Kgalagadi Manganese multibillion-rand debt dispute heads to arbitration

THE SUPREME Court of Appeal has ruled that Kalagadi Manganese's multibillion-rand debt dispute with its lenders must proceed to arbitration, dismissing the miner's attempts to avoid the process.

The court ruled that the dispute must go to arbitration in London, as agreed upon in their contract, rather than being settled in a South African court.

The company, led by Daphne Mashile-Nkosi, owes approximately R8.5 billion to creditors, including:

• Industrial Development Corporation (IDC): R3 billion
• African Development Bank (AfDB): R3 billion
• Absa: nearly R1 billion

The IDC, which holds a 20% stake in Kalagadi, had sought arbitration to recover its debt. The court rejected Kalagadi's argument that the IDC is precluded from entering into arbitration agreements, stating that lending money is key to the IDC's mission.

Kalagadi operates in the Northern Cape's Kalahari basin, which contains 80% of the world's known land-based manganese reserves. The company has mining rights covering over 960 million tons of manganese ore across three farms. A parallel business rescue application filed by the IDC four years ago remains tied up in legal proceedings.

Kalagadi is studying the judgment and considering all legal options, including a possible further appeal.

The arbitration process will determine the outcome of the debt dispute.