The business rescue plan for Optimum Coal Holdings was approved on Friday after the majority of creditors adopted the plan at a meeting of affected parties in Johannesburg.

Joint business rescue practitioners Piers Marsden and Peter van den Steen said the plan was binding on all parties and that its implementation would now begin.

“All conditions for the Tegeta Exploration and Resources (Pty) Ltd transaction have been fulfilled and once the purchase price is paid, the deal will conclude,” they said in a statement.

In December it was announced that Tegeta had concluded a conditional R2.15-billion transaction to buy all the assets of Optimum Holdings, which Glencore placed into business rescue in August last year.

The announcement raised concerns, owing to Tegeta’s association with Oakbay, which itself was linked to the Gupta family and President Jacob Zuma’s son, Duduzane Zuma.

In addition, Glencore’s decision to place Optimum into business rescue followed a high-profile spat with Eskom, which had insisted that the coal mine continue to honour its R150/t supply agreement to the Hendrina power station until 2018, despite Glencore’s argument that the contract was onerous.

In addition, the State-owned electricity utility imposed penalties of R2-billion on Optimum for failing to supply the stipulated quality of coal to Hendrina.

Adding to the controversy was the revelation, earlier this year, that South Africa’s Mineral Resources Minister Mosebenzi Zwane had travelled with a delegation of Tegeta executives to visit Glencore in Switzerland to negotiate the purchase of Optimum Colliery.

However, on Friday, JSE-listed Oakbay announced that its nonexecutive chairperson, Atul Gupta, and its CEO, Varun Gupta, had resigned with immediate effect. Additionally, Duduzane Zuma resigned as a nonexecutive director of Shiva Uranium, a major subsidiary of the company.

“This decision follows a sustained political attack on the company, and the concern that the jobs and livelihoods of nearly 1 000 employees would be at immediate risk as a result of the outgoing director’s association with the company. Accordingly, the outgoing directors are of the view that it would be in the best interests of the company, its shareholders and employees for them to step down with immediate effect,” Oakbay said in a statement.

It had been reported previously that the Optimum business rescue plan covered the Optimum coal mine, the Optimum coal terminal and Koornfontein Mines. Koornfontein Mines was not in business rescue, but had a contract with Eskom to supply coal to the Komati power station, until the end of 2015.

Eskom told Engineering News Online previously that it had insisted on three conditions when approached by the business rescue practitioners: the price could not change, the R2-billion in penalties still applied and there could be no discussions about coal supply to Hendrina beyond 2018.

However, Optimum was awarded part of an interim supply contract arising following Eskom’s decision to terminate a 40-year cost-plus coal supply contract with Exxaro’s Arnot mine, arguing that volumes were falling, while costs were surging to unsustainable levels.

Prices vary under the interim supply arrangement, with the Anglo-Exxaro Mafube colliery supplying coal by road at R182/t and by conveyor at R132/t. The other contracts range from R406/t through to R523/t, with Eskom reporting that the contract for Optimum was settled at R406/t. Optimum supplied about 15% of the coal delivered to Arnot in January.

Eskom was expected to award a longer-term contract for replacement coal at Arnot in the not-too-distant future.