Kumba Iron Ore Ltd. (KIO.JO) Friday said allegations made by the former deputy director-general of South Africa's Department of Mineral Resources regarding disputed mineral rights to the Sishen iron ore mine are "incorrect and irrelevant."

Former deputy director general Jacinto Rocha in a dossier seen by Dow Jones Newswires said Kumba was "manipulating the administrative system to gain advantage and gratification" in regards to gaining rights to the mine previously held by ArcelorMittal South Africa Ltd. (ACL.JO), majority owned by largest steelmaker ArcelorMittal (MT).

Rocha's comments are the latest in a series of tense exchanges following ArcelorMittal's loss in April 2009 of the 21.4% stake in Sishen, majority owned by Kumba. The stake was then awarded to a third party, Imperial Crown trading, although Kumba has initiated a court review of that decision.

Rocha supports the DMR's decision to award the stake to Imperial Crown Trading for a prospecting right over Kumba's mining right application. In addition, he said Kumba, a unit of Anglo American PLC (AAL.LN), acted wrongly in its application process.

Kumba submitted its application April 30 2009, the last day of ArcelorMittal's ownership, and asked officials at the DMR to time stamp the papers for the following day, a public holiday.

"SIOC [Sishen Iron Ore Company] asked for and took advice from officials in the DMR to ensure that its application could be lodged at the earliest possible opportunity after May 1 [a public holiday]--like giving a post-dated check," Kumba said in a statement.

Rocha says he didn't give such advice and that it is wrong to stamp the papers for a different day.

"These statements and revelations would validate our belief that Kumba acted in bad faith," said Nonkululeko Nyembezi-Heita, chief executive officer at ArcelorMittal South Africa. "As our mining partner over the past decade we had expected them to behave honorably in the spirit of that partnership."

Rocha left the DMR at the end of February this year and could be pulled in to the court proceedings given his involvement in the decision. He currently is a mining consultant and did work for ArcelorMittal for a few months ending this June.

Kumba had a deal with ArcelorMittal to mine iron ore at Sishen and then sell a set amount to ArcelorMittal each year at cost of production plus 3%. Following ArcelorMittal's loss of rights Kumba said it wasn't economically feasible to continue selling at that rate.

Last month the two settled on an interim price agreement while the court review continues. Sishen supplies about two-thirds of ArcelorMittal's iron ore each year.

Earlier this month ArcelorMittal South Africa said it agreed to acquire Imperial Crown Trading in a move to reclaim the lost stake. The company lost the stake because it failed to convert its rights by the April deadline to conform to new legislation.

The steel maker plans to acquire ICT through its wholly owned subsidiary OPCO, for 800 million rand [$111 million] in cash, subject to due diligence and ICT's ability to convert prospecting rights over Sishen into mining rights.

-By Devon Maylie; Dow Jones Newswires; (4420) 7842 9483; devon.maylie@dowjones.com
Grafico Azioni Arcelor Mittal (NYSE:MT)
Storico
Da Giu 2024 a Lug 2024 Clicca qui per i Grafici di Arcelor Mittal
Grafico Azioni Arcelor Mittal (NYSE:MT)
Storico
Da Lug 2023 a Lug 2024 Clicca qui per i Grafici di Arcelor Mittal