In yet another thought provoking piece, Investec’s Brian Kantor questions the motives behind the Competition Tribunal’s approval of the Gupta-owned Tegeta acquisition of the Optimum Coal mine that supplies Eskom.
The tribunal has given the deal the green light only if there are no merger-specific job losses. By making reference to the Walmart/Massmart merger, Kantor says that while saving jobs is important the public interest is in employment growth and a more productive labour force. And the current route makes for an inefficient, less competitive economy. As usual some great analysis. – Stuart Lowman
By Brian Kantor*
The controversy surrounding the purchase by Tegeta Exploration and Resources, a Gupta controlled company, of Optimum Coal Mine for R2.5bn from Glencore has been grabbing the headlines in the local media. Optimum Coal Mine supplies Eskom and enjoys a near 10% share of the Richards Bay coal export terminal.
Part of the controversy was about the alleged role of Mineral Resources Minister Mosebenzi Zwane.
According to a report in Business Day by Natasha Marrion on 23 February: “Mr Zwane said his only interest in the deal was to ensure that no jobs were lost under the new owner.”