Kumba needs new permit to access Sishen mine reserves

Kumba's Iron Ore lodged a request for a mining right with the department of mineral resources. (Madelene Cronje, M&G)

Kumba's Iron Ore lodged a request for a mining right with the department of mineral resources. (Madelene Cronje, M&G)

Kumba Iron Ore said it needs a new mining permit to access about a third of reserves at its Sishen mine in South Africa, the continent’s largest.

The Anglo American unit requires a right to properties on which Transnet, the state-owned rail operator, had a track that was used to carry the steel-making ingredient to ports, the Pretoria-based company said in a statement on Tuesday.


The strip is 14 kilometres long and 30 metres wide and separates the current Sishen pit from part of the extension. Transnet has agreed to sell this land to Kumba, while the mining company has sold the properties for a new line to the transport utility.


Kumba lodged the request for the mining right with the department of mineral resources on Monday, spokesperson Gert Schoeman said on Tuesday. "Should the applications be unsuccessful, the expansion of the Sishen pit in a westerly direction may be materially affected," the company said. Kumba "would potentially not be able to access approximately 33% of the Sishen reserve," it said.


South Africa's highest court last month reserved judgment in a case where the department asked to overturn the grant of a partial prospecting right to Kumba for the Sishen mine. The asset accounted for 75% of the company’s production of 22-million metric tons during the first half of 2013. The Anglo unit spent R337-million on the Sishen Westerly Expansion project in 2012 and estimates that this amount will increase to R1-billion by completion in 2016, it said on February 12.


Kumba wants to start preparing the affected area for mining within six months to replace depleted reserves within the existing mine pit, Schoeman said on Tuesday. Transnet finished the relocation of the railway line in May, while the transfer of the property rights is pending at South Africa’s deeds office, the company said.– Bloomberg



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