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Pretoria - A judge said on Thursday that a company with no mining experience
and business links with President Jacob Zuma’s son could not keep mineral
prospecting rights it was controversially awarded.
Kumba Iron Ore [JSE:KIO] a unit of global miner Anglo American [JSE:AGL] had challenged the state’s award of a prospecting right over a stake in Kumba’s Sishen mine to little-known Imperial Crown Trading (ICT).
ICT immediately signalled it would appeal.
Kumba Iron Ore [JSE:KIO] a unit of global miner Anglo American [JSE:AGL] had challenged the state’s award of a prospecting right over a stake in Kumba’s Sishen mine to little-known Imperial Crown Trading (ICT).
The government previously awarded Imperial Crown Trading the right to
prospect for minerals at a mine operated by Kumba Iron Ore.
ArcelorMittal South Africa [JSE: ACL] had allowed the right to lapse, putting
in jeopardy a multi-billion rand supply deal it had with Sishen that allowed it
to source iron ore cheaply.
Judge Raymond Zondo also said he agreed with ArcelorMittal’s
contention that Sishen held 100% and that it was not open for anyone to
apply for the stake.
“The judgment of the high court serves to confirm our view that
Sishen remains obliged to supply 6.25 metric tonnes of iron ore to us at cost
plus 3% in terms of our agreement,” ArcelorMittal said in statement.
ArcelorMittal’s share price soared over 5% after the
verdict.
ICT immediately signalled it would appeal.
“Certainly we will appeal, we don’t agree with the judgment, it’s
contrary to what we have been contending all along,” ICT lawyer Ronnie Mendelow
told journalists after the ruling.
