(Updates with ArcelorMittal comment in second paragraph.)
June 6 (Bloomberg) -- ArcelorMittal South Africa Ltd., a unit of the biggest steelmaker, won court approval to join Kumba Iron Ore Ltd.’s legal bid to reverse the state’s award of rights over the Sishen iron-ore mine to Imperial Crown Trading 289 Ltd.
“ArcelorMittal has a direct and substantial interest in the pending review and interdict proceedings,” the company said in an e-mailed statement today. “It is both necessary and convenient that it be joined as a party.”
Kumba, based in Pretoria, is asking the nation’s High Court to set aside the government’s award of prospecting rights last year to Imperial, whose owners include Jagdish Parekh, a business partner of South African President Jacob Zuma’s son Duduzane. ArcelorMittal, based in Vanderbijlpark, lost rights over 21.4 percent of Sishen after failing to renew the title.
The steelmaker was also approved to join an application by Kumba to stop South Africa granting mining rights to Imperial.
Kumba canceled an agreement to supply iron ore from Sishen at below-market prices to ArcelorMittal South Africa after it lost the title. The mining company, controlled by Anglo American Plc, said in August those rights should be awarded to its Sishen Iron Ore Co. unit, part-owned by Exxaro Resources Ltd.
ArcelorMittal South Africa claims Kumba wasn’t entitled to cancel their iron-ore supply contract, and said last year that the withdrawal from the agreement would cost 26 billion rand ($3.85 billion). Kumba had supplied 6.25 million metric tons a year from Sishen mine to the steelmaker. ArcelorMittal expects arbitration with Kumba on the accord to begin early next year.
The court decision means “some of the detail that would have been covered in the arbitration will now be dealt with in the High Court,” Kumba said today in an e-mailed response to a query, adding it’s satisfied with the ruling. “This will narrow the focus of the arbitration which will be bound by any ruling made by the High Court.” The hearing begins Aug. 12, it said.
ArcelorMittal South Africa said it’s still studying a possible acquisition of Imperial and a deal giving black investors including Duduzane Zuma a stake in the steelmaker.
--Editors: Tony Barrett, John Viljoen
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