A feud between Iscor and a Namibian businesswoman over a zinc mine has taken a new twist, reports Mungo Soggot
A Namibian zinc mine is the focus of an acrimonious billion-rand battle between the daughter of a German Jew who fled the Nazis to prospect in Africa and steel giant Iscor.
When Mose Kahan on his deathbed in 1964 took on Iscor as a partner in his beloved mine it was his way, his daughter claims, of giving southern Africa a share in the mine he called Rosh Pinah (Hebrew for “headstone”) — the headstone of the Namibian economy. In those days Iscor, now a flourishing private company, was state-owned and South Africa controlled Namibia.
But it was a fateful decision which laid the ground for an epic struggle between his daughter and Iscor over ownership of Rosh Pinah that entered its latest round in the Namibian High Court last week.
Kahan’s diminutive, wily daughter, Diane Lidchi, is pressing ahead with a N$1-billion claim against Iscor after four years of legal wrangling which has seen Moly Copper, (the company she heads which holds her father’s stake in the mine) lose all its links with Rosh Pinah. The mine now stands to end up in Australian hands.
“Ek gaan vrek (I am going to die)”, was how, according to Lidchi, her father started his conversation with Iscor’s then-head of mining, Ben Alberts, 32 years ago. The deal, says Lidchi, involved Iscor receiving 51% of the mine for R510 and a commitment to manage and fund it in good faith.
The partnership worked for 23 years, but turned sour after Iscor was privatised in 1989. The Rosh Pinah holding company, which Iscor controlled, increased its loan account dramatically. When the loan account with several creditors including Iscor hit R46- million in 1992, Iscor, which was obliged to pay Moly Copper 9% of the mine’s royalties, said it would stop funding the mine and pushed for its liquidation.
Iscor has since publicly said the high payout to Moly Copper was the main reason for its decision to wind up its joint venture.
Lidchi fought Iscor every step of the way and argued it had deliberately framed the mine’s accounts to make it appear unprofitable — a charge Iscor vigorously denied. She says the current head of Iscor’s mining division she is up against is Alberts’ son, Ben.
Lidchi argued Iscor, after privatisation, wanted to ditch its joint-venture partner, and the only way it could do this was to find a way of liquidating the mine’s holding company and then buy it back.
To some extent, she found an ally in Nambian Judge TJ Frank. Although he ruled in Iscor’s favour in the Namibian High Court in June 1994 and ordered the mine be liquidated after sifting through both sides’ arguments, he did not award Iscor costs.
Judge Frank said: “While it may be a fact of life that big fish eat small fish, this does not mean that I should make the process for the big fish even more palatable by awarding it a further prize [costs] for being such a successful predator.
“The predetermined and calculated way in which Iscor acted by sending out letters to creditors so as to preempt the liquidation suggests the strategy averred to by Moly Copper.”
After Lidchi lost her appeal, the Rosh Pinah holding company was put on the chopping block and Iscor did, in fact, buy up the assets for sale — for N$35-million. This included N$12-million which remained from the liquidated Rosh Pinah holding company.
Lidchi said Iscor’s decision to buy it back was in complete contradiction to its position in court, where it had argued the mine had no future.
A few months later Iscor suffered a reversal of fortune when it found itself sitting on the mine without the right to mine. In a bizarre twist, the government decided to give the mining rights, which had been suspended on liquidation, to an unknown mining company, P&E Minerals, linked to the ruling South West People’s Organisation party.
Lidchi scoffed at the time: “The Namibian state has no good reason to give it to the now-privatised Iscor, which has such an unpredictable attitude to profitability.” Asked to comment on the decision, Namibia’s Mines and Energy Minister Andimba Toivo Ya Toivo said: “I have given the rights to P&E Minerals and that is final.”
Iscor threatened to take the Namibian government to court for the decision, but then changed tactics and started talking to P&E about a joint venture.
There was much speculation that Lidchi was behind P&E which had Namibian Trade and Industry Minister Aaron Mushimba as one of its directors — a suggestion she batted off at the time with a chuckle and a “no comment”.
Then, last week, coinciding with the latest court round with Lidchi, Iscor announced it was intending to expand Rosh Pinah through a lucrative agreement with Australian mining company Western Metals. The deal, which still has to be approved by the government, gives Western all of Iscor’s current Rosh Pinah holding company and Iscor N$151-million worth of shares in Western.
Asked why Iscor was now seeking to expand Rosh Pinah after pushing for its liquidation last year, spokesman Piet Combrink said: “Rosh Pinah was liquidated as it was unable to pay its creditors of which Iscor was one, and Iscor was no longer prepared to fund the mine under the existing shareholder agreement.” As far as the mineral rights go, Western will have to negotiate with P&E, Iscor said.
Lidchi has slotted this latest development into her affidavit to back her N$1-billion claim: “I have on many occasions, including in past litigation involving Iscor, complained that Iscor has deliberately embarked on a programme to represent the mine as comparatively worthless in order to seek to acquire it for a ludicrously low price.”
Of the Western deal she says: “There has been no significant movement in zinc or lead prices over the time, and the mine is clearly worth at least this amount even at the time of the liquidation.”
Far from being put off by the Western Metals development, she is more belligerent than ever and is now steering her latest court case from her vast Africana-cluttered home near Johannesburg’s Zoo Lake.