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Anglo Unit Kumba Says Imperial's Sishen Rights Application Is `Fraudulent'
Kumba Iron Ore Ltd., a unit of Anglo American Plc, said an application by Imperial Crown Trading for a partial right over its Sishen ore mine in South Africa is “fraudulent.”
Imperial’s application “involved a process of fraudulent manipulation and misrepresentation,” Kumba said in a supplementary affidavit submitted to South Africa’s high court in Pretoria last week. Imperial gained “unlawful” access to an earlier rights application made by Kumba’s subsidiary, Sishen Iron Ore Co. Ltd., Kumba said.
“We’re surprised and shocked at some of the allegations,” Jagdish Parekh, who owns half of Imperial, said by phone from Johannesburg today. “We’re studying the documents and will be responding,” he said, declining to comment further.
Kumba in May asked the North Gauteng High Court to review the process through which a 21.4 percent prospecting right at Sishen was awarded to Imperial, whose biggest single shareholder is Parekh, who’s in business with Duduzane Zuma, one of South African President Jacob Zuma’s sons.
South Africa’s Department of Mineral Resources earlier this month said it had decided to uphold the award to Imperial after a review. Kumba, which had also applied for the right, maintains that it should have been awarded it.
“The ICT application is fraudulent and the product of a corrupt process,” Kumba said in its affidavit last week.
“That matter is sub-judice and we’re therefore not in a position to comment,” said Jeremy Michaels, a spokesman for the Department of Mineral Resources, by mobile phone on Aug. 31.
Missed Deadline
All minerals and metals resources in South Africa belong to the state and companies can apply for rights to prospect or mine them. The rights at Sishen became available after ArcelorMittal South Africa Ltd., a steelmaker, failed to renew them by a May 2009 deadline. The rights subsequently reverted to the government before being granted to Imperial.
ArcelorMittal South Africa, a unit of the world’s largest steelmaker, said on Aug. 10 that it had agreed to buy Imperial for 800 million rand ($111 million) to regain the iron-ore rights. The deal will be canceled if Imperial loses the rights as a result of Kumba’s court action.
“ArcelorMittal was not part of the process in which the prospecting license was awarded to Imperial, and therefore it would not be appropriate for us to comment,” ArcelorMittal South Africa spokesman Themba Hlengani said in an e-mailed response to questions yesterday.
Shares in Kumba rose 51 cents, or 0.2 percent, to 350.49 rand at the close at 5 p.m. in Johannesburg, giving the company a value of 112.7 billion rand. Shares in the company have gained 15 percent since the start of the year.
The case is Sishen Iron Ore Co. Ltd. vs. the Minister of Mineral Resources of the Republic of South Africa, and Imperial Crown Trading 289 Ltd., Case Number 28980/2010, North Gauteng High Court, South Africa.
To contact the reporters on this story: Ron Derby in Johannesburg at rderby1@bloomberg.net
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