[miningmx.com] – THE legal dispute between Kalahari Minerals and
ArcelorMittal kicked up another notch on Wednesday after the South African company
served papers to the South Gauteng Court seeking enforcement of an earlier
judgement that the European steelmaker pay it R241.3m.
“We served the papers because ArcelorMittal should have paid up last Tuesday [July
10],’ said Daphne Mashile-Nkosi, CEO of Kalahari Resources and Kalagadi Manganese,
a joint venture company in which ArcelorMittal and Kalahari Resources are both
invested.
Kalagadi Manganese has built a manganese mine and is nearing completion of a sinter
plant in South Africa’s Northern Cape. There were additional plans to build a ferro-
manganese smelter in Coega; a total investment of some R10.7bn.
However, ArcelorMittal put the skids under the smelter when it said last month it
wanted to withhold further capital contributions amid allegations of corporate
governance abuses. According to a report in Business Times at the weekend,
Kalahari Resources operates Kalagadi Manganese as if it were the only shareholder –
a claim that Mashile-Nkosi has refuted.
Kalahari Resources successfully challenged the withholding of capital – the R241.3m –
in court resulting in a judgement in which ArcelorMittal was asked to make the
payment. One of ArcelorMittal’s contentions, that the mining licence for the
manganese operations be produced in Kalagadi Manganese’s name, was complied with
during the court proceedings.
However, Business Times reported that ArcelorMittal was seeking leave to
appeal the South Gauteng Court decision, although the steelmaker also reiterated its
commitment to the project, deemed a flagship venture for the South African
government’s beneficiation strategy. ArcelorMittal asked that Kalahari Resources
appoint a joint CEO to Kalagadi Manganese.
Mashile-Nkosi told Miningmx on Wednesday she would be willing to sanction
such an appointment, but felt ArcelorMittal would simply apply for other imposts
because it was no longer interested in building the ferromanganese smelter. “Given
ArcelorMittal’s own backward integration strategy, we would become a competitor to
its own operations elsewhere,’ said Mashile-Nkosi.
It was for this reason that Kalahari Resources floated the idea in Business
Day on Wednesday of buying back the 50% stake ArcelorMittal owns in Kalagadi
Manganese – a notion she said had not been pursued as yet. “We haven’t spoken to
anyone about this yet,’ said Mashile-Nkosi. “But we feel that ArcelorMittal keeps
changing the goalposts in terms of what it wants from Kalahari Resources’.
ArcelorMittal has so far invested $430m in Kalagadi Manganese, equal to about
R3.6bn.
Regardless of whether ArcelorMittal is granted leave to appeal, the future funding of
the manganese mine and sinter plant, as well as a proposed ferro-manganese smelter
in Coega, has been thrown into doubt.
