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SAfrica's Kalahari dispute won't affect projects

Published 09/10/2010, 06:48 AM
Updated 09/10/2010, 06:52 AM

* Kalahari boardroom wrangle latest in mining disputes

* Projects to go ahead as planned despite row

(Adds details, background)

JOHANNESBURG, Sept 10 (Reuters) - South Africa's Metmar Limited said on Friday that a dispute at Kalahari Resources, in which it holds a stake, would not delay development of maganese projects in the Northern Cape province.

Local newspapers have reported that Kalahari's chairperson, Daphne Mashile-Nkosi, and another director had been removed from the company's board and replaced with Sandile Majali and seven others.

Mashile-Nkosi has laid charges of fraud against Majali and launched an application in a South African High Court to remove the new directors from the company.

Metmar said the Kgalagadi Manganese operation, where Kalahari holds a 40 percent stake, continued to run normally despite the wrangle and that there would be no delay in the ongoing construction of a 3.6 billion rand ($498.9 million) sinter plant and in the planned start of construction of a smelter later this year, for commissioning in 2012.

ArcelorMittal South Africa Ltd has a 50 percent stake in the Kgalagadi Manganese operation and the Industrial Development Corp. (IDC) holds 10 percent.

"Kalahari Resources expects the construction of the twin shaft mine, which has already started, to proceed smoothly," Metmar said in a statement.

Mining disputes have become a common feature in South Africa, the continent's largest economy. The government's handling of two disputed mine right awards have damaged the resource-rich country's reputation and raised investor concerns over transparency and governance.

Kumba Iron Ore, a unit of Anglo American, and Lonmin have said the government deprived them of mining rights when it awarded prospecting licences, some to people linked to high-ranking officials, over areas where the two mining giants operated.

Kumba has accused ICT of using its title deeds to form part of documents it had submitted to apply for a prospecting right. (Reporting by Shapi Shacinda)

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