Johannesburg — BLACK empowerment consortium Kalagadi Manganese has distributed R223,7m to its 19 shareholders from the proceeds of a deal with steel giant ArcelorMittal, Kalagadi Manganese chairman Daphne Mashile-Nkosi said yesterday.

She said she hoped the deal would provide a model for other black empowerment holders of mineral prospecting rights, who often ended up selling their properties because they could not raise the funding for feasibility studies.

Last year Kalagadi Manganese sold 50% of its manganese project in Northern Cape to ArcelorMittal for $222,5m or R1,76bn at an exchange rate of R7,92 to the dollar.

The project includes a mine and sinter plant at Hotazel near Kuruman and a ferromanganese smelter to be built at Coega.

The shareholders of the company had paid for a pre feasibility study on their property by raising R12,5m among themselves and through bringing in the Industrial Development Corporation (IDC) as a 20% shareholder with a contribution of R60m.

They proved a resource of about 960-million tons of manganese, with potential to increase this in the future.

A 50% stake in the project was offered to potential bidders and 19 companies showed interest, Mashile-Nkosi said.

The bankable feasibility study had just been completed but work had already begun on sinking the vertical shaft in an effort to fast-track the project, which should be completed within about three years.

Kalagadi Manganese returned R317,2m to the IDC and has retained R1bn which would enable it to maintain its equity stake in the manganese project in future, although it was more likely that future development costs would be met through project finance.