Anglo American subsidiary Kumba Iron Ore reported last week that it was considering the legal and practical implications of the conditions proposed by the Department of Mineral Resources (DMR) in relation to an amendment of the Sishen Iron Ore Company’s (SIOC’s) mining right.

Kumba confirmed that it had received notice that the DMR’s director-general had consented to an amendment granting, with conditions, SIOC the residual 21.4% undivided share of the mining right for the Sishen mine, in the Northern Cape – SIOC already holds 78.6% of the mine.

The 21.4% share, initially held by ArcelorMittal South Africa, had been the subject of a long- running legal dispute, which arose in 2010 after the DMR controversially granted the right to a politically connected entity known as Imperial Crown Trading (ICT).

In December 2013, the Constitutional Court ultimately ruled that the residual 21.4% undivided share remained available for allocation by the DMR, but that, based on the provisions of the Mineral and Petroleum Resources Development Act, only SIOC could apply, which it subsequently did.

Kumba told shareholders it was currently considering the terms of the consent to amend SIOC’s mining right, which was subject to a number of conditions, described by the DMR as “proposals”.

“Once Kumba and SIOC have had an opportunity to engage fully with the DMR in this regard and consider the precise meaning and scope of the proposed conditions, shareholders will be updated as appropriate,” the company said in a statement, adding that shareholders should exercise caution when trading in Kumba shares.

Kumba spokesperson Nikki Wetzlar told Mining Weekly that the talks between the DMR officials and senior Kumba executives were ongoing, but that she was unable to provide a timeframe for their conclusion.

Kumba aimed to resolve the areas of uncertainty without resorting to the courts, but it would keep its legal options open.

No details were shared as to the nature of the proposed conditions.