Eskom accused of pushing for Glencore mine closure

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Headquarters of Eskom, Megawatt park, north of Johannesburg. Eskom generates approximately 95% of the electricity used in South Africa and approximately 45% of the electricity used in Africa.

South Africa’s former mining minister has accused Eskom of pressuring him to shut down Glencore’s mines to force the sale of a colliery to the Gupta business family.

Ngoako Ramatlhodi said utility bosses wanted him to use the threat of a multibillion-rand penalty, levied on the Optimum colliery for low-quality coal, to force Glencore to sell. Optimum supplied all the coal to the utility’s 2,000MW Hendrina power station.

Mr Ramatlhodi said he was fired by President Jacob Zuma shortly after he refused to comply with the alleged request made in 2015 by Brian Molefe, Eskom’s chief executive, and Ben Ngubane, its chairman.

Weeks before Mr Ramatlhodi said he was approached by Mr Molefe and Mr Ngubane, Glencore had rebuffed a R2bn ($151m) offer by Tegeta, a company owned by the Guptas, who have ties to Mr Zuma, to buy Optimum. Tegeta eventually acquired the mine last year.

“They insisted that I must suspend all the Glencore mining licences pending the payment of [the penalty] . . . I said I’m not going to shut the mines,” Mr Ramatlhodi told South Africa’s amaBhungane Centre for Investigative Journalism.

When he refused, Mr Ramatlhodi said that Mr Ngubane told him he would have to report on their meeting to Mr Zuma.

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The claims will add to fears that allegations of corruption at vital state-owned companies under Mr Zuma’s presidency are not being addressed. Last week Eskom reinstated Mr Molefe as its chief executive following his resignation last year over claims of cronyism over the sale of Optimum.

A report last year by the country’s public protector into state corruption detailed mobile phone evidence that Mr Molefe was in constant contact with the Guptas as they negotiated to buy the mine. Mr Molefe denied wrongdoing but said that he would leave Eskom to clear his name.

Glencore placed the Optimum mine into business rescue, an alternative to bankruptcy, in August 2015 after Mr Molefe refused to renegotiate a long-term supply contract on which the colliery was losing money. Mr Molefe also reinstated the R2.1bn penalty.On Tuesday, Eskom said Mr Ramatlhodi’s claims made “absolutely no sense” and were “outlandish allegations”. Mr Molefe could not be reached for comment, and Mr Ngubane described the claims as “preposterous”.

Mr Molefe missed a planned appearance on Tuesday at a conference to drum up investor interest in Eskom, which supplies nearly all of the power for Africa’s most industrialised economy. Glencore, which remains Eskom’s fourth-largest supplier, declined to comment.

The alleged threat to suspend Glencore’s mining licences, which would have forced the closure of 14 coal mines and put 35,000 jobs at risk, risks reviving concerns among international mining investors that South Africa is becoming too unstable politically.

The Guptas, who have been accused of using a friendship with Mr Zuma to steer state contracts in favour of their mining-to-media conglomerate, have been at the heart of the factional strife within the ruling African National Congress over the scandal-hit presidency. The party will vote in December to pick a new leader.

Mr Ramatlhodi’s claims follow allegations last year by Mcebisi Jonas, the former deputy finance minister, that Gupta family members offered him a bribe to take the top post, shortly before Mr Zuma removed Nhlanhla Nene from the Treasury in December 2015. The Guptas and Mr Zuma have always denied the allegations against them.

Mr Zuma fired Mr Jonas and Mr Ramatlhodi in the April cabinet reshuffle that also removed Pravin Gordhan, the finance minister and opponent of graft. The reshuffle led to open criticism of the president’s leadership by senior ANC figures.

Cyril Ramaphosa, the deputy president and a leadership contender against Nkosazana Dlamini-Zuma, Mr Zuma’s ex-wife, has called for a full judicial investigation into the public protector’s report.

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