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25 Mar 2011 16:48
ArcelorMittal South Africa said on Friday it expects arbitration proceedings relating to its stake in Kumba Iron Ore’s Sishen mine to be heard early next year.
The steelmaker, a unit of the world’s biggest steelmaker, has been at loggerheads with Kumba, a unit of Anglo American, over iron ore prices since February last year.
The dispute started after Kumba terminated a long-term deal under which it sold ore to the steelmaker at a discount after ArcelorMittal failed to convert its rights over a 21.4% stake in the Sishen mine into a new right as required by law.
“It is expected that the arbitration relating to the dispute with [Sishen] will be heard in early 2012,” ArcelorMittal SA said in a statement.
Pending a resolution of the dispute the two companies reached an interim agreement valid until the end of July this year for ArcelorMittal to source iron ore from Kumba at about half of the market price.
ArcelorMittal SA has said it would negotiate with Kumba to extend the interim pricing deal until the dispute is resolved.
The company is also attempting to buy little-known mining firm Imperial Crown Trading (ICT) after that company won a prospecting right to a stake in Kumba’s Sishen mine.
ArcelorMittal SA has also said it would transfer about a quarter of its shares to black investors, including ICT and an investment group led by the son of South African President Jacob Zuma.
“The period for the satisfaction of conditions precedent for the BEE transaction has expired and the parties are in the process of extending it,” the company said.
As of 0945 GMT, shares in the steelmaker were trading up 1,02% at R87,90, compared with a 0,33% fall in the Johannesburg’s blue-chip Top-40 index.—Reuters
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