the operation in 2016.

Eskom then helped Tegeta Exploration & Resources, owned by the Gupta family, to acquire it in a sweetheart deal — ultimately at SA taxpayers’ expense.

However, in the years that followed, the Gupta empire unravelled under immense pressure from civil society and opposition political parties. In 2018, Gupta-linked businesses had their bank accounts shut down and were thus unable to operate. The businesses, including Optimum, were consequently placed under business rescue. The mines subsequently stopped paying workers and contractors in October 2018.

Since then, Eskom has struggled with an inadequate supply coal for its power stations.

Speaking at the official ceremony to hand over 50% shareholding held by mining company Exxaro to former employees of Arnot coal mine, Mantashe said the miners, like the workers at Optimum and Koornfontein, were all victims of state capture.

“As we celebrate [the transfer of shares], we should also be working hard to resolve the problems facing other victims of state capture in Optimum and Koornfontein,” said Mantashe.

“Those are not victims of anybody else; they are victims of state capture and corruption. They are victims of collaboration between Eskom and the Guptas. Our commitment should be to work together to come up with a permanent solution for Optimum and Koornfontein,” the minister said.

He described the transfer of the shares to former Arnot employees as “revolutionary”. “We chose [to do the handover] on May Day to highlight the significance of giving workers ownership.  It is revolutionary. It has never happened in SA.  Eskom must come to the party. It must change its behaviour as a monopoly,” said Mantashe.

“If workers own an entity, we believe they will be able to take care of that entity. We must empower workers. We are hoping this experiment will be a success,” he said.

Exxaro shut down the Arnot colliery in 2015 after the coal supply agreement with Eskom came to an end and the power utility refused to invest further in cost-plus mines.

In the past, Eskom developed Arnot and other collieries in conjunction with miners so as to ensure a steady and affordable supply of coal.

Allegations at the time were that Eskom wanted to push for contracts with Gupta-linked Tegeta despite the fact that a deal with Exxaro would have been more cost effective.

Earlier in 2019, junior miner Wescoal and a partner said it would acquire the closed Arnot coal mine from Exxaro, with a plan to restart production before the end of the year and supply Eskom.

Wescoal will indirectly acquire a 50% stake in Arnot while its partner, Innovators Resources, will hold the other half. The shareholders of Innovators Resources include former workers at Arnot mine.