Kumba livid over new ICT application

[miningmx.com] — KUMBA Iron Ore on Friday accused the department of mineral resources (DMR) of acting unlawfully for accepting a mining rights application from Imperial Crown Trading 289 over Sishen mine.

In a statement released on Friday, Kumba said ICT applied for the 21.4% mining right on December 9, after which it was accepted by the DMR on December 23.

Kumba subsidiary Sishen Iron Ore Company was informed on Wednesday about the development.

In its statement Kumba said it was improper for the DMR to have accepted ICT’s new application, given ongoing legal proceedings over the 21.4% prospecting right awarded earlier to ICT.

“The DMR’s acceptance of the application means that the mining right application will now be evaluated according to the detailed process stipulated in the Minerals and Petroleum Resources Development Act (MPRDA) before a decision is made as to whether or not to grant the mining right,’ said Kumba.

“(Kumba) does not believe that is 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 further accused the DMR and ICT of acting maliciously, saying it specifically requested the parties not to proceed with the mineral rights application pending the finalisation of the court case.

“The DMR and ICT both declined to provide these undertakings and, accordingly (Kumba) initiated an application on 14 December 2010 to interdict ICT and DMR in this regard.”

ICT, previously a little-known privately-owned firm, won the prospecting rights after steel giant ArcelorMittal SA failed to renew the mining claims it had over the same stake.

Kumba initially appealed the decision, saying there were anomalies in the government’s decision-making process. In September, Mines Minister Susan Shabangu said the department had rejected the appeal, but added the court would have the final say on the matter.

In papers filed at the High Court in Pretoria, Kumba alleged ICT got hold of its application for the prospecting rights and forged parts of it over the long weekend extending from April 30 to May 4 2009.

The DMR and ICT, who both act as respondents in the court case, are supposed to file their answering affidavits to Kumba’s application before the end of January.


Peter Leon, a partner with legal firm Webber Wentzel who specialises in mining law, said ICT’s new application and the DMR’s acceptance of it has “upped the ante” in the matter.

“How can you accept a mining right application when no one owns the prospecting right,’ he said.

DMR spokesperson Zingaphi Jakuja said the department would issue a formal response during the weekend.

The development is the latest in a series of highly controversial decisions taken by the DMR in recent months.

In August last year, platinum producer Lonmin was temporarily banned from selling associated base metals after Keysha Investments were granted a prospecting licence for a small portion of the platinum group metals player’s property.

In July, the DMR also ordered mechanised mines operating in the North West to stop mining until major alterations were made to the design of their board-and-pillar operations. That was dropped after protests by the mining companies – in particular Aquarius Platinum.

Following these incident, Shabangu said government would overhaul the MPRDA, after it was found to contain “a number of ambiguities’.