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The South African Federation of Trade Unions (SAFTU) has noted with shock the revelation by former Mineral Resources Minister, Ngoako Ramatlhodi, that Eskom’s Chairman, Ben Ngubane, and recently reinstated Chief Executive, Brian Molefe, tried to get him to suspend the mining licenses in South Africa of the Swiss-based commodities company Glencore, in order to pave the way for the Gupta family to buy a company they owned.

Glencore had put Optimum Holdings Ltd, a South African coal mining company which they owned, into business rescue after Molefe had refused to renegotiate the price of their long-term contract to supply coal to Eskom and had reinstated a contested penalty of R2.17 billion owed by Glencore for supplying sub-standard coal to the Hendrina Power Station.

Eskom tried to issue a legal summons to enforce payment of the penalty but Glencore claimed that the Hendrina contract was losing R100 million a month and its business rescue practitioners successfully argued that they could not impose new claims for penalties when a company is in business rescue.

Ramathlodi claims that he was then called to a meeting with Ngubane and Molefe at which they asked him to suspend all Glencore's mining licenses until the company had paid the R2.17m penalty.

This was at a time when Eskom was load-shedding so that suspending Glencore’s licenses would have brought their 14 coal operations - 14% of Eskom’s coal, needs - to a standstill and risked the jobs of 35 000 workers. Ramathlodi refused to comply, saying “I am not going to shut the mines”.

Ngubane allegedly then told Ramathlodi that he would report this to President Zuma, who needed to know the outcome before an international trip to China and Russia. Soon after his return he shifted Ramathlodi to the Ministry of Public Service and Administration and replaced him with Mosebenzi Zwane. Ramathlodi was later sacked in the recent reshuffle in which the Finance Minister and his Deputy were also fired.

Glencore tried to fight Eskom’s demand by offering to take Optimum out of business rescue and would settle the outstanding debts but needed more time and fund its losses until 2018 when the contract ended. But this message was not received, and the Glencore official involved was ordered to fly to Switzerland.

At the same time the new Minister Zwane board a flight to Dubai and then also flew to Switzerland to meet the head of Gencore and Rajesh Gupta. It is unprecedented and outrageous for a minister to get embroiled in a commercial deal.

A few days later Finance Minister Nhlanhla Nene was replaced by Desmond van Rooyen, only to be then replaced by Pravin Gordhan a few days later.

But on that very day Glencore business rescue practitioners announced that a Gupta company had bought Optimum Coal Holdings for @2.1 billion.

Combined with all the other damning evidence in the State of Capture report, including Molefe’s calls and visits to the Guptas, these latest revelations demonstrates dramatically how deep the rot of corruption has seeped into South African society.

It shows the extent to which President Zuma, other ministers, officials in state-owned enterprises and their cronies in the Gupta family have indulged in an orgy of looting of public resources and self-enrichment though the manipulation of tenders in both the state and state-owner enterprises.

At a time when millions are unemployed, poverty is widespread and we are the most unequal society in the world, billions are rands are being embezzled by ruthless private companies and greedy political leaders. It has led to political paralysis and an already sick economy being relegated to ‘junk’. It has also led to a deep split within the ruing ANC and the mergence of two factions.

SAFTU however refuses to defend either faction, the corrupt looters or the mainstream white monopoly capitalists who are all fighting each other for control of the state and government for their own selfish class interests and not  those of the working class and poor majority which they both exploit.

SAFTU reiterates its demand for the removal of the entire Eskom Board and the Cabinet, who are responsible for this corrupt deal with the Guptas, but does not believe it possible to resolve this crisis of corruption within the inherently capitalist system.

In the medium to long-tern, the only way out of the crisis has to be through a mass movement of the working-class based on a program guided by the principles of Marxism-Leninism for the nationalisation of the mineral and manufacturing monopolies, the banks and the land, in line with the aspiration expressed in the Freedom Charter.

Issued by SAFTU