Kumba Says South Africa Court Dismisses Sishen Mine AppealAna Monteiro
Kumba Iron Ore Ltd., which owns Africa’s biggest mine of the material, said a South African court dismissed an appeal by the government and Imperial Crown Trading 289 (Pty) Ltd. to have rights to the complex reinstated.
Today’s ruling by the Supreme Court of Appeal means Kumba’s Sishen Iron Ore unit has the exclusive right to mine the steelmaking material at the Sishen mine in the Northern Cape province, Centurion-based Kumba said in a statement.
“The Supreme Court of Appeal upheld the High Court ruling setting aside the prospecting right granted by the Department of Mineral Resources to ICT,” Kumba said.
Imperial’s owners include a business partner of President Jacob Zuma’s son, Duduzane. ArcelorMittal South Africa, or AMSA, previously held part of the mining right to the property.
In March 2010, Kumba canceled a 2001 accord to supply 6.25 million metric tons of ore a year from Sishen to AMSA, the country’s biggest steelmaker, at cost plus 3 percent, below market prices. Kumba said it lapsed because AMSA failed to renew its mining license for a portion of the deposit, an argument rejected by the steelmaker.
Kumba in December agreed a one-year deal with AMSA to supply 4.8 million metric tons of iron ore from Sishen at a weighted average price of $65 a ton, ensuring the steelmaker’s supply for another 12 months.
“The ruling paves the way for ArcelorMittal South Africa and SIOC to resume the arbitration process that was postponed pending the outcome of the Supreme Court of Appeal ruling,” AMSA said in a separate statement.
Kumba was unchanged at 491.97 rand by the close in Johannesburg. AMSA fell 0.1 percent to 28.44 rand.