Optimum’s return halted
NEW OWNER BLAMES COMPETITORS WHO ARE SHAREHOLDERS Since Liberty’s suspension from exporting, 1 208 jobs have been lost, with over 300 in last two months.
This week’s planned relaunch of Optimum Coal Mine (OCM) under new owner Liberty Coal after six years in business rescue has been put on hold pending resolution of a dispute over its export entitlement through the Richards Bay Coal Terminal (RBCT).
“It is unfortunate that Liberty Coal’s competitors wish to delay any access to the crucial port allocation at RBCT historically held by OCT [Optimum Coal Terminal], while imposing unreasonable conditions on Liberty Coal which can only be described as unfair, anti-competitive and/or oppressive,” said Liberty Coal in a statement.
The competitors being referred to here include the country’s largest coal producers and exporters – Seriti, Thungela and Glencore, all of which are shareholders in RBCT. The ongoing dispute means competitors are profiting from their use of the allocated rail and port facilities that should now be available to Liberty Coal, said the company.
Optimum, once the most prized trophy in the Gupta portfolio of assets, is in the process of exiting business rescue following a successful bid for the mine assets and liabilities by Liberty Coal, controlled by British businessman and former Gupta associate Daniel McGowan.
Liberty said the mine’s profitability and operations are dependent on its ability to export coal. Without that, Optimum is a “white elephant”, and the business rescue plan is doomed to fail, according to Liberty Coal director Ulrich Bester in a court affidavit filed in one of the many cases that have hobbled the group’s rescue.
Liberty Coal is a subsidiary of McGowan’s Templar Capital, which is the single largest creditor in OCM, having acquired its R1.3 billion claim via a cession of another company in which McGowan is director, Centaur Ventures.
RBCT has been in dispute with Optimum Coal over several instances of default relating to unpaid wharfage fees, which were subsequently settled.
RBCT suspended Optimum’s export entitlement while forfeiture proceedings were underway.
Agreement
In 2022, the National Director of Public Prosecutions (NDPP) brought two applications for the forfeiture of all shares in the OCM and Optimum Coal Terminal (OCT) at Richards Bay by Tegeta, the Guptas’ holding company.
The NDPP was also seeking forfeiture of Templar Capital’s R1.3 billion claim against OCM.
As Moneyweb previously reported, Liberty agreed to pay R461.7 million to the state, without admitting liability, in settlement of these claims. This was supposed to pave the way for the mine to exit business rescue. Liberty or associated companies have paid close to R300 million to RBCT on behalf of Optimum Coal.
It says this was a commitment it was willing to take on, though it had no legal obligation to do so, providing RBCT uplifted OCT’s suspension. This was part of a so-called “end game” agreement between RBCT and Optimum that would allow for the resumption of coal exports.
Job losses
Since RBCT suspended OCT’s export entitlement, 1 208 jobs have been lost at Optimum Coal Mine, with more than 300 of these coming in the last two months.
Some 720 (of the remaining 1 641) staff are employed by Optimum’s coal contractor Salaria, which is being paid to mine and stockpile coal that cannot be exported.
Optimum said it currently has about one million tons of coal stockpiled.
“Unless and until the RBCT issue is resolved, the future of the Optimum Mine is unknown and perilous,” said Liberty.
Moneyweb reached out to RBCT for comment but had not received a reply by the time of publication.