Photo by: Duane Daws
The Competition Tribunal on Monday approved the controversial merger between Tegeta Exploration and Resources, whose shareholders include President Jacob Zuma’s son and the Gupta family, and Optimum Coal Mine.
Tegeta agreed to buy Optimum for R2.15-billion in December 2015 after Glencore had placed the mine under administration because it said it couldn’t make a profit because of the terms of a coal supply deal with Eskom.
According to a Bloomberg report, Tegeta is 64% owned by by Mabengela Investments, which in turn is 45% owned by Duduzane Zuma. Tegeta is a joint venture between the latter and the Guptas’ Oakbay Investments.
The merger was approved with a condition that prohibited “merger specific retrenchments” and imposed a set of “monitoring conditions” on the parties.
Aside from employment concerns, the Commission found that the merger was unlikely to lessen competition in the market “as they were relatively small players when compared with rivals such as Anglo American and Exxaro Coal”.
Tegeta will supply coal to three Eskom power plants: Hendrina, Komati and Majuba.