Thursday, 15 Dec 2011
It is reported that a South African court will rule tomorrow on whether the state was correct to award a prospecting right over the country's largest iron ore mine to a company whose owners include a business partner of President Mr Jacob Zuma's son.
ArcelorMittal South Africa Limited in June 2011 joined Anglo American Plc unit Kumba Iron Ore in asking the North Gauteng High Court in Pretoria to overturn the award of a 21.4% right at the Sishen iron ore mine, previously held by ArcelorMittal South Africa, to closely held Imperial Crown Trading 289 (Pty) Limited. ICT's owners include Mr Jagdish Parekh, a business partner of Mr Zuma's son, Mr Duduzane. Kumba holds the rest of the Sishen right through Sishen Iron Ore Co, which is partly owned by Exxaro Resources Limited.
Mr Mohamed Kharva, an analyst at Nedgroup Securities Limited, said that "It will go against anyone’s logic if ICT gets the right."
ArcelorMittal South Africa's Sishen right lapsed after the Vanderbijlpark based steelmaker failed to apply for a license by April 30th 2009 to satisfy a change in legislation. Its failure to convert the permit led Pretoria based Kumba to cancel a nine year agreement to supply iron ore from Sishen at below-market prices to the steelmaker, saying it was linked to the mining right. That agreement is under a separate arbitration process.
Ownership of South Africa's mineral resources, previously held by mining companies or private landowners, reverted to the state when the new mining legislation was enacted in 2004 and is now allocated to companies by government officials on a first come, first serve basis.
(Sourced from www.bloomberg.net)
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