EDITORIAL: Optimum deal way off optimal
The government needs to ask itself why it bent over backwards to do a deal with a company owned by foreigners and the president’s son instead of supporting black entrepreneurs, as it often claims it intends to do
If there is an Exhibit A that SA has been the victim of "state capture", it is the circuitous tale of Optimum coal mine, now jointly owned by the Gupta family and President Jacob Zuma’s son Duduzane. The company was sold in 2016 by international miner and trading house Glencore for R2.1bn to Tegeta, a company controlled by the Gupta family, who then transferred 26% of the shares to Zuma junior. This part of the transaction is not disputed, but just about everything else is. The background is that the mine was losing money when the rand was strong and coal prices were weak. Many large mining companies sell coal to Eskom partly because of the security provided by long-term contracts and the local/export mix mining coal provides. Eskom power stations use lower-quality coal and mining companies tend to make higher profits from better-quality export coal. So, it was with Optimum, one of the companies that had the right to export coal from the Richards Bay coal terminal. But as often happ...
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