History
- The Supply Agreement was signed in 2001 when Iscor was unbundled into Iscor Steel and Kumba Resources
- Iscor retained 21.4% undivided mining right to Sishen Mine (held by Iscor under Mining Licence ML 6/2002). 78.6% undivided mining right of Sishen Mine were unbundled to SIOC (held by SIOC under Mining Licence ML 7/2002)
- SIOC agreed to contract mine Iscor’s mining rights on its behalf, and supply 6.25mtpa iron ore to Iscor for its 21,4% mining right; SIOC’s costs were reimbursed and in addition SIOC received a 3% management fee
- A separate supply agreement was signed for the entire production (-+2.5mtpa) from Thabazimbi Mine at cost plus 3%
- In 2002 Iscor was bought and later became Mittal SA
- In 2006 Kumba Resources was unbundled into Exxaro and Kumba Iron Ore - 74% of SIOC remained in Kumba with the balance held by Exarro (20%), the Community (3%) and employees (3%)
- In 2006, SIOC and Mittal started an arbitration process to determine whether or not Mittal was entitled to iron ore from Sishen South expansion at cost plus 3%
- In 2008, SIOC was granted the conversion of its 78.6% old order mining rights (Mining Licence ML 7/2002) into new order mining rights
- By 30 April 2009, the final date for conversion of mining rights, Mittal had not applied for and therefore failed to convert its 21.4% old order mining rights (Mining Licence ML 6/2002). These mining rights lapsed and reverted to the custody of the State
- Acting on the advice from the DMR, SIOC delivered its application on 30 April, on the agreement that the application would be accepted on the first working day thereafter. On 4 May 2009 SIOC’s application was processed as accepted by the DMR
- 1 May 2009, SIOC applied for the lapsed mining rights and on 4 May 2009 SIOC’s application was accepted
- 15 May 2009, DMR informed SIOC that it had accepted its application and that there was a competing application
- 2 June 2009, DMR informed SIOC that the competing application was that of ICT
- 19 June 2009, SIOC objected against the DMR’s decision to accept receipt of the ICT prospecting application. To date SIOC has had no response to this objection
- 28 October 2009, Sishen South arbitration award was granted in SIOC’s favour, determining that Mittal was not entitled to participate in Sishen South
- 30 November 2009, Kumba attended a meeting at the DMR but was not informed of the decision to grant the prospecting right to ICT made on the same day
- 4 February 2010, following several follow-up requests from SIOC, the DMR informed SIOC that 21.4% of the undivided prospecting rights over Sishen Mine had been awarded to ICT
- 5 February 2010, SIOC informed Mittal that as a result of the lapse of its mining rights, the obligation to supply iron ore at cost plus 3% no longer existed
- 25 February 2010, Kumba proposed a long term price and an interim pricing arrangement to Mittal
- 1 March 2010, SIOC lodged an appeal with the DMR against the award of the prospecting rights to ICT. To date this appeal remains unanswered
- 2 March 2010, Mittal agreed to follow the dispute resolution process and agreed to negotiate an interim pricing arrangement which is still under discussion
- 17 March 2010, Kumba issued a SENS announcement regarding the grant of the prospecting rights to ICT
- 22 March 2010, the DMR announced an internal review of the ICT award
- 19 April 2010, in a SENS announcement, Kumba indicated that:
- SIOC had notified Mittal that the supply agreement had become inoperative in its entirety as of 1 May 2009
- SIOC had invoiced Mittal for deliveries during March, requesting Mittal to pay cost plus 3% to Kumba and the balance into an escrow account
- SIOC had served a Statement of Claim on Mittal, initiating the Arbitration process
- 4 May 2010, in a SENS, SIOC indicated that it had advised ArcelorMittal that should the parties not come to a firm agreement on an interim pricing mechanism in the near future, SIOC will review the basis upon which it will continue to supply iron ore to ArcelorMittal.
- 21 May 2010, SIOC, in order to protect its interests and to avoid prescription (under PAJA), initiated a Review application in the North Gauteng High Court in relation to the decision of the DMR to grant a prospecting right to Imperial Crown Trading
- 27 May 2010, SIOC made a revised interim arrangement proposal to Mittal
- 22 July 2010, SIOC and Mittal announced an interim pricing agreement from 1 March 2010 to 31 July 2010.
- 17 August 2010 DMR upholds award of prospecting rights to ICT, SIOC continues in its belief that its opposition to the award is justified.
- August 2010
- Kumba filed supplementary affidavit in the review, based on Record received from the State Attorney
- Mittal filed its Statement of Defense in the arbitration
- September 2010, Mittal nominated and appointed its arbitrator.
- October 2010, SIOC filed further supplementary affidavit for Review, based on expanded Record of Decision received
- November 2010
- Third arbitrator appointed
- SIOC filed its replication for the arbitration (SIOC’s response to Mittal’s Statement of Defense)
- 22 November 2010, Kumba calls for undertaking from State and ICT that no application will be made for a mining right and that no mining right will be granted, pending the review hearing by High Court.
- 30 November 2010, State Attorney states that no undertaking will be given.
- 8 December 2010, ICT statesthat no undertaking will be given.
- 9 December 2010, ICT applies for 21.4% mining right.
- 14 December 2010, SIOC launches interim interdict proceedings pending the High Court Review (SIOC not advised at that time that ICT had applied).
- 23 December 2010, DMR accepts ICT application.
- 9 Dec - ICT applied for a mining right
- 14 Dec – Lazarus Zim resigned as Chairman of Kumba
- 23 Dec – DMR accepted ICT’s application for a mining right
- SIOC formally invited AMSA to join the Review as a Respondent
- 12 January 2011, DMR informs SIOC that ICT application has been accepted.
- 21 January 2011, Notice of Appeal launched by SIOC against the acceptance of an application for a mining right by ICT.
- 25 January 2011, DMR’s letter of refusal to grant SIOC the mining right in respect of the 21.4% received
- 26 January 2011, SIOC lodged a further application to be granted the 21.4% undivided rights.
- 27 January 2011, DMR filed incomplete answering affidavits.
- 4 February 2011, SIOC applied to join AMSA in review proceedings.
- 16 February 2011, Date for hearing of review established: 15 August 2011.
- 22 February 2011, ICT filed answering affidavit.
- 24 February 2011, SIOC lodged appeal against rejection of its May 2009 application
- March, AMSA answering affidavit filed
- 17 May 2011, SIOC and AMSA agree to extend current interim pricing agreement to July 2012
- 27 May 2011, SIOC to file supplementary affidavit
- June 2011, AMSA joined in High Court Review as 2nd applicant
- 15 - 18 August 2011, Open High Court Review hearings
- 9 December 2011, Kumba and AMSA agree to postpone arbitration until mineral rights dispute resolved
- 15 December 2011, Partial Judgment handed down
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