[miningmx.com] — KUMBA Iron Ore (Kumba) has taken formal legal action against the Department of Mineral Resources (DMR) over the Sishen mineral rights dispute, in addition to the internal appeal process already under way.
A Kumba spokesperson said the action was being taken in terms of the Promotion of Administrative Justice Act and Kumba has launched a review application in the North Gauteng High Court.
The spokesperson said the action should not be viewed as an indication that the internal appeal process to the DMR and Minister of Mineral Resources Susan Shabangu was not progressing well.
She said: “The internal appeal process continues, but it is taking a long time. In terms of the Administrative Justice Act, a legal appeal has to be lodged within six months of becoming aware of the decision that is being challenged.
“Kumba has now applied for that decision to be reviewed and set aside within the deadline period to make sure they do have the opportunity to take it to court should this be required.’
Kumba is objecting to the award of the 21.4% interest in the Sishen iron ore mine that was previously owned by ArcelorMittal to Imperial Crown Trading (ICT).
ArcelorMittal did not renew the right by end-April 2009 as required, meaning the right reverted to the state. Both Kumba and ICT immediately applied for the right on the same day but it was awarded to ICT, apparently because preference must be given to “historically disadvantaged persons’.
According to the Mail & Guardian newspaper, the major shareholder in ICT is private company JIC Mining. This is linked to the Oakbay Trust, which in turn is linked to the Gupta family.
Kumba cancelled its contract to supply 6.25 million tonnes (mt) of iron ore to ArcelorMittal on the preferential pricing basis of cost plus 3%, because ArcelorMittal no longer held the interest in the Sishen mine.
That has provoked a confrontation between the two groups, with Kumba on May 4 threatening to stop supplying ArcelorMittal with iron ore altogether unless it agreed to an interim pricing arrangement while their dispute went to arbitration.
Kumba pointed out on May 4 that ArcelorMittal had paid nothing at all for iron ore railed to it during March.
The Kumba spokesperson said on Monday: “ArcelorMittal has now paid for the iron ore railed during March and April on the basis of cost plus 3%.
“It has not paid any excess into an escrow account as requested by Kumba. The two sides are still involved in discussions over the interim pricing proposals. We are still hopeful a suitable agreement can be reached,’ the spokesperson said.
