Mining company Glencore has rejected allegations from former Eskom boss, Brian Molefe, at the Commission of Inquiry into Allegations of State Capture that it used now President Cyril Ramaphosa’s political influence to deal with Eskom.
Molefe told the Zondo commission on Friday that Glencore did not do a “due diligence” on Optimum Coal Mining before buying it. He alleged that Glencore roped in the President as chairperson to exert political pressure on Eskom bosses for its own benefit.
He said that Ramaphosa’s actions were “revolting”, because he was aware that he was being used for his political influence. Molefe added that Ramaphosa bought 9.6% of the shares from Glencore and immediately became chairperson of Optimum, because he was their “best bet”.
Glencore rejects allegations
A spokesperson for Glencore said in reaction that the company rejects the allegations and pointed out that Ramaphosa, who was Glencore’s long-standing BEE partner, partnered with Glencore in 2011 and 2012 to acquire an interest in Optimum.
“President Ramaphosa exited his stake in Optimum in May 2014 before his appointment as deputy president.”
Glencore at commission
Clinton Ephron, CEO of Glencore’s coal business in South Africa and director of Optimum Coal Mine Proprietary Limited (OCM) and Optimum Coal Holdings Proprietary Limited (OCH) from 2013 to 2017, explained in his statement to the commission in 2019 what happened.
In his statement he said that Piruto BV, an entity within the Glencore group and Lexshell 849 Proprietary Limited, an entity then owned by Ramaphosa, acquired OCH through a series of transactions in the period June 2011 to March 2012.
This resulted in Piruto BV (Glencore) holding a 67.58% effective interest in OCH and Lexshell holding 9.64%.
Ephron went on to explain that before it acquired its interest in OCH, Glencore was unable to undertake a comprehensive due diligence exercise.
“In particular, Glencore only had publicly available information regarding the CSA and accordingly it only knew the duration, volume to be supplied and price per tonne provided by the CSA. Glencore did not, for example, know how any price-adjustment mechanisms in the CSA worked.”