IDC will seek out of court settlement with Kalagadi provided “fundamental issues” addressed

TP Nchocho, CEO, Industrial Development Corporation

THE Industrial Development Corporation (IDC) wanted to resolve a dispute with Kalagadi Manganese out of court provided “fundamental issues” outlined by the state-owned insitution were addressed.

“We are looking all the time to Kalagadi as our client and exploring the outcome that we all want: a fully operational, fully productive mine without having to follow the path of litigation,” said TP Ncholo, CEO of the IDC.

Asked if this meant insisting of previous demands made by the IDC which have included the restructuring of Kalagadi’s management, Ncholo responded: “It really extends beyond what the IDC wants.

“The[y] are the kind of things we have stated before: improving the technical management of the mine, improving the management, and addressing the funding issues – this is what the business needs.

“The business still needs those fundamental issues to be attended to. Kalagadi is … a borrower of the IDC. We are talking to each other.”

In July, High Court Judge Brian Spilg upheld the IDC’s decision to withdraw from mediation proceedings with Kalahari Resources and Kgalagadi Alloys, shareholders in Kalagadi Manganese which claimed in court papers the bank had acted in bad faith.

“I am unable to find that there was bad faith mediation on the part of the IDC that can either in fact or in law be construed as culpable,” the judge ruled.

Ncholo confirmed the High Court found in favour of the IDC “… and so mediation was terminated. There is no resumption of mediation”. He added that the applications for business rescue were outstanding “… in the sense that they haven’t been set down for any court date”.

The IDC first launched an application in May last year to put Kalahari Manganese into business rescue claiming the company could neither repay nor service some R3bn in debt owed to it. A further R2.9bn was owed by Kalagadi to the African Development Bank cited in the most recent court documents as a respondent along with Absa, a bank.

Kalagadi Manganese has failed to reach nameplate production of 250,000 tons, a fact blamed in part on contractor Murray & Roberts Construction which Kalagadi Manganese wants to remove as part of its restructuring proposal.

In October last year, Nchocho said: “We are optimistic about positive outcomes,” adding that the IDC was working on “… an alternative mechanism to find a resolution”.

History of dispute

The IDC has clashed with Mashile-Nkosi before. Most memorably, in 2014, she cast the bank into the role of “loan shark”, adding that it was “a nightmare” to work with. At the time, ArcelorMittal was in the process of selling its 50% stake in the company following litigation around the the ownership of a mining licence for the mine.

Controversy has followed the company for years, as well as plaudits: Mashile-Nkosi has been recognised for her business activities including 2015 Africa Female Business Leader of the Year award at a function in New York held on the sidelines of the UN General Assembly.

Kalagadi Manganese operates in the Northern Cape province and employs just over 1,150 people.