London 3 September (Argus) — South Africa's Constitutional Court will shortly rule on the disputed ownership of a minority share in the Sishen iron ore mine.
The Department of Mineral Resources and South African firm Imperial Crown Trading (ICT) are today submitting a final appeal against a previous decision refuting ICT's stake in Sishen.
Under an apartheid-era deal, Luxembourg-based steelmaker ArcelorMittal held a minority stake in the mine and received iron ore from operator Kumba, a subsidiary of London-listed Anglo American, at below market prices to support domestic industry. Kumba claims the deal expired, which ArcelorMittal disputes, but then the department controversially awarded the minority share to third-party ICT. The trading firm's rights at Sishen have since been refuted, firstly by the North Gauteng High Court and then by the Supreme Court of Appeal. Today's Constitutional Court hearing is ICT's final appeal, and the session is expected to be concluded in 1-2 days.
Following the ruling, Kumba and ArcelorMittal are expected to resume their arbitration over the Sishen iron ore supply contract. Kumba was originally committed to providing ArcelorMittal with iron ore at cost price plus 3pc. But interim supply agreement which has been renegotiated annually has been in place since 2009, with prices maintained below market levels. This year's deal comprised a weighted-average price of $65/t for 4.8mn t of iron ore.
Sishen produced 38.9mn t of iron ore in 2011, and 16.1mn t in the six months to 30 June this year.
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