ArcelorMittal to raise prices over Kumba dispute
ArcelorMittal SA, a unit of the world's top steelmaker, will raise prices to partially ease the impact of an ongoing dispute over iron-ore supplies.
ArcelorMittal South Africa, a unit of the world’s top steelmaker, will raise prices to partially ease the impact of an ongoing dispute over iron-ore supplies, it said on Tuesday.
Kumba Iron Ore, a unit of global miner Anglo American, last month terminated a deal that allowed the steelmaker to receive ore from Kumba at a discount and said it would sell its commodity to ArcelorMittal at market rates from March 1.
ArcelorMittal South Africa’s chief executive said that while the company insists that the long-term preferential supply agreement with Kumba was still valid, it will need to hike prices as resolving the dispute may take “an extended period”.
“This will involve passing on increased prices to our customers, given the significant difference between the contractual rate for iron ore of cost +3% and the spot price for iron ore based on worldwide indices,” Nonkululeko Nyembezi-Heita said in a statement.
The company said the surcharge would be refunded to customers if ArcelorMittal succeeds in its claims.
Kumba said ArcelorMittal South Africa had failed to renew its mining rights in Kumba’s Sishen mine as per South African mining laws.
Kumba said its unit, Sishen Iron Ore Company, had applied for ArcelorMittal’s stake last May, but authorities granted a prospecting right over the share to a third party instead.
The government said last week it would review its decision to award the right to Imperial Crown Trading.—Reuters. .