Tegeta’s mines ‘riddled with non-compliance’

Optimum Coal Mine and the Shiva Uranium Mine, once owned by the Gupta family’s Tegeta, are guilty of operational non-compliance – breaking mining regulations and posing risks to workers.

This is according to a submission from the department of mineral resources to Parliament’s portfolio committee on mineral resources on Wednesday.

Optimum’s operations have been under business rescue and the National Union of Mineworkers has cast doubt on the business’ ability to pay salaries. The Bank of Baroda on Tuesday gave the South African Reserve Bank formal notice of its intention to exit South Africa. Its earlier attempts to exit left Optimum and other companies with no banking facilities, resulting in 19 Gupta-owned businesses seeking an urgent interdict to prevent the bank from leaving the country.

READ MORE: Bizarre battles in Gupta rescue

Ahead of his recent budget vote, Minister of Public Enterprises Pravin Gordhan told reporters that during a site visit to Optimum Coal Mine, he learned that conveyor belts had not been operating for months, all whilst Tegeta continued to get money from national power utility Eskom.

Chief inspector of mines at the department of mineral resources Mthokozisi Zondi told the committee that at an operational level, Tegeta mines failed to comply with mining regulations when it came to infrastructure and operational equipment.

“We did inspections on their infrastructure and equipment. There were instances of non-compliance. At the gold plant their steel work was extremely eroded. We issued them [a] Section 54 [instruction] to ensure that they install new steelwork,” said Zondi.

Zondi said the department stepped in to help fix a number of deficiencies and assist the mines after the instruction was issued by an inspector. He said the lack of checks on machines and equipment presented an occupational risk.

“Mobile machinery was not fitted with proximity detection systems, which prevent machinery from colliding with vehicles and people. They applied for an exemption, but it was not granted because of the risk posed to people and vehicles,” Zondi said.

He reminded the committee that in terms of mining laws, workers were entitled to refuse dangerous work, and that this was one area where the department expected workers and employees to be vigilant.

READ MORE: ‘How Eskom paid Tegeta to go treasure hunting for coal’

“Tower cranes used on plants were not maintained properly, and did not have tests conducted on the cranes. Pressure vessels were not routinely tested and maintained. They had to stop operation of equipment until non-compliance was fixed,” he said.

Mineral Resources director general Thabo Mokoena said the mines were largely viable as mining operations, but that getting them back to optimal function was a question of “getting the right management” and compliance with the law.

“If the old owners want to buy the mine back, they know full well that that is not possible, because of the business rescue process that is at hand. We have not gotten any indication that the current business rescue practitioners are unable to honour their payment commitments,” said Mokoena.

Tegeta’s profile includes Optimum Coal, two coal mines in Brakfontein and Koornfontein, and the Shiva Uranium Mine in Klerksdorp, North West Province. — Fin 24

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Khulekani Magubane
Khulekani Magubane

Khulekani Magubane is a senior financial reporter for Fin24. 

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