A high court in South Gauteng has ordered mining company ArcelorMittal SA to meet its obligations in terms of Kalagadi Manganese’s shareholders’ agreement.
According to the terms of the ruling handed down by Judge P Coppin, ArcelorMittal must pay R241.3 million ($29 million) to Kalagadi within 10 days. Furthermore, it must comply with its shareholder obligations and pay the costs of the court proceedings.
The South Gauteng High Court also ruled that ArcelorMittal is obliged to discharge its financial obligations in the future‚ pro-rata to its shareholding in Kalagadi Manganese.
The court’s ruling struck ArcelorMittal’s application to have Kalahari Resources placed under “business rescue” from the roll with costs.
While reacting to the High Court’s adjudication‚ the chairperson of Kalagadi, Daphne Mashile-Nkosi described the verdict as a significant step forward for the joint venture, and good news for the Northern Cape and Eastern Cape provinces which are two of the poorest regions in South Africa.
“It means the people of the Northern Cape will get their two-in-one project – the mine and the sinter plant – while the people of the Eastern Cape will get the smelter which will provide a major anchor project for the port of Coega‚” she said.
Formed in 2007 as a joint venture between Kalahari Resources (Pty) Ltd and the Industrial Development Corporation, Kalgadi is in the final stages of developing a 3 million tonnes-a-year manganese mine and sinter plant at Hotazel in Northern Cape Province.
In 2008, ArcelorMittal joined the joint venture when it acquired a 50 percent stake in the entity with Kalahari Resources holding 40 percent and the IDC retaining 10 percent.
In 2009, the three members of the Kalagadi joint venture agreed on a funding strategy which outlined each party’s equity funding obligations and how they will raise external debt funding in South Africa and on international markets. The agreement set equity element of the funding at 40 percent and the debt element at 60 percent.
In addition to the original plan of developing an ultra-long life manganese mine and sinter plant, Kalagadi Manganese will also develop a smelter at Coega in the Eastern Cape which from 2014 will produce high carbon ferromanganese at about 320 000 tonnes a year.
FIN24
