JOHANNESBURG (miningweekly.com) – The Department of Trade and Industry- (DTI-) facilitated mediation process between ArcelorMittal South Africa (Mittal) and Kumba Iron Ore regarding an interim iron-ore pricing and supply agreement remains ongoing.

Trade and Industry Minister Dr Rob Davies appointed a mediator to facilitate the process, aimed at agreeing on the terms and conditions on which Sishen Iron Ore Company (SIOC) would supply iron-ore to Mittal after December 31 and until the finalisation of the arbitration process regarding the status of the 2001 6.25-million-ton-a-year supply agreement.

In August, Mittal and Kumba agreed to extend an interim pricing arrangement from the end of July to the end of December, under which SIOC would sell 1.5-million tons of iron-ore to the steelmaker at a weighted average price of $65/t.

The DTI said in a statement that the main objective of the mediation process was to find an agreement, which ensured continuation of iron-ore supply and steel production in the economy and that any short-term agreement would not be at the expense of long-term arrangements.

Kumba cancelled the original supply agreement in early 2010 on the basis that Mittal was no longer an owner of 21.4% of the Sishen iron-ore mine, in the Northern Cape, after its failure to convert its rights in line with South Africa’s mining legislation. Under the previous arrangement, it is estimated that Mittal paid $30/t for iron-ore from the mine.

To subscribe to Engineering News's print magazine email subscriptions@creamermedia.co.za or buy now.