Jun 26, 2012
Kalagadi says ArcelorMittal ordered to pay R241mBack
Johannesburg|Port|Africa|Industrial|Industrial Development Corporation|Kalagadi Manganese|Kalahari Resources|Mining|PROJECT|Resources|Sustainable|Africa|South Africa|Eastern Cape|Northern Cape|Daphne Mashile-Nkosi|Operations|Eastern Cape
© Reuse this
High Court Judge P Coppin also ordered the company to pay the costs of the legal proceedings and ruled that ArcelorMittal discharge its financial obligations in the future - prorata to its shareholding in Kalagadi Manganese.
A three-member joint venture (JV), comprising ArcelorMittal with a 50% stake, Kalahari Resources with 40% and the Industrial Development Corporation (IDC) with a 10% shareholding, agreed on a funding strategy during 2009, in which each party’s equity funding obligations were outlined and plans to raise external debt funding in South Africa and on international markets were established.
The equity of the funding was set at 40%, or R4.2-billion, and the debt element at 60%, or R6.5-billion.
To date, Kalahari Resources injected over R1.3-billion into the JV, while the IDC has invested R100-million. Kalagadi said ArcelorMittal’s equity funding obligation reached about R500-million.
Kalahari Resources brought the matter to the High Court in May to ensure ArcelorMittal honoured its shareholder-agreement obligations, after the group failed to settle the matter out of court.
ArcelorMittal’s application to have Kalahari Resources placed under business rescue was also struck from the roll with costs.
ArcelorMittal said in a statement that it was disappointed with the High Court ruling, as it did not resolve “the real” issues. The company claimed that certain material obligations under the Kalagadi Manganese shareholders agreement had been breached and that there remained “serious shortcomings” in terms of corporate governance in the mining firm.
ArcelorMittal said it would review the judgment and consider its options.
Mashile-Nkosi did not believe there would be any hostility between the parties as they moved forward in the best interests of the JV and its operations.
“We are now focused on moving ahead, completing the project and enabling it to meet the enormous potential it has to move South Africa up the beneficiation curve, create sustainable jobs and contribute to the national economy,” she said.
While Kalagadi’s three-tier project experienced challenges with its equity funding, she said local and international investment roadshows have elicited a strong response from debt funders.
Kalagadi Manganese was currently in the final stages of developing a three-million-ton-a-year manganese mine and sinter plant, in Hotazel, in the Northern Cape, and expected to cold commission the mine at the end of July and hot commission it by the end of October.
The mining company also planned to develop a 320 000 t/y high-carbon ferromanganese smelter at Coega, in the Eastern Cape, during 2014.
“The ruling 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,” Mashile-Nkosi added.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Other Mining News
Jersey-headquartered Petra Diamonds plans to launch a $300-million notes issue and increase its senior lender debt facilities to fund the construction of a R1.65-billion processing plant at the Cullinan mine, in South Africa, by the end of 2017. The group outlined on...
Acting Transnet CEO Siyabonga Gama, who was appointed to the position following the surprise secondment of Brian Molefe to Eskom, has placed revenue diversification at the top of his list of immediate priorities, with the weak commodity outlook seen as having the...
Uranium miner Paladin Energy has reported a 10% decline in production during the March quarter from its Langer Heinrich mine, in Namibia. The company said on Friday that while mining production volumes remained on target, production at the Langer Heinrich plant was...
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Forest products group Sappi has confirmed the selection of its 25 MW biomass-to-power project, to be erected at its Ngodwana mill, in Mpumalanga, as a preferred bidder under the South African government’s Renewable Energy Independent Power Producer Procurement...
Information and communications technology (ICT) distributor DCC is making Windows- and Android-operating systems tablets available through retailers and education equipment suppliers to provide school children with affordable, high-performance education tools. The...
Another cement manufacturer is set to enter the Ugandan market, raising hopes that prices will come down and spur growth in the construction industry. National Cement, a Kenyan manufacturer, has unveiled plans to invest $195-million in a new manufacturing plant in...
With growth rates exceeding that in the developed world – at an average of between 4% and 5% between 2002 and 2014 – African countries provide investors with ample reason to tap into booming consumer demand says Manufacturing Circle executive director Coenraad...
The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 3.7 index points month-on-month to 89.1 in March.