ArcelorMittal’s Sishen iron mining rights granted to a third party

Thursday, 18 March 2010 15:13:37 (GMT+2)

On March 17, London-based mining giant Anglo-American plc's South African iron ore subsidiary Kumba Iron Ore (Kumba) announced that the residual 21.4 percent mining right of Sishen Iron Ore Company Ltd (SIOC) previously held by ArcelorMittal South Africa (ArcelorMittal) has been granted by the South African Department of Mineral Resources to a third party.

As SteelOrbis previously reported, under the terms of the Sishen Supply Agreement in effect since 2001, Kumba, by virtue of ArcelorMittal's ownership of a 21.4 percent undivided share of the mineral rights to the Sishen mine, acted to contract mine at the Sishen mine on behalf of ArcelorMittal and to supply 6.25 million mt of iron ore per annum at very low profit, representing ArcelorMittal's share of production from the mine. As a result of ArcelorMittal having failed to convert its old order mining right in respect of its share of the mineral rights as required in the terms of the Mineral and Petroleum Resources Development Act, on February 5 Kumba stopped supplying ore to ArcelorMittal, saying that it is open to new agreements under commercial terms.

According to a press release by Anglo-American plc, SIOC has lodged an appeal against the grant of the prospecting right to a third party and Kumba is currently engaged in discussions with the Department of Mineral Resources on the issue.

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