Kumba Iron Ore on Thursday said it will fight the state’s decision to reject its bid for a disputed mining right, calling the decision “legally incorrect and fundamentally flawed”.
The dispute concerns Kumba’s bid for a mining right over a 21,4% stake in its Sishen mine.
The iron ore producer, a unit of Anglo American, said it had acted according to the law.
“[Kumba] has not acted in an irregular or fraudulent manner as alleged by the Department of Mineral Resources [DMR],” it said in a statement. “The DMR has not provided [Kumba] with any evidence whatsoever to substantiate these allegations.”
The company said it would challenge the decision in court.
The state has rejected Kumba’s bid for a disputed mining right because its application was “fraudulent” and “premature”, Business Day reported on Thursday, quoting a letter sent to the company.
The 21,4% stake was the base of a preferential iron ore supply deal between the two companies which Kumba cancelled in February after ArcelorMittal failed to convert its right over the stake into the new mining rights as required by law.
The government subsequently awarded a prospecting right over that stake to Imperial Crown Trading, a little-known company with close ties to high-ranking government officials. Kumba has been contesting the award of the prospecting right in court.
The paper said the state dismissed Kumba’s application partially because of the “irregular, misleading and fraudulent manner” in which it was submitted and because it lacked environmental management plans, as required by the Minerals Act.
According to the state, Kumba had submitted its application before ArcelorMittal’s right had expired.
The iron ore producer was not immediately available to comment.
Various disputes over mining rights in 2010 tarnished the image of South Africa as a destination for international mining investment, despite it being the world’s biggest platinum producer and number three gold producer. — Reuters