Mittal hammered by wary traders

Johannesburg - ArcelorMittal SA (Amsa) [JSE:ACL] plummeted nearly a quarter in its first hour's trade on the JSE on Wednesday, after it committed itself to renegotiate an iron ore contract with Kumba Iron Ore [JSE:KIO].

Amsa lifted the self-imposed suspension on the trading of its shares on Wednesday afternoon. The counter was trading at 9 000 cents per share at 15:40, down 22.86%.

This followed last week's cancellation of an agreement by Kumba Iron Ore, the operator of the Sishen mine, to supply ore to Amsa at cost plus 3%.

In a statement, Amsa said the parties had begun a dispute resolution process "in accordance with the provisions of the supply agreement, which includes arbitration, to resolve the dispute".

The statement added that both parties were in agreement that the process would be expedited.

"An interim arrangement is being considered and negotiated following receipt of a proposal from Sishen Iron Core Company on the terms of short-term iron ore supply," Amsa said.

It said that Sishen would continue to supply iron ore to Amsa and the situation with Thabazimbi Iron Ore Mine remained unaffected by the process.

"Amsa has considered the assertions made by Sishen Iron Ore Company relating to the mineral rights," the steel maker said.

"Nevertheless, the company remains of the firm opinion that the long-term supply agreement remains valid and binding and will take all steps necessary to protect its shareholders in this regard."

- Fin24.com & I-Net Bridge