Did Ramaphosa benefit from Eskom coal deals?

Mining company Glencore and the Presidency on Saturday moved to dispel claims that Deputy President Cyril Ramaphosa may have benefited from Eskom’s coal buying deals.

”Glencore refers to the various statements attributed to Mr Ted Blom published in Fin24.com on 24 April 2015 regarding certain supply contracts concluded between the Glencore Group and Eskom,” a Glencore statement said.

”The statements are entirely incorrect. Mr Cyril Ramaphosa no longer has any interest in any Glencore Group companies.”

The Glencore Group had three contracts with Eskom through companies in which Ramaphosa previously had an interest.

They were:

  • a contract between Optimum Coal and Eskom which was concluded in 1993, prior to Optimum Coal being acquired by the Glencore Group;
  • a contract between Umcebo Coal and Eskom which was concluded in 2010, prior to Umcebo Coal being acquired by the Glencore Group; and
  • a contract between Shanduka Coal and Eskom which was concluded in 2012.

”The Shanduka Coal contract was concluded after extensive arm’s length negotiations with Eskom and is priced at entirely market related terms.

“No preferential treatment has ever been afforded to Shanduka Coal or any other Glencore Group company in its negotiations with Eskom.”

The company said that none of the contracts between the Glencore Group and Eskom provide for the supply of export-grade coal to Eskom, nor had the Glencore Group ever offered to supply export-grade coal to Eskom.

”Each of the contracts provides for the supply of coal specifically tailored to meet the needs of the relevant power station at commensurate prices.”

The company welcomed discussion on the subject of the supply of coal to Eskom, but said “such discussions should be based on facts as opposed to misinformation and conjecture”.

The statement came after energy analyst Ted Blom told the Cape Town Press Club on Friday that one of the biggest beneficiaries of the 51% black ownership requirement – above and beyond the mining charter requirement of 26% – was Ramaphosa’s company, Shanduka.

He claimed that the BEE suppliers to Eskom “are earning more than double the profits” that the other suppliers are earning “with zero value added”, noting that the Minister of Public Enterprises Lynne Brown had not divulged the quantum or the price of the BEE coal supplies to Eskom.

He also claimed that long-term contractors supply Eskom with coal for their coal-fired power plants at R200 a tonne and BEE complaint suppliers are believed to be at R460 or so a tonne “plus R200 a tonne transport costs”.

Blom said it was not known what price Shanduka was getting, but he assumed as a BEE compliant company “it shares in this preferential treatment”.

Ramaphosa’s office said the deputy president ”took exception” to Blom’s statements that Ramaphosa had benefited improperly from an Eskom coal contract.

“It is a matter of public record that the Deputy President has divested of his interest in Shanduka Group and no longer holds any mining interests,” a statement from Ramaphosa’s office said.

”The deputy president undertook this divestment following his appointment to the position of deputy president of the Republic to avoid any potential for conflict of interest.”

Comment from Blom was not immediately available.

In February 2013, City Press reported that Ramaphosa was reviewing his business interests, which included stakes in mining, property and energy companies; McDonald’s restaurants; financial services firms; and an interest in mobile telephone network operator, MTN.

All these investments were in his Shanduka Group.

At that time he had already stepped down from the boards of Mondi and Lonmin.

He started resigning from directorship and reviewing his business interests after he was elected deputy president of the African National Congress.

On November 26 last year, the Presidency said Ramaphosa’s business interests had been placed in a trust in line with the executive ethics code.

Source: News24

More on Eskom

Eskom scrapped a tender that would have saved R1 billion

Eskom’s BEE suppliers score massive profits: analyst

Latest news

Partner Content

Show comments

Recommended

Share this article
Did Ramaphosa benefit from Eskom coal deals?