[miningmx.com] — ARCELORMITTAL SA (Amsa) and Kumba Iron Ore have put the arbitration process over the supply of iron ore from Sishen on hold, saying it would only continue once the court proceedings over the disputed mineral right in the mine was finalised.
The arbitration proceedings were scheduled for May 2012.
“ArcelorMittal and (Sishen) have agreed that it is not possible for the arbitration to proceed prior to the finalisation of the High Court proceedings,’ read an Amsa statement issued on Friday.
The North Gauteng High Court would hand down judgment on Thursday on Kumba’s application to have the 21.4% prospecting right in Sishen awarded to Imperial Crown Trading 289 set aside. Sishen has also sought a declaratory ruling to the effect that it was the only entity capable of applying for and being granted the 21.4% new order right in Sishen.
For its part ArcelorMittal contends that Kumba was awarded a 100% mineral right in Sishen, and that its erstwhile agreement to be supplied 6.25 million tonnes ore per year at cost plus 3% was unrelated to the ownership of the mineral right.
“If this issue is determined in ArcelorMittal’s favour in the High Court proceedings, it will effectively.render the arbitration academic,’ said Amsa.
It also warned the legal dispute could still take a year or more to be resolved.
“There is a real prospect that, having regard to the importance of the matters in issue, the unsuccessful parties will apply for leave to the Supreme Court of Appeal who will be required to determine the highly complex, legal and factual issues which have arisen in these proceedings,’ read Amsa’s statement, adding such a hearing would likely take place before the end of 2012.
A Kumba spokesperson told Miningmx that the interim supply agreement between the parties would remain in place, for now, until it expires end-July. According to this agreement, Kumba would supply Amsa with ore despatched to the steel group’s inland steel mills at $70/t, and $50/t for material destined for Saldanha in the Western Cape.
The spokesperson said the parties would again have to negotiate the interim supply arrangement once it expired – the postponement of the arbitration process didn’t by implication extended the interim deal.
Kumba also disagreed with Amsa’s assertion that should the Court find in the steel maker’s favour, that the arbitration process would become irrelevant, saying the two proceedings were separate matters.
