Business Maverick


After the Bell: Russia, United Manganese of Kalahari and the ANC’s testicles

After the Bell: Russia, United Manganese of Kalahari and the ANC’s testicles
Russian flag and ANC flag. (Photos: Supplied) | United Manganese of Kalahari. (Photo:

You know that old saying, ‘a billion here, a billion there, soon you are talking about serious money’? The saying came back to me while reading the latest version of the Electoral Commission of SA’s political party funding report. And then the penny dropped – I’ll specify precisely which penny later.

First, some history. For years, political parties resisted the publication of donations, for various reasons. The Democratic Alliance (DA) was worried that if donations by SA corporates were publicised, those corporates would be at risk of being negatively prejudiced by the government. And the ANC was worried that if donations by SA corporates were publicised, they would not be able to positively prejudice their corporate supporters. Too cynical?

Anyway, civil society organisations kept pressing the issue and eventually took it to court and, after a long process, it was agreed to legislate on the issue, and hence the Political Party Funding Act. 

If you thought the above was cynical, try this: I suspect that corporate funding for the ANC had, at this point, more or less dried up because of the slide into corruption. So, the ANC was more in favour of the legislation because it wanted to prevent the DA from getting too much support. Well, who knows. But anyway, the legislation was presented in 2018 and passed in 2021. 

So, from then on, every quarter we have been getting reports on who has been making big donations to the political parties. Actually, the surprising thing is how few big donations there are. The only big donations the DA get, it turns out, are from the Oppenheimer family, and it sometimes gets a bit from corporates who donate more to the ANC, like Naspers and Harmony. The list is actually quite small. 

The ANC list is also pretty small, and it has really only two major donors: its own companies. And those are the Batho-Batho Trust, which is constituted mainly by the local business of the Dutch oil company Shell. And then there is the United Manganese of Kalahari (UMK), and therein lies a bit of a story.

To say that manganese is a crucial metal would be an understatement; you cannot make steel from iron ore without manganese. You don’t need a huge amount of manganese, but you do need it. And 80% of the world’s manganese ore body is found in the Kalahari Basin in the Northern Cape. 

Over the past 20 years or so, the SA manganese industry has been the one part of the metals spectrum which has absolutely flourished. There are now 22 operating manganese mines; 18 of which were established after 2006. 

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This development has been largely invisible to South Africans because only four of those mines are part of listed entities – an extraordinary demonstration of the decoupling of SA’s mining industry from SA’s capital markets. 

Historically, manganese would be locally sintered (turned from ore dust into nodules suitable for use in a blast furnace), and then railed to Gqeberha. But Eskom has largely taken care of the former and Transnet the latter, so large quantities of manganese are now trucked to ports all over the place.

But it’s still a great business, even though manganese prices have been largely static. For example, Australia-listed Jupiter mines, which only really has one major asset – the Tshipi manganese operation – paid a R750m dividend this year. The company has a revenue of R7.5bn, and makes an after-tax/after-royalty profit of R1.4bn. This is a very good business.

In any event, three of these new mines are owned by UMK, which is famously half-owned by Russian oligarch Viktor Vekselberg. Or at least he used to – after the original US sanctions after Russia grabbed Crimea, Vekselberg sold down his stake, and now owns roughly a quarter of the company which owns half of UMK. So, when he was looking for a buyer, he decided on, well, the ANC. Nice.  

Read more in Daily Maverick:ANC’s manganese ‘gold’ mine joint venture with sanction…

This move was largely forced by the US administration. In 2018, Vekselberg and six other wealthy Russian oligarchs, perceived to be close to the Kremlin, were made Specially Designated Nationals by the US government. Their assets in US jurisdictions were frozen and US persons who do business with them were also sanctioned. 

The US applies a 50% rule as part of this system, meaning that any entity (globally) in which a designated person like Vekselberg has a 50% or larger interest, also becomes designated. So Vekselberg now has just below the maximum stake allowed. 

But with the Ukraine invasion, these rules were tightened, and Vekselberg’s 255-foot luxury yacht Tango was impounded. 

The new rules could still be a problem for UMK, because they say the following: “US persons are advised to act with caution when considering a transaction with a non-blocked entity in which one or more blocked persons has a significant ownership interest.” 

The “significant ownership interest” is defined as someone who may have less than 50% ownership but “may control by means other than a majority ownership interest”.  

“Such entities may be the subject of future designation or enforcement action by Ofac (the US officiating body). Furthermore, a US person may not procure goods, services or technology from, or engage in transactions with, a blocked person directly or indirectly (including through a third party intermediary).” 

But be that as it may, it has been a great investment for the ANC, as the “donations” to the party over the past two years, illustrate. The company has paid the party about R30-million in total. 

But this is not all, because the black empowerment group of the company, Majestic Silver Trading 40, has kicked in R2.5m, and Chancellor House, which also owns a slice, has kicked in R22.5m, although some of its contribution might have come from other companies.

This all does little to confront the ANC’s total debt, which is about R500m, but day-to-day, it keeps the wolf from the door. It’s actually only a small portion of the total dividend flow, which is estimated at R2.4bn a year. 

Read more in Daily Maverick:ANC’s manganese ‘gold’ mine joint venture with sanction…

Anyway, the point is that the whole operation is absolutely crucial to the funding of the ANC. 

So, about that penny. 

Remember Foreign Minister Naledi Pandor’s first statement about the Ukraine invasion, which basically just called on Russia to unilaterally withdraw, which, by the way, is what the United Nations charter requires member countries to say? The ANC was furious with Pandor, who was told unequivocally to change her position. This she did, to an approach of enormous intellectual rigour, in which the whole thing was very unfortunate and there should be negotiations, i.e. we support Russia.

I don’t know Pandor well, but I have interviewed her, and there is no doubt in my mind that her original statement was a true reflection of what she actually thinks. She is thoughtful and modern, and not prone to political grotesqueness. 

Pandor is one of the ministers who didn’t get voted back on to the NEC, and I suspect she may be booted. It’s possible party members were furious with her for the implicit criticism of Russia. But, you know, I have this odd feeling she may want to be booted, because this is just too much. We will find out, possibly over the next few days. 

So, the penny-drop is obvious: Russia has the ANC by the balls, which is why SA is effectively supporting the invasion and having fun doing military manoeuvres with Russia. 

And, as US president Theodore Roosevelt once said, “If you’ve got them by the balls, their hearts and minds will follow.” BM/DM


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  • Jon Quirk says:

    Thanks Tim – more of those infernal dots now added up – are you reading this Messrs Gordhan and Ramaphosa?

    Its all the result of adult, joined-up analysis and thinking …..

  • Mari Bekker says:

    And about Shell… Aren’t they trying their best to explore around the coasts for natural gas? Maybe the ANC is hoping that could become a source of income too…

  • jcdville stormers says:

    Russia,Shell, every money donor has them by the balls, there souls are bound to the money god

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