[miningmx.com] — ARCELORMITTAL SA (Amsa) on Monday fired the first salvo in Pretoria’s High Court hearing over a 21.4% mineral right in Sishen mine, arguing the Mineral and Petroleum Resources Act (MPRDA) didn’t provide for the granting of fractional rights.
Amsa Senior Counsel, Michael Kuper, argued before Judge Raymond Zondo in the North Gauteng High Court that “… the issue is whether the converted mining right granted to Sishen Iron Ore Company (SIOC, a subsidiary of Kumba Iron Ore) on May 5, 2008 was in respect of 100% of the right to mine iron ore on the SIOC properties”.
“What was the content of the grant forms the basis of the divergence among parties,” Kuper said. “A mining right shouldn’t be confused with an interest.
“Amsa does not contend that a mining right under the MPRDA cannot be held in undivided shares.
“SIOC and the respondents argue that a permissible grant of a mining right includes the grant of some fractional percentage of a mining right so that separate rights can be granted in respect of the same mineral and land.
“Amsa refutes any such possibility which, it says, is contrary to the wording of the statute; is incapable of being carried into effect; and is contrary to judicial pronouncement.”
Kuper said the MPRDA defined a mining right as a “limited real right” in respect of the mineral and the land to which it relates. The holder of the right is entitled to enter the land and prospect, or mine, for his own account.
“None of these entitlements are capable of being exercised in a certain percentage (less than 100% only). It is incompetent in law and absurd, in fact, to suggest that there could be 78.6% “right” to mine. It was not possible in terms of the common law (old order) and it is not possible under the MPRDA”.
Should Zondo eventually rule in Amsa’s favour, the steelmaker would have a compelling argument to claim Kumba should continue to supply it with iron ore at cost us 3%, based on a supply agreement concluded at the unbundling of Iscor.
Kumba previously said the supply agreement had lapsed when Amsa failed to renew its 21.4% old order rigbt in Sishen. The DMR had granted the 21.4% to ICT, a decision with which both Kumba and Amsa disagree.
Kuper also accused SIOC and the state of negotiating in private to amend the grant, to expressly state it was partially granted.
“We draw the court’s attention to these negotiations,” Kuper said, adding the talks were abandoned on Amsa’s request until the court case has concluded.
