/ 28 June 2010

Kumba refuses SA firm iron-ore prospecting bid

Kumba Iron Ore said on Monday it had rejected Imperial Crown Trading’s bid to start prospecting for iron ore at Kumba’s Sishen mine due to a row over South Africa’s award of prospecting rights to Imperial.

Kumba, a unit of mining giant Anglo American and the world’s 10th largest global iron ore producer, has applied for a court review of the granting of 21,4% prospecting rights to Imperial Crown Trading by the Mining Department in Africa’s largest economy.

Kumba said in an email response to Reuters questions that Imperial Trading lawyers had asked Kumba to allow the firm access to its Sishen mine, but that Kumba had turned down the request.

“Kumba’s legal advisers have responded that the company will not provide access to the property in the light of the pending review application and are awaiting a response from attorneys,” Kumba said.

The 21,4% mining rights in Kumba’s Sishen mine were previously held by ArcelorMittal South Africa.

It entitled the unit of the global steel maker to receive iron ore from Kumba at a discount, but Kumba said ArcelorMittal South Africa had failed to renew the mining rights.

Kumba terminated the long-term deal under which it sold ore to the steelmaker at a discount and said it would then sell to ArcelorMittal South Africa at market rates from March, but ArcelorMittal South Africa rejected the move and the matter is now under arbitration. — Reuters