Fin24

Kumba, Amsa yet to agree on iron deal

2012-08-01 10:30

Johannesburg - Iron ore miner Kumba Iron Ore [JSE:KIO] said on Wednesday it had yet to agree with ArcelorMittal SA [JSE:ACL] on extending a pricing deal that expired this week.

Kumba, a unit of global miner Anglo American [JSE:AGL], said it would continue to supply ArcelorMittal's South African arm with iron ore on terms currently being discussed between the two, without disclosing the terms.

Kumba in 2010 suspended its agreement to supply the unit of the world's top steelmaker with iron ore at a discount. The suspension came after ArcelorMittal allowed a partial mining right it held in Kumba's Sishen mine to lapse.

Kumba now wants market prices for the ore, although ArcelorMittal insists the preferential deal still stands.

Until an arbitration hearing resolves the dispute, the companies had agreed an interim supply deal that expired on July 31, under which ArcelorMittal paid a fixed price of $50 per tonne for ore for its Saldanha plant and $70 per tonne for its inland plants.

ArcelorMittal has said it was confident the arbitration hearing would rule in its favour, although it may take until next year to resolve the dispute. The company had paid R1.1bn more for iron ore in 2011 due to the dispute.