JSE questions ArcelorMittal SA unit
ArcelorMittal’s South Africa unit said it was answering questions from the JSE about why it had delayed making public a change in its iron ore supply deal.
ArcelorMittal South Africa informed the market on February 26 of a change in its iron ore supply deal—three weeks after its main supplier told it that it would stop selling the metal at a discount.
ArcelorMittal South Africa spokesperson Marion Green-Thompson said the steelmaker had given an explanation for the delay, after which the JSE had sent another request for further information. She declined to give details.
“We have received another letter from the JSE today [Tuesday], following up with further questions seeking an explanation as to why there was a delay in informing the market,” Green-Thompson said.
JSE CEO Russell Loubser was quoted by the media on Tuesday as saying the bourse was looking into the whole episode to verify why it took three weeks for the steelmaker to make public the changes to the iron ore deal.
ArcelorMittal South Africa made an announcement on February 26 that Kumba Iron Ore, a unit of global miner Anglo American, had said it would stop selling iron ore to the steelmaker at a discount and would begin charging market prices from March 1. It did not specify when it received notice from Kumba.
Kumba also made a statement on the same day outlining the change and saying it had told ArcelorMittal South Africa about its decision on February 5.
ArcelorMittal South Africa has said the agreement for the discount was still valid and both companies said last Wednesday they had started negotiations to try to resolve the dispute.
ArcelorMittal South Africa shares stopped trading on February 26 at the company’s request, which was made with its announcement about Kumba. The shares started trading again last Wednesday and fell 24% during the first session on concerns the group will have higher costs if it has to pay market rates for the iron ore.—Reuters