Davies fires a shot across Kumba's bow

Trade and Industry Minister Rob Davies says he has means - other than legal - and "plenty of players" willing to produce Shishen Mine's steel at cost plus 3%.

Late on Tuesday evening, Davies effectively fired a shot across the bows of Sishen's owner, Anglo American (AGL) subsidiary Kumba Iron Ore (KIO), as he maintained his long-held view that a 24.1% portion of the mine's output was always earmarked for the development of the local steel industry.

Davies made the remark when answering questions before the Parliamentary Portfolio Committee on Trade and Industry after presenting his department's Industrial Policy Action Plan 2 (IPAP 2). This plan is the industrial and manufacturing component of government's overall economic blueprint, the New Growth Path.

He refused, however, to comment directly on the current court action between Kumba Iron Ore and AcelorMittal SA (ACL).

The Sishen issue arose after ArcelorMittal failed to convert its 21.4% mining right in Sishen, leading Kumba to cancel an annual 6.25 million-ton contract at cost plus 3%.

The government's original position is that this right, bought by ArcelorMittal when state-owned Iscor was unbundled in 2001, came with public developmental obligations that should not fall away merely because ArcelorMittal lost the right.

Davies said on Tuesday night that he would be meeting with Kumba soon.

"It is just a matter of when we are able to arrange a suitable time," he said.

Davies went on to say that he had a number of unspecified options that he would use to get Kumba to change its mind over the cost plus 3% issue.

"I prefer not to disclose those now," he said, when pressed at the end of the meeting.

Davies also said the "other players" were overseas companies that had expressed strong interest in making use of producing steel at cost plus 3%. However, he refused to name them. - I-Net Bridge