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Pretoria - The government will lay criminal charges against
Kumba Iron Ore [JSE:KIO] over its application for a mining right over the company’s
Sishen mine it did not yet own, a lawyer for the department of minerals
resources said on Wednesday.
Willie Vermeulen, a lawyer for the department, told the North Gauteng High Court in Pretoria that more details on the charges would be provided later.
A Kumba spokesperson said the group - a unit of global miner Anglo American [JSE:AGL] - would comment on the matter later.
The state's move is the latest twist in a tale that has
unnerved investors and led to allegations of graft and political favouritism in
the resource-rich country.
Shares in Kumba extended losses after the news and the stock
was trading 1.11% lower at R451.92.
Disputes over mineral rights have highlighted transparency
and governance issues after some had been awarded to people linked to
high-ranking officials, sometimes over areas that were already being mined.
The dispute in court, which is at the heart of an ongoing
battle between Kumba and the South African unit of steel giant ArcelorMittal SA
[JSE:ACL], could further unnerve mining companies in the top producing country
for platinum and ferrochrome and a major supplier of gold and iron ore.
Kumba has challenged the state's award of a prospecting
right over a stake in Kumba's Sishen mine to little-known yet politically
connected Imperial Crown Trading (ICT).
Kumba's allegations of fraud and corruption led last month to an unprecedented raid of the minerals ministry by the Hawks, which analysts interpreted as signalling serious flaws within a key government department.
Vermeulen said Kumba had tried to manipulate the system to
gain advantage by filing its application early, even before the the previous
holder's right had expired, and asking officials to change the date on its bid
so it would be considered first.
"What is this other than a resolution to mislead?" he told the court.
