[miningmx.com] — THE three-way battle between the Kumba Iron Ore, ArcelorMittal South Africa (Amsa), and Imperial Crown Trading (ITC) is gaining momentum as legal processes get under way.
The legal teams of Kumba, Anglo American’s iron ore subsidiary, and Imperial Crown Trading will soon be meeting to discuss ITC’s demand for access to the Sishen mine as it has become clear that a reappraisal of government’s decision to award ITC prospecting rights will take several months.
ITC is insisting on access to the mine because legislation prescribes time limitations on prospecting rights and the newcomer wants to use the rights as soon as possible. It could lose the rights if too much time elapses before it can start prospecting, said Jagdish Parekh, the company’s controlling shareholder.
Kumba and ITC are engaged in a fierce dispute over mineral rights over Sishen, one the world’s biggest and most valuable iron-ore mines near Kathu in the Northern Cape.
ITC applied to the Department of Minerals for 21.4% of Sishen’s mineral rights after former owner Amsa had neglected to renew its rights.
A key issue in the dispute is how ITC discovered that Amsa’s mineral rights had lapsed on April 30 last year, enabling it to apply.
Parekh told Sake24 that Advocate Phemelo Sehunelo from the Northern Cape bar was the founder of ITC, and had been involved first in acquiring the mineral rights.
He said he – Parekh – had become involved in March.
Sehunelo, who is also acting CEO of Kimberley Consolidated Mining, responded to enquiry saying all one had to do was to keep an eye on Kumba and Amsa’s annual reports. He had noted from public documents that the rights had expired, he said.
When it was pointed out that there had been no mention of the lapsed mineral rights in the Kumba and Amsa annual reports, Sehunelo reacted aggressively.
Applicants were not required to reveal where they got their information, he maintained.
In the second phase of the dispute, Amsa and Kumba eventually managed to appoint arbitrators for the legal spat in which Kumba disputed Amsa’s right to purchase 6.25 million tonnes of iron ore a year from Sishen at cost price plus 3%.
This right was attached to Amsa’s former mineral rights over the Sishen mine.
Kumba and Amsa have each appointed a mediator for the hearing, but they still have to agree on a third, independent one, said a Kumba spokesperson. The outcome of the dispute is critical to Amsa’s continued survival.
The right to get the iron ore at cost price means a saving of some R4bn a year, depending on the market price for the commodity.
