He is under the spotlight at the state capture inquiry because his sin was standing up to bullying by white-owned coal suppliers to Eskom.
This is the testimony of former Eskom CEO Brian Molefe, who appeared at the Zondo commission hearing in Braamfontein on Tuesday.
Upon being quizzed about why Eskom dumped Glencore-owned Optimum Coal Mine and Exxaro in favour of Gupta-owned Tegeta, Molefe said that the two companies — which had 40-year contracts with the power utility — had been strong-arming the SOE with impunity, and he had stopped them.
Molefe said that he, unlike those Eskom CEOs who came before him, was not scared of white people. This was why he was determined to stop Optimum and Exxaro in their tracks, as the two companies were white-owned.
“Why buy coal for R500 when you can get it for R450? There is a man in Newcastle who asked minister Bheki Cele the other day: nibasabani abelungu (why are you scared of white people)?” said Molefe.
Molefe was questioned as to why Eskom terminated a coal supply contract with Exxaro in December 2015, only for it to be given to Tegeta.
I refused to be bullied into acting against the interests of Eskom. They sold the mine to the Guptas on their own accord.
— Former Eskom CEO Brian Molefe
According to the commission, Exxaro had been supplying coal to Eskom at more than R600 per ton. But Molefe told the commission that the company was demanding a price hike to R1,300 per ton if its contract was to be renewed in 2016.
Furthermore, added Molefe, Exxaro wanted Eskom to buy a piece of land for it to start a new coal mine.
Eskom, under his stewardship, he said, refused to bow to these “unreasonable” demands.
Molefe said the coal supply to Eskom by “cost-plus mines” was daylight robbery, which was designed to bankrupt Eskom. He said he was determined to stop this during his time at Megawatt Park.
Cost-plus mines, he explained, was phenomenon of coal mines, such as Optimum, that were funded by Eskom to mine and supply coal to the power utility. According to Molefe, this business practice was bogus and detrimental to Eskom.
“It is like when you want bread. You fund someone to start a bakery which will produce the bread that they will supply to you,” he said.
Molefe said Eskom needed to disabuse itself of evergreen contracts of a “few white-owned companies who control coal supply to squeeze Eskom”.
If it were up to him, Molefe said, the coal supply space would be opened up to many black-owned small and medium enterprises to create competition and ease Eskom’s financial burden.
As for Optimum, Molefe said no-one pressed it to sell to the Guptas, as his only issue was opposing its request to up coal prices from R150 to R440 per ton.
“I refused to be bullied into acting against the interests of Eskom. They sold the mine to the Guptas on their own accord,” said Molefe.
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