Former Glencore CEO Clinton Ephron has told the Zondo commission that he was devastated when former Eskom CEO Brian Molefe told him Eskom would not be updating the company’s contract with the power supplier.
Former Glencore chief executive Clinton Ephron has told the Zondo commission into state capture that he was devastated when former Eskom CEO Brian Molefe told him Eskom would not be updating the company’s contract with the power supplier.
Glencore purchased Optimum Coal Holdings in 2011, which includes Optimum and Koornfontein mines as well as a “generous” allocation at the Richards Bay Coal Terminal. This allows the effortless export of large amounts of high-quality coal mined at Optimum by the owner of Optimum Coal Holdings. But within two years, the mine was bleeding Glencore dry. Glencore was forced to give the mine a R420m cash injection, over and above other measures undertaken to generate cash to keep it afloat.
By early 2015, Glencore was deep into negotiations with Eskom to add a fourth addendum to the original Coal Supply Agreement, which would relax conditions for Glencore-owned Optimum through clauses in the contract that allowed the supplier to declare financial hardship. "There was no contact with Mr Molefe between the time of late April 2015, when [the proposed fourth addendum] was taken to the board and the 18th of May 2015,” Ephron told the commission. “After numerous attempts, I finally managed to arrange a meeting with Mr Molefe at Eskom’s offices.”“[Molefe] said to me that Eskom would not be amending the terms of the CSA and that it would continue to enforce its rights in terms of the contract.
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