[Ferro-Alloys.com] The Johannesburg Commercial Court has ruled that business rescue proceedings at Kalagadi Manganese be dealt with expeditiously after it dismissed an appeal by the Industrial Development Corporation (IDC) against its application to have Kalagadi placed under business rescue.

The main shareholders in Kalagadi are Kalahari Resources and Kgalagadi Alloys, but the IDC is the most significant lender to Kalagadi and also holds a minority stake in the company.

Kalagadi owed the IDC an estimated R3 billion while a further R2.9bn was owed by the miner to the African Development Bank (AfDB).

The miner was also appealing against the South Gauteng High Court’s, Johannesburg, ruling which dismissed its application to compel lenders in the company - that also included Absa Bank - to accept a restructuring arrangement, which it argued would negate the need for business rescue.

However, Judge Brian Spilg on Monday dismissed the application for leave to appeal the court’s earlier decision by the two parties.

“I have reconsidered the judgment of 6 September 2023 in light of the contentions advanced by all the parties and am satisfied that their respective appeals would not have a reasonable prospect of success and that at least in one instance would be premature,” he ruled.

Judge Spilg also emphasised that “business rescue proceedings should be dealt with expeditiously so as to avoid all affected parties being left “in a state of flux” for an indefinite period.

Kalagadi and the IDC last year agreed to separate their respective litigation against each other.

In one of the four preliminary issues presided over by the court, Kalagadi and its shareholders sought a decision on whether the IDC board had authorised the launching of business rescue proceedings.

Kalagadi also sought an allied relief which included interdicting the lenders from exercising their security until its own application was first determined.

“I accordingly order that: the application for leave to appeal brought by Kalagadi Manganese, Kalahari Resources, and Kgalagadi Alloys is dismissed,” Spilg said in the judgment.

“The application for leave to appeal brought by the Industrial Development Corporation of South Africa Ltd and the African Development Bank is dismissed.”

The IDC had committed to invest R3.5bn into the Kalagadi Manganese Project, a black-owned mining company, ramping up the worth of the project to R11bn.

The development finance institution had hoped its funding would help build an integrated manganese operation, including a mine capable of three million tons per annum, and a sinter plant which processes manganese ores by heating them to just below melting point.

The project also includes a ferromanganese alloy smelter, located in the Coega Industrial Development zone on the Eastern Cape coast, near Port Elizabeth. Ferromanganese is an essential component in the manufacture of steel. While South Africa is a top world producer and exporter of manganese ore, the sub-sector is being held back by infrastructure bottlenecks.

The force behind Kalagadi Manganese are South African black women entrepreneurs who founded Kalahari Resources in 2001. Four years later, they bagged a prospecting licence to search for manganese in the Kalahari Basin.

Source: IOL

• [Editor:tianyawei]