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Court rules in favour of Sishen

Mar 28 2013 16:00 Reuters, I-Net Bridge

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Johannesburg - The Supreme Court of Appeal has ruled that Sishen Iron Ore Company has the exclusive right to mine iron ore at the Sishen Mine.

The court dismissed appeals by the Department of Mineral Resources and Imperial Crown Trading regarding the grant of a prospecting right to the latter to mine at Sishen.

On 15 December 2011‚ the North Gauteng High Court in Pretoria ruled that‚ when the department of mineral resources effected a conversion of Sishen Iron Ore's old order mining right in 2008‚ Sishen was granted the exclusive right to mine at the Sishen Mine‚ and accordingly no other party could be granted the right to mine iron ore or quartzite at the Sishen Mine.

The High Court therefore reviewed and set aside the grant of the prospecting right to Imperial Crown Trading. Each of Imperial Crown Trading and the department of mineral resources were separately granted leave to appeal against the decision‚ which they did.

However‚ on Thursday‚ the Supreme Court of Appeal dismissed both appeals‚ holding that Sishen lodged its application for conversion of its old order right in 2005.

The court held that the department of mineral resources granted to Sishen the exclusive mining right in 2008. The court further held that ArcelorMittal South Africa retained the right to lodge its old order right (21.4% undivided share) for conversion before midnight on 30 April 2009‚ but failed to do so.

As a matter of law and as at midnight on 30 April 2009‚ Sishen became the sole holder of the mining right to iron ore in respect of the Sishen Mine‚ after ArcelorMittal SA failed to convert its undivided share of the old order mining right.

This means that Sishen has the exclusive right to mine iron ore at the Sishen Mine‚ the court found.

As a further consequence of this finding‚ the court upheld the High Court ruling setting aside the prospecting right granted by the department of mineral resources to Imperial Crown Trading.

It had been agreed between Sishen and ArcelorMittal SA that the arbitration proceedings relating to the inoperative Sishen Supply Agreement would be stayed pending the final resolution of the mining rights dispute. No date for this arbitration has yet been agreed.

In the interim‚ the sale of iron ore from the Sishen Mine to ArcelorMittal SA remains regulated in terms of the Interim Pricing Agreement concluded between the parties in December 2012.

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sishen  |  kumba  |  anglo amercian  |  mining  |  iron ore


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