Mantashe raises key questions on Gupta Optimum deal, Minister Zwane’s role

By Franz Wild

(Bloomberg) — One of South Africa’s most-senior ruling-party officials questioned the role of Mines Minister Mosebenzi Zwane in a deal between Glencore Plc and the Gupta family’s Tegeta Exploration & Resources (Pty) Ltd.

African National Congress Secretary-General Gwede Mantashe said he wanted more information on the deal, after Zwane met with Glencore Chief Executive Officer Ivan Glasenberg days before the deal was announced.

Mosebenzi Zwane, South Africa's Minister of Mineral Resources, speaks at a media briefing at the Investing in African Mining Inbaba in Cape Town, February 8, 2016. South Africa's government wants the black economic empowerment legal battle settled outside the courts, Zwane said on Monday, to end uncertainty over a policy meant to spread economic wealth to the black majority. REUTERS/Mike Hutchings
Mosebenzi Zwane, South Africa’s Minister of Mineral Resources.

“The involvement of the minister remains a big issue,” Mantashe said by phone Thursday. “We need to get more information on the deal.”

Glencore agreed to sell its Optimum coal complex to Tegeta for 2.15 billion rand ($138 million) in December, after the operation had gone into bankruptcy protection because it said it was locked into an unprofitable contract. Tegeta is controlled by the Gupta family, whom President Jacob Zuma describes as friends of his.

The Guptas are also in business with Zuma’s son, Duduzane, who received a stake in Tegeta three weeks before it bought Optimum, according to Tegeta’s share register.

In a Feb. 8 interview, Zwane said he met Glasenberg to “engage” with Tegeta to save jobs at Optimum. He denied favouring the Guptas. Zwane’s spokesman Martin Madlala on Thursday said he may comment later after reviewing Mantashe’s comments.

Oakbay Investments Ltd., a company owned by the Guptas, said Zwane didn’t influence the deal. “Minister Zwane was not party to our negotiations, nor did we consult with him on the negotiations,” Oakbay said in an e-mailed response to questions.

Peter Grauer, chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.