StateCapatureInquiry | With the cost of coal production exceeding the price that Eskom was paying for it three times over, Glencore was forced to sell to Gupta-owned Tegeta Exploration and Resources.
Marsden told the commission that when he started, he found that the mine was supplying coal to Eskom at R150 per ton delivered ; but it cost R430 to R450 per ton to produce. The mine was relying on its major shareholder, Optimum Coal Holdings, for funds to bridge the gap.
Marsden said one of the first things they did was attempt to engage Eskom on a number of issues, including the arrangement of an interim coal supply agreement and, thereafter, a long-term solution that"would have resulted in a more sustainable business for the mine". "One of the key features of business rescue is the ability to suspend obligations in the contract. We elected to use that mechanism on Eskom and we effectively suspended the coal supply agreement which obliged us to supply coal at that rate to Eskom ... in order to create some urgency and get the attention of Eskom. It also sought to illustrate that we did not have an open cheque book.
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