An investigation has been launched into the circumstances around a Sept. 15 fire that engulfed parts of Optimum coal mine in Mpumalanga, South Africa, days before bidders make final submissions for the property and other coal assets owned by former Gupta-linked Tegeta Exploration and Resources Pty. Ltd.
Business rescue practitioner Louis Klopper, speaking to S&P Global Market Intelligence on Sept. 17, confirmed the investigation and said initial indications were that a conveyor belt, which was used to transport coal to Eskom Holdings SOC Ltd.'s Hendrina power station, caught fire when a main power cable fell down and set the grass alight.
While the damage was still being assessed, Klopper's rough estimate points to between 15 million South African rand and 20 million rand, News24 reported Sept. 16.
"We do not suspect any foul play, but obviously we cannot say for sure until the investigation has been completed," Klopper told Market Intelligence.
Klopper said bids for the Tegeta assets closed two months previously, and the business rescue practitioners would like to select a winning bidder by mid-October. "We have given interested parties until midnight tonight to submit any outstanding information we have requested from them," Klopper said.
Tegeta's assets include Optimum, Koornfontein Mine (Pty.) Ltd., Optimum Coal Terminal (Pty.) Ltd. and a share in Richards Bay Coal Terminal Co. Ltd., Klopper confirmed.
Tegeta has been under administration since February 2018. Optimum was supplying coal to Eskom and was the subject of an investigation over allegations that members of the Gupta family used their relationship with former President Jacob Zuma and his son Duduzane to acquire business contracts.
A subsidiary of Dubai-based company DSA Investments and two South African companies have put in a bid to buy the assets, Bloomberg reported Sept. 17.
DSA Investments unit Orchid Mining has a 49% stake in the venture making the bid, with the remainder held by the Smada Group and Nehawu Investment Holdings, which invests funds on behalf of the National Education, Health and Allied Workers' Union. Yusuf Adams, founder of Johannesburg-based Smada, told Bloomberg that he sees opportunity in the coal industry. Smada primarily focuses on the property, security and information technology sectors.
The joint venture had begun eyeing the assets after the failed acquisition by a South African consortium due to legal disputes between the administrators and Gupta family's Oakbay Investments Pty Ltd. owner of Tegeta.
