Glencore spills the Gupta, Zwane, Molefe, Koko beans. A must read.

LONDON — The ugly truth emerged about how the Guptas and their allies at Eskom and in Jacob Zuma’s cabinet strong-armed international mining house Glencore to sell a major South African coal mine. In his marathon testimony to the Zondo Commission yesterday, Glencore’s former SA CEO Clinton Ephron provided details of how former Eskom CEO Brian Molefe and Zuma’s mining minister Mosebenzi Zwane acted for the Gupta brothers to force Glencore to sell the Optimum mine. It emerged that Zwane personally arranged a meeting in Zurich with Glencore CEO Ivan Glasenberg to negotiate the sale of the mine to the Guptas. This is the first time that anyone from Glencore has spoken publicly about the event. Ephron also implicated Molefe’s successor Matshela Koko, bureaucrat Joel Raphela and Gupta bagman Salim Essa in the dirty dealings. Here’s the Bloomberg report – Alec Hogg

By Paul Burkhardt and Nkululeko Ncana

(Bloomberg) – South Africa’s state-owned power utility refused to renegotiate a coal deal with a mine owned by Glencore Plc’s local unit and tried to penalise it for supplying sub-standard fuel, resulting in the operation being placed in bankruptcy protection and being sold, a former head of the business said.

The Optimum coal mine supplied Eskom Holdings SOC Ltd.’s Hendrina power plant and was placed under a local form of bankruptcy protection known as business rescue while owned by Glencore in August 2015. The operation was losing money because the power producer was paying a fixed price for the fuel, but the cost of mining it was rising more quickly than inflation, said Clinton Ephron, the former chief executive officer of Glencore’s local operation.

The only possible way to have saved the business would be to renegotiate the contract, he said. But when Ephron and Glencore CEO Ivan Glasenberg met then-Eskom CEO Brian Molefe about the contract, he said the electricity producer “was not willing to negotiate,” Ephron told a judicial panel probing corruption particularly during Jacob Zuma’s presidency. “It was a stonewall negotiation. It wasn’t a discussion, it was a position.”

In 2015, Glencore was pressured by former Mineral Resources Minister Mosebenzi Zwane into selling the Optimum coal complex to a company part-owned by members of the Gupta family, who were friends with Zuma, for R2.15bn ($155m). Allegations of corruption against the Guptas helped bring down his presidency. The Guptas, Zuma and Zwane deny any wrongdoing.

Glencore was “suspicious” of the actions of outside parties who forced it to sell Optimum to the Guptas, Ephron said.

The Guptas have left the country, while Optimum has been placed under administration and is in the process of being sold.

A 2016 report by the Public Protector’s office, which was led by Thuli Madonsela and ordered the set-up of the judicial commission of inquiry, found that Eskom’s conduct relating to Optimum “was solely to the benefit of Tegeta,” which belonged to the Guptas.

“We were shocked by what came out subsequently in the Public Protector’s report,” Ephron said, adding that it then became“quite easy for us to connect the dots.”

Nedbank Ltd., South Africa’s fourth-largest bank, estimates that corruption, maladministration and bad policies shaved R470bn ($33.9bn) off the nation’s gross domestic product between the start of Zuma’s second term in May 2014 and February last year, when the ruling African National Congress forced him to step down to stem a loss of support.