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10 Aug 2010 10:53
ArcelorMittal South Africa, a unit of the world’s top steelmaker, said on Tuesday it would buy Imperial Crown Trading (ICT), which holds a disputed prospecting right previously held by the steelmaker.
The purchase price was R800-million.
ICT earlier this year was awarded a prospecting right over a 21,4% stake in Kumba Iron Ore’s Sishen Mine, which supplies ore to ArcelorMittal under a deal that has been disputed by both companies since February this year.
Kumba, the world’s 10th largest iron-ore producer and a unit of Anglo American, terminated the long-term deal under which it sold ore to the ArcelorMittal unit at a discount and said it would then sell iron ore at market rates from March.
The dispute has been in mediation since February and the companies said it could take two years to resolve, although the parties reached a stop-gap agreement last month for ArcelorMittal to buy ore at about half of recent market prices.
The iron-ore producer cancelled the preferential deal after the ArcelorMittal unit failed to convert its mining right in the Sishen mine stake, which was later awarded to ICT.
Kumba in June rejected ICT’s bid to start prospecting for iron ore at Sishen after it had applied for a court review of the granting of the right by the Mining Ministry.
In a separate statement, ArcelorMittal South Africa said it had finalised its black economic empowerment deals with an aggregate value of R9,07-billion, transferring 26% of its shares to a group of black investors—including an investment group led by the son of South African President Jacob Zuma—and employees.—Reuters
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