Few businesses carry as much baggage as Optimum, the Mpumalanga colliery that became one of the most visible symbols of South Africa's Gupta-era state capture. Once owned by the resource giant Glencore before it was sold to the Gupta-linked Tegeta, the mine became shorthand for the close relationship between the notorious Gupta family and former president Jacob Zuma's administration. Today it is quietly shipping coal again.
Its new owner, Liberty Coal, has invested more than R3 billion to revive Optimum after years of legal battles, neglect and operational decline. Chief operating officer Peter Nordin says the company has already spent more than R3 billion rebuilding the operation, with about another R800 million budgeted for the rest of the year: close to R4 billion in total.
The machine that costs less to fix than to replace
The showpiece of the turnaround is a single digging machine. Liberty spent about R460 million refurbishing the Marion 8200, a figure that compares with roughly R2 billion to buy a new equivalent. The dragline is among the largest of its kind in the world, with a boom just over 100 metres long, and machines that size are no longer manufactured.
Liberty took ownership only after agreeing to a R460 million settlement with the National Prosecuting Authority, which had sought to forfeit the mine under anti-organised-crime law. The company is now headed by former Gupta associate Daniel McGowan.
Coal on ships to Asia
The revival is already earning foreign currency. Optimum is exporting between 400,000 and 500,000 tonnes of coal a month into markets including India, Singapore and Japan, and is preparing to restart its wash plant. The refurbished plant is expected initially to process between 250,000 and 300,000 tonnes a month, with commissioning due towards the end of August and full capacity targeted for October. Some 2,000 people are now employed on site, and coal trains continue to leave for the Richards Bay Coal Terminal.
There is more to come: Liberty hopes to restart its Boschmanspoort underground operation next year, refurbish two more draglines over the next five years, and lift output towards 1.5 million tonnes a month. For a mine that once stood for everything that went wrong, the ambition now is to be measured by how much coal it moves.
