Kumba denies breaches in cutting iron ore supplies to ArcelorMittal SA

Monday, 01 March 2010 17:08:23 (GMT+2)

US-based mining giant Anglo American plc's South Africa-based subsidiary Kumba Iron Ore has said regarding the ongoing iron ore supply dispute with ArcelorMittal South Africa Limited, subsidiary of the world's largest steel maker ArcelorMittal, that it had notified ArcelorMittal on February 5 that it would no longer supply iron ore from the Sishen iron ore mine to the company at a cost plus three percent price after March 1. Kumba Iron Ore said that it has tendered to sell iron ore to ArcelorMittal on commercial terms.

According to the Kumba press release, under the terms of the Sishen Supply Agreement which has been in effect since 2001, Kumba has, 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, 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 21.4 percent undivided share of the mineral rights to iron ore at Sishen Mine, as required in the terms of the Mineral and Petroleum Resources Development Act, Kumba took the mentioned action, the press release said.

Kumba denies that it has breached the agreement and will respond in due course to the undertakings sought by ArcelorMittal.

As SteelOrbis previously reported, on February 26 ArcelorMittal South Africa said that it rejects Kumba's cancellation of the contract and is engaging the management of Kumba as a matter of urgency. The company says that if the matter is not resolved satisfactorily it will proceed with legal action.

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