Sishen objects to ICT mining rights decision

Sishen Iron Ore Company has objected to a decision by the mineral resources department to accept a mining right application from Imperial Crown Trading, Kumba Iron Ore Limited said on Friday.

Sishen Iron Ore Company is a subsidiary of Kumba Iron Ore Limited.

Sishen was informed by the department on Wednesday that Imperial Crown Trading (ICT) had applied for a 21,4% mining right over Sishen Mine on December 9, 2010.

The department of mineral resources (DMR) accepted the application on December 23.

Sishen “does not believe that it was lawful for the DMR to have accepted ICT’s application, pending the high court review initiated in May 2010, over the prospecting right awarded to ICT”, Kumba said in a statement.

Sishen “is in the process of objecting to the DMR’s acceptance of ICT’s mining right application, and will further commence a process to appeal the decision”.

Last November, Sishen had asked ICT to provide it with an undertaking that, until the finalisation of the high court review application, it would not apply for a mining right for the Sishen Mine.

The company had also asked the department to neither accept an application from ICT, not to grant it the 21,4% mining right.

Kumba said the department and ICT both declined to provide such undertakings, so it had applied for an interdict on December 14 to enforce it.

The dispute about the 21,4% mining right over Sishen Mine arose out of disagreement between Kumba Iron Ore and ArcelorMittal South Africa.

This results from 2001 when as part of Iscor’s unbundling, it was agreed that a 21,4% stake in mineral rights of the Sishen mine would vest in the company that is now ArcelorMittal SA.

At the time it was agreed that Sishen would supply ArcelorMittal SA with iron ore at up to 6,25-million tons a year, at cost plus 3%.

When ArcelorMittal SA failed to renew its 21,4% stake in part of the Sishen mine, Kumba said it would sell its iron ore to the steel giant at market prices.

The 21,4% stake was then granted to ICT. Kumba also applied to the department for the right to it.

Kumba said on Friday that the matter was still before the high court.

“With regard to the high court review application over the prospecting rights awarded to ICT, neither the DMR nor ICT has as yet filed their answering affidavits.”—Sapa