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Johannesburg - Kumba Iron Ore [JSE:KIO] said on Monday it had rejected Imperial Crown Trading's bid to start prospecting for iron ore at its Sishen mine due to a row over South Africa's award of prospecting rights to Imperial.
Kumba, a unit of mining giant Anglo American [JSE:AGL] and the world's 10th largest iron ore producer, has applied for a court review of the granting of 21.4% prospecting rights to Imperial Crown Trading by the department of mining.
A Kumba spokesperson said the company may only consider dropping its court process if the department of mining reverses its decision to award Imperial Crown Trading (ICT) the mining rights and then awards the mining rights to Sishen mine.
"Kumba remains confident of its prospects of success in these applications," a Kumba spokesperson told Reuters.
Kumba said in an earlier email response to Reuters questions that Imperial Trading lawyers had asked Kumba to allow the firm access to its Sishen mine, but that Kumba had turned down the request.
"Kumba's legal advisers have responded that the company will not provide access to the property in the light of the pending review application and are awaiting a response from attorneys," Kumba said.
A Kumba spokesperson said the company was worried it would have no control over ICT's safety standards and that its operations may endanger Sishen mine employees, but it gave no details.
"ICT's prospecting activities may have an environmental impact on Sishen's operations. It would be difficult to separate Sishen's and ICT's obligations in respect of environmental issues pertaining to the same land," the spokesperson said.
The 21.4% mining rights in Kumba's Sishen mine was previously held by ArcelorMittal SA [JSE:ACL].
It entitled the unit of the global steel maker to receive iron ore from Kumba at a discount, but Kumba said ArcelorMittal South Africa had failed to renew the mining rights.
Kumba terminated the long-term deal with the steelmaker and said it would then sell to ArcelorMittal South Africa at market rates from March, but ArcelorMittal South Africa rejected the move and the matter is now under arbitration.
- Reuters
