Transnet coal train wagons at the Richards Bay Coal Terminal in Richards Bay. Picture: Simphiwe Mbokazi
Johannesburg - Mineworkers’ union NUM has flagged the role of the National Prosecuting Authority (NPA) in the Optimum Coal Mine (OCM) dispute over export rights, saying the prosecuting body must be transparent if it is being weaponised to serve the interests of the powerful political elite.
Last month, the NPA’s court-appointed curator for OCM, which is under business rescue, reported that the mine was losing potential profits in the current arrangement to have contractors mine the several mini-pits on the OCM’s behalf.
As part of the preservation order obtained by NPA head Shamila Batohi in March last year, the curator is tasked to work alongside the OCM’s business rescue practitioners to ensure the conservation of the assets, which Batohi alleges were acquired unlawfully.
This comes as the Richards Bay Coal Terminal (RBCT), which had also complained that the OCM mining profits were not accruing to the company due to the mini-pits mining arrangement, has remained unmoved that by Tuesday OCM will forfeit its rights to access the lucrative coal export terminal in KwaZulu-Natal.
In the past, when embattled OCM was not operational, big mining companies like Glencore, which are shareholders of RBCT, had been using its export allocation to boost their profits, OCM said in a statement last year.
This week OCM, which holds export entitlement in RBCT under Optimum Coal Terminal (OCT), applied to the court for a temporary interdict against the looming ban set to kick in on January 31. NUM Highveld regional chairperson Malekutu Motubatse said on Tuesday “what is more perturbing is the fact that RBCT is hiding behind the NPA actions”.
“We are also flabbergasted to see the NPA only resurfacing now with its enforced preservation order against Optimum mine… A fundamental question, therefore, remains: Whose class interest is NPA serving? The perpetual obsession by the NPA is very worrying.”
In the past, President Cyril Ramaphosa was in partnership with Glencore while a director of the Shanduka Group, a diversified industrial company with significant coal mining interests including a stake in OCM –later sold to Gupta-owned Tenet Resources in 2016. The chief executive of Seriti, Mike Teke, donated R600 000 to Ramaphosa’s ANC presidential campaign in 2017, dubbed #CR17. Bernard Dalton, the executive head of marketing at Thungela, previously Anglo Coal, is also on the board of RBCT.
The NPA said NUM was a party to the court proceedings in the OCM matter and thus fully aware of pleadings filed by all the parties, including the reports filed by the curator as well as the current status of the matter.
“Instead of interacting with facts and responding to well-reasoned arguments, the NUM appears to resort to litigating through the media,” said NPA spokesperson advocate Mthunzi Mhaga.
He said the NPA had considered the “well-reasoned” letter sent by RBCT in which it communicated its decision to withdraw a temporary arrangement with the business rescue practitioners of OCT to export coal through Richards Bay.
“The NPA fully supports the decision of RBCT since the arrangement is currently abused and is benefiting a small group of mini-pit operators. It is not used to benefit OCM in the long term or its creditors, as the curator bonis has demonstrated,” he said.
Had OCM conducted its mining activities, said Mhaga, or if the mini-pit operators conducted their operations for the benefit of OCM, OCM’s profits would have been sufficient to settle, in full, all OCM’s creditors at current coal prices and OCM would be able to exit business rescue within several months.
He said: “The NPA has expressed its desire, once the mine is forfeited, to sell it in a transparent process so that the mine can start full operations as soon as possible.”
OCM and OCT were owned by the notorious Gupta family before being placed in business rescue in early 2018. After the business rescue, Liberty Energy, owned by Daniel McGowan, a former Gupta creditor, was supposed to take over OCM and OCT.
At the last minute, Batohi stepped in and obtained a preservation order preventing Liberty from buying the mine. According to Batohi, the assets were the proceeds of unlawful activity. The NUM said it was clear more than ever that the RBCT’s decision has nothing to do with the regulatory compliance issues raised against OCM.
“The NUM cannot be fooled by the RBCT because this decision is a decision of capitalist conglomerates who are expanding and maximising profits,” said Motubatse.
He said the union was worried that the RBCT decision would result in job losses in the areas around OCM in Mpumalanga.
“These rapacious capitalists will continue to expand while the downtrodden masses and the marginalised working class will continue to suffer. The question we are asking ourselves as the NUM is, what is going to happen to the terminal that belongs to Optimum? Is it going to be distributed among board members who in their own rights are also mining bosses? This is what we call rapacious capitalism as the NUM.”
On Wednesday the “Sunday Independent” sent questions to RBCT to ascertain what would happen to the export allocation of OCM after its ban, but the RBCT did not respond. Other questions included:
Given that the OCM business rescue plan was adopted by the requisite majority of OCMs creditors in September 2020, how would RBCT suggest the business rescue practitioners should have had the insight to know that such plans’ implementation would be delayed due to actions by the NPA, and, in addition, the international price of coal would increase to levels never seen before due to a war between Russia and Ukraine?
It has been suggested that the shareholders of RBCT are acting with cartel-like behaviour by trying to retrospectively dictate what margins or commercial arrangements a shareholder could or should have made. Has RBCT made enquiries as to the financial affairs of each of its shareholders and any related foreign interests and/or transfer pricing arrangements?
It appears that the largest coal players, who are shareholders of RBCT, such as Seriti, Thungela and Glencore, are able to exert significant market power and are engaging in exclusionary conduct which creates a direct benefit for such shareholders who will once again be able to utilise OCT’s suspended RBCT entitlement, forever losing these profits for OCM/OCT, and creates a detriment to OCM/OCT and the coal market in general. Please comment.
Has the RBCT been placed under any pressure, directly or indirectly, by the NPA, or the curator to align itself with the position adopted by the NPA and the curator?
The NUM threatened to mobilise its members against RBCT and camp at Richards Bay. “We cannot be reduced and undermined by this board,” said Motubatse.