Glencore wanted to bankrupt Eskom, Molefe tells Zondo commission

Glencore wanted to bankrupt Eskom, Molefe tells Zondo commission

Former Eskom CEO, Brian Molefe has defended his position in rejecting a coal price increase by Optimum Coal Mine (OCM) in 2015.

Molefe today

Molefe returned to the commission on Tuesday.


OCM signed a 25-year contract with the power utility to supply coal at R150 per ton until 2018.


However, its parent company, Glencore, requested a price increase of R530 per ton in May 2015.


Molefe said the coal supply company was facing a financial crisis due to the international price of coal at the time.


He said this was not Eskom's problem as OCM had decided on its own to export coal when the initial plan was for it to only supply coal to the power utility.


"OCM's hardship was self-imposed,” he said.


“I asked myself how these people whose parenting company is listed in Switzerland, who are operating a global leader in the coal industry, how they could take such simplistic decisions. They had speculated on the price of coal and now expected us to pay for it,” he said in his testimony.


"They went on about Optimum and not Eskom - my fiduciary duty was to Eskom. I had no responsibility to keep Optimum out of bankruptcy and get Eskom bankrupt in the process. Had you been in my position you may have appreciated that if we did what Glencore was saying we should do we would have bankrupted Eskom. They thought that is okay because they thought Eskom would be subsidised by the government," said Molefe


He told the commission that Glencore CEO, Ivan Glasenberg threatened him and said Optimum would stop supplying Eskom with coal.

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On the Guptas


He said Glencore had thought it would be able to get the new price of R530 per ton of coal due to its ties with President Cyril Ramaphosa, who was deputy President at the time.


Glencore announced it was selling Optimum Coal Mine to Gupta-owned Tegeta.


Molefe said this came out of nowhere as Glesenberg had informed him they would go back to the original agreement of R150 per ton of coal.


"They threw a curveball saying they are selling the mine to the Guptas. That was a masterstroke because they were so angry with us and we're now going to start at the campaign to taint us as Gupta people, and all of a sudden there was a report by the Public Protector and we were not interviewed. A media campaign of note ensued to rubbish us as people who are controlled by the Guptas," he said.

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