ArcelorMittal South Africa has won the right to join Kumba Iron Ore as an applicant in the fight against a decision by the Department of Mineral Resources (DMR) to award prospecting rights at the Sishen mine to politically connected Imperial Crown Trading (ICT).
The North Gauteng High Court yesterday granted the steel producer permission to join Kumba as co-applicant to have the DMR’s decision declared null and void.
ICT is the current holder of prospecting rights for ArcelorMittal SA’s previous 21.4 percent portion of the Sishen mine. ArcelorMittal SA and Kumba together held mining rights at Sishen, and this allowed the steel maker to buy iron ore at cost plus 3 percent, but the company failed to renew its right last April.
Kumba put in a bid for the right, but it was awarded to ICT, in which Jagdish Parekh holds 50 percent, reportedly on behalf of JIC Mining, of which he is chief executive. Duduzane Zuma, President Jacob Zuma’s son, is a JIC shareholder and the company is controlled by Zuma benefactors the Gupta family.
ArcelorMittal SA last year announced an R800 million deal to acquire ICT, subject to a due diligence into how ICT secured the Sishen rights.
ArcelorMittal SA spokesman Themba Hlengani said: “We are pleased that the high court has recognised that ArcelorMittal SA has a direct and substantial interest in the pending review and interdict proceedings and that it is both necessary and convenient that it be joined as a party.”
He said the ICT acquisition was still under consideration.
A Kumba spokeswoman said yesterday that ArcelorMittal SA’s inclusion did not affect Kumba’s challenge. It would boil down to which legal argument was correct.
“Kumba is arguing that there are residual rights of 21.4 percent and that these should be awarded to Sishen Iron Ore Company (a unit of Kumba). ArcelorMittal SA is arguing that there are no residual rights and that 100 percent of the rights should have been converted in 2008,” she said. - Business Report
