ArcelorMittal South Africa (Mittal) and Kumba Iron Ore will announce the outcome of negotiations on an interim supply agreement, which is due to expire on July 31, by next Wednesday.

Mittal CE Nonkululeko Nyembezi-Heita would not be drawn on whether the supply arrangement, which had already been extended once in light of ongoing legal processes, would be rolled over, or altered.

However, the steel company had indicated previously that it would be seeking improved terms, in light of a North Gauteng High Court ruling in its favour in December relating the status of mineral rights at the Sishen iron-ore mine, in the Northern Cape.

Under the prevailing interim agreement, iron-ore was being supplied to the Saldanha works at a fixed price of $50/t free on rail and a fixed price of $70/t to Mittal’s inland facilities. Under the previous arrangement, which Kumba ‘terminated’ from March 1, 2010, it is estimated that Mittal was paying around $30/t.

Nyembezi-Heita added that it had received news that a tentative date of November had been set for a Supreme Court of Appeal review of the matter, which had been taken on appeal by Imperial Crown Trading (ICT).

Therefore, it was hoping that the dispute, as well as the outstanding arbitration process, which had been delayed to allow for the legal processes to be finalised, could be concluded by mid-2013.

In December, Judge Raymond Zondo concurred with Mittal’s assertion that the Sishen Iron Ore Company had converted 100% of the rights at the Northern Cape operation and that the Department of Mineral Resources had, thus, acted incorrectly by granting a prospecting right over a portion of Sishen to ICT.

The Supreme Court of Appeal had been asked to apply its mind to the matter and once its judges had ruled, arbitration proceedings between Kumba and Mittal over the future of a supply agreement for 6.25-million tons a year of Sishen material would commence.

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