South African mining tycoon Daphne Mashile-Nkosi could lose her mine over a $375 million debt

South Africa's Supreme Court of Appeal cleared the way on Tuesday for the state's development lender to seize control of Kalagadi Manganese, the Northern Cape mining company founded by Daphne Mashile-Nkosi, over a debt of 6 billion rand.

The court dismissed Kalagadi's challenge to the Industrial Development Corporation's authority to place it in business rescue, ending the last procedural defence in a fight that has run since 2020. The debt is worth about $375 million at 16.01 rand to the dollar.

Business rescue under South African law hands a company to an independent practitioner who displaces the board and either restores solvency or delivers creditors a better return than liquidation. Applied to Kalagadi, it takes control away from Mashile-Nkosi, who owns roughly 67% of the company through two holding vehicles.

The IDC was her first institutional backer. It lent Kalahari Resources 60 million rand for a bankable feasibility study after Investec financed an earlier prefeasibility study with 12.5 million rand, and in January 2007 bought a 20% stake in the project. That transaction created Kalagadi Manganese. The lender still holds 20% and is now the creditor forcing the company into rescue.

Mashile-Nkosi started Kalahari Resources in 2001 with a group of black South African women, entering a manganese sector then dominated by Anglo American and Assmang. She came from the anti-apartheid movement and had worked in banking and politics, campaigned on women's rights and helped structure Cell C, the country's third mobile operator. Commercial banks turned her down, and she and her husband Stan Nkosi paid for the first 14 exploration holes themselves. He died in 2008, during construction, after a hospital procedure went wrong.

The prospecting right came in 2005, covering about 6,300 hectares across three farms near Hotazel. ArcelorMittal bought 50% in 2008 in a deal Moneyweb valued above $400 million, fell out with Mashile-Nkosi over funding and governance, lost a South Gauteng High Court case that compelled it to pay 285 million rand within five days, and exited entirely in 2016, selling to Kgalagadi Alloys. The current register shows Kgalagadi Alloys at 44%, Kalahari Resources at 36% and the IDC at 20%, with at least 70% of ultimate shareholders women.

The assets are not in question. The court described mining rights covering about 960 million tonnes of manganese ore and the world's largest sinter plant, with capacity for 3 million tonnes of run-of-mine ore a year, enough reserve to run for three centuries. Mashile-Nkosi has put the cost of the complex, which includes a planned ferromanganese smelter, at $1.3 billion.

The company has not serviced its debts for at least six years. The judges said the contrast between the abundance of the underlying assets and the persistent failure to meet obligations lay at the heart of the dispute.

Kalagadi had argued that the IDC waited too long and that an application brought in 2020 had gone stale. The court found that "the delay is largely self-induced," citing the interlocutory challenges and procedural skirmishes Kalagadi itself launched, including repeated attacks on the IDC's authority and successive applications for leave to appeal. A litigant who caused the delay cannot rely on it to defeat its opponent, the judges said, because that would turn its own tactical choices into a substantive defence.

The judgment also found that after nearly six years Kalagadi had not shown it could service the debt or produced a workable restructuring proposal, and that talks between the parties amounted to exploratory discussions running alongside the IDC's enforcement rather than replacing it.

Kalagadi has not said whether it will seek leave to appeal to the Constitutional Court.