Former Glencore CEO, Clinton Ephron, on Wednesday put the blame squarely at the feet of former Eskom CEO Brian Molefe over how the Optimum Coal Mine was wrestled out of the global coal miner's hands and handed over to the Gupta family.

This was after Optimum Coal Mine, which supplied coal to Eskom's Hendrina power station in Mpumalanga, had tried invoking the hardship clause after experiencing difficulties in providing coal in accordance with the coal supply agreement (CSA) with Eskom. 

Glencore, which had acquired Optimum Coal Mine from BHP Billiton, was citing a loss of R166.40 per ton on coal supplied to Eskom, or approximately R120-million per month.

The company wanted terms of the fixed-price CSA renegotiated so that it could make a profit, but instead Eskom hit Glencore with hefty penalties after demanding a refund on 16.5-million tonnes of coal it had bought and allegedly did not use from Optimum.

Ephron said that Glencore sought meetings with Eskom to negotiate new terms for the CSA, a fourth addendum into the contract, which set out to amend the price and quality specifications of coal delivered by Optimum Coal Mine.

He said that Molefe had categorically refused to renegotiate an existing CSA with Glencore, without any valid reasons, after he took the reigns at Eskom in April 2015 following his secondment from Transnet.

Ephron said that after writing to Eskom in May 2015, Glencore was informed a few weeks later that Eskom was not willing to negotiate and the contract must continue in full force at its current form.

He said that despite other addenda having being approved in previous years in 2011 and in 2013, respectively, negotiations for this fourth addendum were protracted until 2015 when Eskom's board tender committee referred it to Molefe, who promptly rejected it. 

"We had a meeting with Eskom at Megawatt Park. Ivan Glasenberg and Brian Molefe were both present. We wanted Eskom to fulfill its obligations under the CSA, and further terms under the fourth addendum. I don't know why Brian Molefe declined. He he told us that the amendments to the new CSA would not be effected," Ephron said. 

"It was a stonewall negotiation. It wasn't a discussion. It was a position. We did ask people at Eskom and they were as perplexed as we were. My understanding was that at the board meeting Molefe was agreed he would take charge of discussions with Glencore."

Molefe formally terminated the settlement process between Eskom and Optimum on 10 June 2015, leaving the coal mine in limbo as shareholders pulled out and the mine was put under business rescue. 

In 2016, the Gupta family's Tegeta Resources bought Optimum Coal Mine from Glencore for R2.15-billion after Eskom extended a questionable R586-million prepayment for coal.  That was exactly the same amount Tegeta was short to complete its purchase the coal mine.