Guptas' Optimum Coal Risks Suspension as Workers Protest

(Bloomberg) -- South Africa’s Optimum Coal mine, linked to the politically connected Gupta family, will be suspended if managers fail to comply with the site’s social and labor plan. Workers protested Wednesday over the uncertainty at the operations.

The Department of Mineral Resources conducted an inspection on Feb. 8 and Optimum Coal must take measures to reach compliance within 60 days of a pending order, the ministry said by email. The National Union of Mineworkers said it went on strike because key questions have yet to be answered at the mine.

“What our members want to know is are they going to sell the mine or not,” said Livhuwani Mammburu, a spokesman for the union. “They also want to know if they’re going to be paid this coming Friday.”

Gupta-controlled Oakbay Investments and Duduzane Zuma, the former president’s son, bought Optimum through Tegeta Exploration & Resources for 2.15 billion rand ($183 million) from Glencore Plc in December 2015. 

Oakbay didn’t immediately reply to a request for comment. The Gupta family has been accused of using its friendship with Zuma to secure state favors. Both parties have denied wrongdoing.

Reports that the Gupta brothers have left the country, including sibling Ajay being declared a fugitive, have raised anxiety of workers at Optimum, where NUM is the majority labor group, Mammburu said. “Our members were asking a lot of difficult questions about the future of the mine.”

Oakbay said in August that it agreed to sell Tegeta for 2.97 billion rand to Swiss company Charles King SA. The disposal, which includes the Optimum and Koornfontein mines and a stake in Africa’s biggest coal-export terminal, was expected to be concluded in 12 months, Oakbay said at the time.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net.

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Amanda Jordan, John Bowker

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