Gwede Mantashe upbeat on Gupta mines' future as business rescue kicks in

New Mining Minister Gwede Mantashe.
New Mining Minister Gwede Mantashe.

Cape Town - Optimum coal mine and other mining operations can be returned to normal business operations, Minister of Mineral Resources Gwede Mantashe and business rescue practitioners told Parliament on Wednesday morning.

Ten days have passed since eight mining companies under the Gupta-owned group of mining operations in South Africa started their business rescue process, following the exit of the Bank of Baroda from the country, which left the mines without banking facilities to pay employees and creditors.

The fortunes of the once politically connected Gupta family soured rapidly after President Cyril Ramaphosa removed former president Jacob Zuma from the west wing of the Union Buildings. Their private properties and other business operations have since been raided by government agencies.

This follows widespread perceptions that the Guptas influenced Zuma’s government for lucrative government contracts and preferential treatment for the various businesses. The Gupta family and Zuma have denied any impropriety.

The meeting was also Mantashe’s first appearance before the committee since being appointed mineral resources minister. He told Parliament’s portfolio committee on mineral resources that the first update he received from business rescue practitioners gave him cause to be optimistic about the Gupta mining companies’ future.

“What heartened me was the fact that they explained to us that creditors and workers have been paid. All of the mines in the Tegeta Group are attending to the problems and gave me the assurance that the operations can get back to a normal state of work,” said Mantashe.

Logistical roadblocks

Louis Klopper, business practitioner for the eight companies of the group under business rescue, told the committee that the sheer number of companies under the large group of mining operations made it difficult to hold board, staff and creditor meetings within 10 days, in line with business rescue requirements.

“In terms of the business rescue process, we are bound by chapter six that within 10 days we must have staff meetings and creditor meetings. But we are dealing with eight entities that are going into business rescue at the same time,” said Klopper.

Klopper said the mining operating companies are a distance apart from each other and practitioners need to address this with urgency. He said the practitioners managed to hold the meetings within 10 days, avoiding a case where the process was nullified and the companies could not continue to pursue business rescue.

Klopper said the mining group’s relationship with the Bank of Baroda presented challenges that affected the ability to facilitate business transactions, in turn presenting a risk of employees and creditors being left in the lurch.

“The relationship with the Bank of Baroda was not conducive for good business. They were not a transactional bank and created a difficult situation with which to work, leading to a number of knock-on problems in the payment of salaries,” he said.

Klopper said the business rescue practitioners are meeting other banks in the country to facilitate transactional banking for the companies. Klopper said it is still possible to rescue the businesses, but warned that if they do not have banking facilities by the end of March, the companies and their jobs are as good as gone.

Optimum and Koornfontein alone employ 1 470 people.


ZAR/USD
17.03
(+0.31)
ZAR/GBP
21.88
(-0.22)
ZAR/EUR
19.89
(+0.06)
ZAR/AUD
12.06
(-0.11)
ZAR/JPY
0.16
(+0.27)
Gold
1881.63
(+1.06)
Silver
23.67
(+3.12)
Platinum
880.00
(+3.52)
Brent Crude
42.29
(0.00)
Palladium
2267.50
(+1.91)
All Share
54718.80
(+2.11)
Top 40
50578.66
(+2.08)
Financial 15
9932.20
(+5.65)
Industrial 25
73991.07
(+1.43)
Resource 10
54366.26
(+1.71)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 1379 votes
It depends on how the funds are used.
73% - 8924 votes
No. We should have gotten the loan elsewhere.
16% - 1977 votes
Vote