Work to secure Gupta mine funding down to the wire as employees grow desperate
After four months without income, workers at the Optimum and Koornfontein mines are likely to be paid soon
Thursday marked the end of yet another month without salaries for the desperate workers at the Guptas’ Optimum Coal and Koornfontein mines.
Lawyer for the business rescue practitioners of the distressed companies Bouwer van Niekerk said they were confident the payments would be made “during the course of next week”.
The workers have not been paid since October 2018 and the operations have been idle since December. Persistent legal battles have frustrated attempts to rescue the business.
Optimum and Koornfontein, along with six other companies linked to the Gupta family, were placed under business rescue in February 2018 when their banking facilities were withdrawn by the banks. Business rescue is a provision of the Companies Act aimed rehabilitating distressed entities.
The rescue essentially requires selling of assets to a new owner, but in this case, the process has been unable to get off the ground as a barrage of legal action has been brought against the business rescue practitioners. In most instances, the applicants are affiliated to the Gupta family.
As an interim solution, the rescue practitioners are working to finalise a R1bn funding deal for Optimum mine with a consortium led by the state-owned African Exploration Mining and Finance Corporation.
Once the deal is finalised and the funds flow, money will be prioritised to pay salaries and to restart operations.
As part of the arrangement announced last week, the consortium will have the first option to buy the assets.
For Koornfontein, too, there had been some progress. Van Niekerk said a signed proposal for financing from Project Halo, another consortium bidding for the Optimum assets, had been received.
An application to interdict the deal with the AEMFC-led consortium was lodged this week by Centaur Ventures, a creditor of the Optimum mine and a company with Gupta links.
In the Public Protector’s State of Capture report, its subsidiary, Centaur Mining was mentioned for having paid over R885m towards the family’s purchase of Optimum Coal Mine.
In the application, Centaur accused the rescue practitioners of “opaque dealings” and of running the mine in a manner that has failed to seek maximum value for creditors. Centaur said it required more information on the financing deal in order to understand its impact.
Van Niekerk, however, said the application had in no way stalled progress on the funding deal.
He said the application was being opposed by the rescue practitioners as well as Eskom — another creditor of Optimum’s.
He said he was confident payments to workers would be made during the course of next week.
Zonica Mostert, a volunteer at Feed the Miner — a nonprofit organisation started up by community members to collect mainly donations for the struggling Optimum and Koornfontein employees — said the mining community was growing increasingly desperate.
The organisation was now handing out food parcels every two weeks instead of twice a week. On Monday, 40 food parcels were handed out and another 50 would be distributed on Friday, Mostert said.