23/02/2018 07:04 SAST | Updated 23/02/2018 12:02 SAST

Guptas' Optimum Under Business Rescue Placing Coal Supply Under Threat

The Guptas' mining company exclusively supplies two major power plants.

The Guptas' Optimum Coal Mine in Mpumalanga is being placed under business rescue, jeopardising the jobs of thousands of workers and threatening its supply to Eskom.

According to Eyewitness News (EWN), another mining company, Derko Mining and Exploration filed papers in the high court in Pretoria on Thursday seeking to have Optimum placed under business rescue. The mine reportedly owes its creditors, including Derko, R60 million.

On Thursday, Optimum mine CEO George van der Merwe told reporters that the mine would not be able to pay its workers this month, although management was trying to make arrangements to avoid this.

Workers downed tools this week, demanding certainty over the mine's future.

Optimum now has five days to oppose the matter.

Eskom confirmed that business rescue proceedings had begun on Thursday, according to eNCA. The power utility said Optimum had not met its supply obligations to Eskom and said the mine would have to pay a fine.

According to amaBhungane Centre for Investigative Journalism, company records also confirm that the mine is under business rescue. Optimum consists of the mine which supplies the Hendrina power station, Koornfontein mine which supplies the Komati power station, and a six-million-ton coal export allocation at the Richard's Bay coal terminal.

The Gupta's plan to sell these assets to a Swiss company for R2.9 billion. Both mines are reportedly the only suppliers to the Komati and Hendrina power stations.

Koornfontein reportedly wants to cut about 38% of its workforce, which amaBhungane reports will mean Komati will have to source additional suppliers.