[miningmx.com] — ARCELORMITTAL South Africa (Amsa), the South African arm of the world’s largest steel maker, on Monday confirmed that an investigation into Imperial Crown Trading (ICT) was one of the conditions it set for the R800m acquisition of the company.
The company said at the time it announced its acquisition of ICT that the transaction was subject to a due diligence. It also said the deal was conditional on the conversion of the prospecting right held by ICT over 21.4% of Kumba Iron Ore’s Sishen be converted to a mining right.
Rather than a traditional due diligence, the company has called an investigation into whether ICT engaged in corruption in securing the prospecting rights.
According to Business Day, if the investigation found any evidence of corruption, the deal will be rendered null and void.
The company could not say how long the corruption due diligence would take.
While the Department of Mineral Resources last week upheld the awarding of the prospecting right to ICT, saying it found no evidence of corruption in its application, the awarding of the rights is still subject to arbitration brought by Kumba.
Kumba, which also applied for the rights, said last week that respondents to its application – including ICT – must file answering affidavits by the end of this month.
But due to the crowded high court roll, Business Day suggested that the hearing might only likely to take place in the middle of next year.
The successful defending of the court application is imperative if ICT is to cement its holding of the rights. It would then have to have those rights converted to mining rights before its deal with Amsa can be concluded.
