THE Competition Tribunal has cleared the way for the Gupta-controlled Tegeta Exploration and Resources to acquire Optimum Coal, on condition there are no "merger-specific job losses".
The approval comes as the Treasury is reviewing all of power utility Eskom’s coal and diesel contracts.
The tribunal on Monday said job losses as a result of the multibillion-rand deal would be prohibited, and that it would provide written reasons for its approval later.
Tegeta is owned by the politically influential Gupta family and President Jacob Zuma’s son Duduzane.
The Competition Commission had recommended this month that the R2.15bn deal be approved, on condition there were no job cuts resulting from the merger. It also argued that the deal be monitored to ensure that no jobs were lost.
Last week, the tribunal had asked the commission and the two parties in the deal for clarity on the job-loss condition.
Tegeta and Optimum, which is owned by commodities conglomerate Glencore and was placed in business rescue last year, produce coal that they supply to Eskom.
"The tribunal also received further written submissions from Eskom and the draft business plan prepared by the business rescue practitioners," it said on Monday.
These were "confidential" but had not altered what was stated at the public hearings last week.
"The commission, employment concerns aside, found that the merger was unlikely to lessen competition in the market, as (Tegeta and Optimum) were relatively small players when compared with rivals such as Anglo American and Exxaro Coal," the tribunal said.
It was, however, concerned about job losses and recommended that conditions be imposed on the deal to prevent merger-specific job losses.
In 1993 Optimum entered into a coal supply contract with Eskom, which stipulated that it would sell the commodity to the utility at R150/tonne until 2018, while costs have risen to about R300/tonne.
However, when Optimum, which supplies coal to Eskom’s Hendrina power station in Mpumalanga, tried to renegotiate the onerous contract the utility not only refused but slapped the coal supplier with a R2bn penalty, citing the alleged poor quality of its product.
This forced the company to go into business rescue in August last year and the move coincided with then mineral resources minister Ngoako Ramatlhodi revoking the firm’s mining licence, which was quickly reinstated.
The sale caused a stir when it emerged that Mineral Resources Minister Mosebenzi Zwane accompanied Tegeta to Switzerland to negotiate the sale of the colliery with Glencore. Mr Zwane said his only interest in the deal was to ensure that no jobs were lost under the new owner.