Billionaire comes to the rescue of two Gupta mines
Quinton van der Burgh has won a temporary contract to keep Optimum and Koornfontein afloat
Entrepreneur Quinton van der Burgh says he plans to have two of the crippled Gupta mines financially stable in two months and increase coal production within six months.
Van der Burgh has won a temporary contract to keep Optimum and Koornfontein mines afloat.
Through his business Burgh Group Holdings, the businessman and philanthropist will act as a technical advisor to the mines.Various Gupta businesses are struggling as banks shun them following allegations the family used ties to former president Jacob Zuma to win contracts. Optimum Coal and six other companies were placed in administration in February and were unable to operate because India’s Bank of Baroda, the last lender to have open accounts linked to the Guptas, was preparing to leave the country.Other parties offered financing, but Burgh “came without conditions”, Louis Klopper, a bankruptcy-proceedings manager at Coronado Consulting Group, said on Wednesday. Burgh is “an ideal partner” to provide technical expertise and banking facilities, he said, without disclosing financial terms.
Van der Burgh told Times Select his company had been able to step in at just the right time, after seeing the downfall of the two mines.“We’ve come in at a critical point. It was a risk for us to get involved but these mines are still two of the greatest and best coal assets in South Africa,” Van der Burgh said.
“Salvaging it comes down to management and that’s what we specialise in.”In 2016, Burgh Group Holdings was involved in an attempt to buy Optimum’s coal-mine export allocation — a stake in the Richards Bay Coal Terminal — from the Guptas, but the deal was abandoned last July.
Van der Burgh said his company had got involved again the moment they heard Optimum and Koornfontein were up for business rescue.Initially Burgh Group Holdings wanted to make an offer to buy the mines, but Van der Burgh said during negotiations they were not even allowed to make such offers.
He said the mines were in a dire state, which he believed was due to poor management and a lack of investment.
“The biggest problem at these mines is that they lacked investment. There was never any reinvestment; they just need fresh blood to get the mine tools up again. This is the month, if we didn’t step in now, there would be no mine,” he said.The agreement with Burgh had no connection to any acquisition, Klopper said. “The sale of these assets to this group is not on the table, it is not in negotiation,” he said.
Glencore is considering a bid for the Optimum mine, two people familiar with the matter said last month. South African miners Exxaro Resources and Seriti Resources have also said they would consider buying some of the Gupta coal assets.
Klopper said the bankruptcy managers were obligated to publish a business-rescue plan by April 23.
The management agreements are expected to last for a 12-month period, after which the business rescue practitioners expect the mines to be rehabilitated and fully operational.
Van der Burgh, who has 14 years’ experience in mining, said: “We’ve done great things in terms of mining. We’re entrepreneurs and so we see the opportunities and know what we can do. This is what we do for a living. These mines have been labeled the best in the country, the golden child, and we can turn it around,” he said.