INTERNATIONAL COAL NEWS

Gupta-Eskom deal gets nod - 5th time 'lucky'

SOUTH African power utility Eskom went to "extraordinary lengths" to ensure the Gupta family scor...

Barry Avery

A report in Johannesburg’s Sunday Times stated the Gupta mine linked to the multi-billion rand deal had failed coal quality tests four times, before being awarded the lucrative deal on the fifth try.

Shortly after the deal was concluded, it was reported that four Eskom employees were suspended for questioning the quality of the coal.

The close relationship the wealthy Gupta family has with the ruling African National Congress party is continuously under scrutiny in South Africa’s media. Most recently, Deputy President Cyril Ramaphosa used a Gupta family jet to fly him to Japan on governmental business.

The Gupta’s mining company, Tegeta Exploration and Resources, had tried since 2011 to achieve an Eskom deal, but had always been rejected.

A test in March on the company’s coal found it to be “within specifications, but risky” – which resulted in a 10-year deal to supply the Majuba power station in Mpumalanga Province.

Two months after the Gupta-owned company started delivering coal, the supply was rejected due to poor quality.

On August 31, Eskom sent a letter of suspension to Tegeta – complaining about the sub-standard coal.

However, after voicing “great concern” in the suspension letter, the temporary ban on the Gupta’s coal was lifted five days later.

Four Eskom employees, with more than 50 years of experience, involved in the quality control process were suspended. Two laboratories which conducted the coal quality tests, SGS SA and Sibonsiwe Labs, were also suspended by Eskom.

The Sunday Times reported that Tegeta claimed Eskom staff had colluded with laboratory staff to state the coal was sub-standard to extort a bribe from the Guptas.

Eskom said Tegeta’s coal had subsequently been tested by the South African Bureau of Standards, and was found to be compliant.

Tegeta told the newspaper it operated “in line with corporate governance best practice”, but declined to comment on the issues surrounding its supply deal with Eskom.

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