Anglo's American's Kumba Iron Ore to Object to ICT Mine Right Application

By Carli Lourens - Jan 14, 2011

Kumba Iron Ore Ltd., a unit of Anglo American Plc, said it will object to South Africa’s acceptance of an application by Imperial Crown Trading Ltd. for a 21.4 percent mining right at its Sishen mine in South Africa.
The application was submitted on Dec. 9 and accepted on Dec. 23, Pretoria-based Kumba said in a statement today. The acceptance means the application will now be evaluated before a decision is made about granting the mining right, Kumba said.
The company, the world’s fourth-largest supplier of seaborne iron ore, is already challenging the government’s earlier award of a partial prospecting right over the mine to Imperial in the North Gauteng High Court in Pretoria. Imperial’s owners include Jagdish Parekh, who is investing in ArcelorMittal South Africa Ltd. together with South African President Jacob Zuma’s son, Duduzane.
“This means that this whole issue that we had hoped would have been put to bed already is just carrying on,” Ron Klipin, an analyst at SA Stockbrokers, said by phone from Johannesburg.
Kumba’s Sishen Iron Ore Co. “does not believe that it was lawful for the Department of Mineral Resources to have accepted ICT’s application, pending the High Court Review initiated in May 2010, over the prospecting right awarded to ICT,” it said.
Appeal the Decision
SIOC, part-owned by Exxaro Resources Ltd., is in the process of objecting to the application and will launch an appeal against the decision, Kumba said.
ArcelorMittal South Africa, controlled by the world’s largest steelmaker, previously held the partial right over Sishen mine, facilitating iron ore supplies at below-market prices. Iron ore is a steelmaking ingredient.
Kumba Chairman Lazarus Zim resigned last month to avoid a conflict of interest as he sets up a steel company to rival ArcelorMittal South Africa. Zim had earlier excluded himself from board decisions over Kumba’s Sishen deposit because of his relationship with ICT’s Parekh. Parekh’s mobile phone was switched off when Bloomberg News called seeking comment.
Zingaphi Jakuja, spokeswoman for the Department of Mineral Resources, said she couldn’t immediately comment when Bloomberg News contacted her on her mobile phone.
Kumba was unchanged at 450 rand at the 5 p.m. close in Johannesburg, giving it a market value of 145 billion rand ($21 billion).
ArcelorMittal, based in Luxembourg, is the world’s largest steelmaker.

Source: Bloomberg