This section of the Kumba Iron Ore website has been designed to inform and provide background information relating to Sishen Iron Ore Company’s mineral rights and the developments in this regard.

There are two separate issues both of which are subject to separate legal proceedings. The first relates to Kumba’s iron ore supply agreement with Arcelor Mittal South Africa (“AMSA”), the second relates to prospecting rights which have been granted to Imperial Crown Trading 289 (“ICT”) over the residual 21.4% rights which were not converted by AMSA.

Here you will find background to the two issues, and news and developments from Kumba as they occur. Please see the tool bar above to direct you to the latest developments, and news updates.

Sishen Supply Agreement (in relation to the supply of iron ore from Sishen mine which was concluded in 2001 and which was premised on Mittal owning an undivided 21.4% interest in the mineral rights to iron ore) lapsed as a result of Mittal’s failure to convert its old order mining right and, accordingly, became inoperative in its entirety as of 1 May 2009.

As a result, a dispute arose between SIOC and Mittal, which has been referred to arbitration.

SIOC and AMSA have instituted an interim price until 31 July 2012. AMSA will pay a fixed price of $50 free on rail per ton of lump iron ore for Saldanha Steel and $70 free on rail per ton of lump and fine iron ore for AMSA’s inland plants. AMSA may purchase a maximum monthly amount of 520,000t on a lump:fine ratio of 73:27, including 125,000tpm to Saldanha.

21.4% Mining rights

When AMSA failed to convert its old order mining right, an undivided prospecting right was granted to Imperial Crown Trading 289 (Pty) Ltd (“ICT”) in relation to 21.4% of the Sishen Mine.

SIOC initiated a review application in the North Gauteng High Court on 21 May 2010 which was heard by Judge Raymond Zondo from 15 - 18 August 2011.

Full judgment was handed down on 20 December 2011.

The Judge has ordered that SIOC became, with effect from 5 May 2008, the exclusive holder of a converted mining right for iron ore on Sishen Mine properties. ICT's prospecting right was set aside.