ArcelorMittal, one of the world’s major steel producers have bought Imperial Crown Trading (ICT) for R800m that will yet again put another twist in the competition for Kumba’s Sishen iron ore mine.
ArcelorMittal CEO Nonkululeko Nyembezi-Heita said in a statement that, “whilst we continue to vigorously pursue our arbitration with Kumba Iron Ore Limited, we feel our acquisition of ICT is a prudent decision based on strong commercial grounds given that vertical integration is a crucial component of ArcelorMittal South Africa’s ability to remain competitive.”
The deal seems to be part of a greater BEE transaction which will put 26% of ArcelorMittal into the hands of the Ayigobi consortium as well as 8,500 ArcelorMittal employees.
Nyembezi-Heita said the shareholders of ICT have been included, “inter alia as participants in the Ayigobi consortium”.
That consortium is led by Sandile Zungu while its participants include Oakbay Investments – which is owned by the Gupta family – and Jagdish R Parekh who is a substantial shareholder in ICT.
Zungu, the Gupta family and Parekh are all believed to be very well connected politically to the present government.
ICT was awarded a prospecting right by the Department of Mineral Resources (DMR) in respect of a portion of the Sishen mine following ArcelorMittal’s failure to apply to convert its old order mining rights.
Kumba has taken legal action against the DMR over its decision and has refused ICT access to the mine.
According to the review application lodged by Sishen Iron Ore Company – SIOC which is the Kumba operating subsidiary running the Sishen mine – there are fourteen grounds of appeal.
One of them is that ICT’s completed application for the rights was lodged several days after that of SIOC.
A Kumba spokesperson commented, “we are not commenting on the deal now announced between ArcelorMittal and ICT.
“Kumba will continue to pursue its legal avenues. We believe the prospecting right was incorrectly awarded to ICT by the DMR which incorrectly accepted and granted the application in which there were irregularities.
“The legal action over the iron ore supply contract with ArcelorMittal is not affected by this deal so the arbitration proceedings will also go ahead.”
Source – MiningMix
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
Tue, Aug 10, 2010
News