By Alex MacDonald
LONDON--South Africa's Constitutional Court Thursday upheld
Kumba Iron Ore Ltd.'s (KIO.JO) right to apply for the remaining
stake it doesn't already own in Sishen, South Africa's largest iron
ore mine, after ArcelorMittal (MT) forfeited its rights in
2009.
The ruling ends a bitter dispute which began when ArcelorMittal
forfeited its 21.4% stake in the mine as it failed to convert its
old mining rights on time. South Africa's Department of Mineral
Resources then granted ArcelorMittal's forfeited mining rights to a
small, politically-connected company called Imperial Crown Trading,
a move which was contested by Kumba, the owner of the remaining
78.6% stake in Sishen. Kumba claimed that it was the only company
that had the right to apply for the stake.
South Africa's Supreme Court ruled in favor of Kumba in March of
this year but the DMR and Imperial Crown Trading appealed the
decision to the constitutional court a month later.
The constitutional court ruled on Thursday that as a consequence
of ArcelorMittal's failure to convert its old mining rights, the
21.4% stake remained available for allocation by the DMR. But it
noted that only Kumba had the right to apply for rights over the
stake, in accordance to the country's mining code.
Kumba, which is majority-owned by Anglo American PLC (AAL.LN),
applied for the residual stake in January 2011 and will now wait to
hear from the DMR about the state of its application, a Kumba
spokesman said.
Kumba and ArcelorMittal also in November resolved a
long-standing dispute over an iron ore pricing agreement that was
called into question once ArcelorMittal lost its stake in the
Sishen Mine.
Write to Alex MacDonald at alex.macdonald@wsj.com
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