Guptas’ Optimum ‘could lose’ its licence after contractors shut Hendrina water supply

Picture: Sourced

The Gupta-owned Optimum coal mine in Mpumalanga could lose its mining licence if its water supply to the town of Hendrina is not restored, a mining law expert says.

Hendrina’s water reservoir is empty and the town and surrounding settlements have been without piped water for six days after contractors at the Pullens-hope water-purification plant at the Optimum colliery shut down the operation over nonpayment of contract fees and workers’ wages.

Tanker trucks were transporting water from Bethal (about 45km away) to fill plastic tanks supplied by the municipality and others, residents said.

Residents queue for hours to fill hand-held containers.

A nurse at a clinic in Hendrina said there was still no piped water and the clinic had to rely on tankers.

Optimum is required to operate the water desalination plant under its social and labour plan, which is a condition of its mining licence. Tegeta, a company owned by the Gupta holding company Oakbay Investments, bought Optimum in 2016 in a controversial deal involving a prepayment from Eskom for coal supplies.

Duduzane Zuma, son of former president Jacob Zuma, owns about R850m in shares in Oakbay, which in 2017 he said he was trying to sell.

Werksmans mining law expert Chris Stevens said on Monday that the Department of Mineral Resources could shut down the mine, but that the usual procedure was to issue an order to take rectifying steps, failing which the licence could be revoked.

This could have implications in reaching a potential sale agreement, but if such a sale amounted to a rescue of the business, the licence issues usually “came out in the wash”.

The Middelburg Observer, a regional paper in the Steve Tshwete district, reported at the weekend that Steve Tshwete Municipality’s mayor Mike Masina was in “crisis meetings” on Monday about the situation.

News24 reported earlier in February that about 70 contract workers had been laid off because they could no longer be paid, and that at least two contractors had applied to liquidate the mine over debt.

In one instance, a motion was stopped at the last minute after Optimum made an R11m payment. Optimum is also under licence obligation to pay for a new clinic in Hendrina, but the clinic remains closed over a payment default.

Optimum’s chief operating officer, George van der Merwe, could not be reached by the time of going to press.

Business Day reported on Monday that the Koornfontein colliery near Hendrina, also owned by Tegeta, had similarly violated its licence terms.

Aubrey Tshivhandekano, a regional manager in the mineral resources department, was about to serve a notice on the mine, but was handed a dismissal notice on instructions from minister Mosebenzi Zwane at the gates of the colliery before he could do so.

Source: Business Day