Ngubane struggles to explain why Eskom prepaid R1.6bn for coal from Optimum

Ngubane has told the state capture commission that the pre-payment was intended to secure coal supply and lock prices from Optimum, which was going under, so that whoever bought it would be committed to that supply and prices.

FILE: A screengrab of former Eskom board chairperson Dr Ben Ngubane appearing at the state capture inquiry on 11 September 2020. Picture: SABC/YouTube

JOHANNESBURG - Former Eskom board chair Ben Ngubane has struggled to explain why Eskom decided to prepay R1.6 billion to pre-purchase coal from Optimum while the state-owned enterprise had decided to terminate its coal supply contract with the mine and why the board authorised executives to negotiate with Tegeta as proposed Optimum owners when they didn't own the mine yet.

Ngubane has told the state capture commission that the pre-payment was intended to secure coal supply and lock prices from Optimum, which was going under, so that whoever bought it would be committed to that supply and prices.

Ngubane earlier said that Optimum was supplying rubbish coal to Eskom and exporting its best quality overseas but it was arrogantly demanding that Eskom increase prices three-fold.

But he denies that "businessman", an email linked to Salim Essa, had issued instructions on what decisions the board should take.

"The putting of OCM into business rescue has created an emergency. Anything can happen if they go into liquidation, we might lose all our coal, the workers might lose their jobs. DMR has commented that the best approach is to pre-purchase the coal."

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