Kalagadi’s Mashile-Nkosi lays into IDC

[miningmx.com] – DAPHNE Mashile-Nkosi, chairperson of Kalagadi Manganese, has heavily criticised the Industrial Development Corporation (IDC) saying it had “behaved like a loan shark” and working with the bank was “a nightmare”.

The IDC is a 10% shareholder in Kalagadi Manganese which has built a 3 million tonnes a year (mpta) manganese mine and a 3.7mtpa sinter plant. Mashile-Nkosi’s company borrowed R1.1bn from the IDC and has to repay R1.8bn after interest – terms she described as not in keeping with a development bank.

“You can’t have a development funding institution behaving like a loan shark,” Mashile-Nkosi said in Miningmx‘s Mining Yearbook 2014 which will be published with the Financial Mail on June 20.

The IDC responded by saying the terms of the loan were in keeping with the risk of the project. “The IDC facilities were for a business in an early stage of development with uncertainties in place, and the IDC pricing reflects this,” said Mandla Mpangase, spokesman for the bank.

“It would be safe to say that without IDC support the project would not have developed to the stage it is at today,” he added.

The IDC loan had been rolled over and there was a request to roll it again to September. There is also a request to convert the loan into an 11-year term loan with a review of the commercial terms.

“It cannot continue in the current state. It will kill us,” Mashile-Nkosi said. “The model is wrong. The IDC must be an institution that doesn’t strive to make money. They must break even, they must pay their costs,” she said.

“If the government is serious about industrialisation and job creation, they should support the IDC, they should penalise the IDC for making money,” she added. “Of all the fights I’ve had, with ArcelorMittal, the IDC has been the worst nightmare for me.”

ArcelorMittal is selling its 50% stake in Kalagadi Manganse for about R3.9bn following litigation around the the ownership of a mining licence for the mine. The steelmaker said Mashile-Nkosi had been less than clear about the licence – an allegation that she refuted in court papers.