The venture would be between Orchid Mining, a unit of DSA, and Nehawu Investment Holdings
Dubai’s DSA Investments is considering forming a venture with a South African labour union to bid for coal assets that Glencore was pressured into selling to a company controlled by the politically-connected Gupta family in 2015.
The venture would be between Orchid Mining, a unit of DSA, and Nehawu Investment Holdings, which invests funds on behalf of the National Education, Health and Allied Workers’ Union, the person said, asking not to be identified because the talks haven’t been publicly announced.
The proposed venture could target the coal assets of Tegeta Exploration & Resources (Pty) Ltd. after the company was placed under administration last year, the person said.
“Our investment focus is extractive resources investment opportunities in Africa,” the company said in a response to queries. “Once we are able to comment on specific opportunities we will provide an official release.”
Tegeta, which was owned by the Gupta family and a son of former South African President Jacob Zuma, became embroiled in controversy because of corruption allegations around its supply contracts with power utility Eskom Holdings SOC Ltd. Its assets include the Optimum coal mine, the Koornfontein colliery and a share in Richards Bay Coal Terminal, which allows it to export the fuel. Port access for coal producers in South Africa is a prized asset.
In 2015, the then mining minister, Mosebenzi Zwane, flew to Switzerland to meet with Glencore’s chief executive officer, Ivan Glasenberg, to convince him to sell the assets to the Guptas.
The labour union acknowledged but didn’t respond to repeated requests for comment.
Project Halo, a South African group, said in January it bid 3.05 billion rand ($216 million) for the assets. The sale did not proceed after legal disputes between Tegeta’s administrators and Oakbay Investments Ltd., the company owned by the Guptas that held their stake in Tegeta.
DSA says it manages assets worth more than $10 billion. Nehawu Investment has assets worth more than 3 billion rand, according to its website.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.