[miningmx.com] — THE feud between Kumba Iron Ore (Kumba) and ArcelorMittal shifted deep into the danger zone on Friday, as the steel producer announced plans for the immediate closure of its Saldanha Bay plant.
That was in response to demands from Kumba earlier on Friday that unless ArcelorMittal agreed to a new pricing system, it would halt iron ore supplies after two weeks.
According to ArcelorMittal CEO Nonkululeko Nyembezi-Heita , Kumba’s decision to halt iron ore supply has “completely undermined the possibility of achieving a final agreement’.
She added the decision was “irrational and economically motivated’ and could put 3,000 to 4,000 jobs at risk.
In addition to the closure of Saldanha, Nyembezi-Heita said ArcelorMittal had initiated plans for the curtailment of all exports and a drastic reduction in domestic market production, resulting in market allocations.
Kumba has demanded that ArcelorMittal pay a price of $50 per tonne for iron ore delivered to the Saldanha plant, and $80/t for for iron ore delivered to ArcelorMittal’s inland facilities.
Nyembezi-Heita said: “While a price of $50/t of lump iron ore for the Saldanha plant was agreed in principle, a suitable price agreement was not settled for ArcelorMittal’s inland facilities.
“At $50/t it would have allowed ArcelorMittal to continue operating the Saldanha plant at around break-even levels, but the pricing demand from SIOC (Sishen Iron Ore Company) for inland facilities is totally unacceptable and would result in the possible closure of these operating facilities.
“I’m very disturbed with Kumba’s decision, as it will have a wider impact on the economy of this country and will result in definite job losses in our business and the downstream industries.’
