ArcelorMittal South Africa has offered to pay R800 million for Imperial Crown Trading (ICT), which holds rights to a 21.4 per cent prospecting stake in Kumba Iron Ore's Sishen Mine.
ArcelorMittal used to own the ICT stake, but lost it last April when it failed to convert it in line with new legislation.
Anglo American subsidiary Kumba owns the remaining mining rights to the Sishen project, which supplies ore to ArcelorMittal at a preferential rate, following an agreement made in 2001.
The companies are now in dispute over whether ArcelorMittal is still entitled to receive iron ore from Kumba at this rate even after its mining rights at Sishen lapsed.
Kumba applied for the remaining rights, but lost out to a bid from ICT.
Kumba is now taking both ICT and the government to court, alleging irregularities in the application and the awarding of the rights. It is thought the case could take up to two years to resolve.
Kumba has said that it had recognised the takeover of ICT by ArcelorMittal was possible, but that it was still an unexpected development.
Opened in 1947, Sishen is Kumba’s flagship operation and one of the largest open-pit mines in the world. It operates 24 hours a day, seven days a week; and in 2008 produced 34 million tons of iron ore.
With a mineral resource of 2,455 million tons, the mine has a life of more than 27 years at the current rate of production.
