South Africa's Department of Mineral Rights has awarded an Anglo American unit full mining rights at the Sishen iron ore mine, after a minority stake earlier held by ArcelorMittal South Africa (AMSA) was transferred.
Sishen Iron Ore Co (SIOC) -- owned by Kumba Iron Ore, itself a subsidiary of Anglo American -- was granted the residual 21.4% stake of the mining right, following an internal appeal with the DMR.
"As a result of the grant of the residual 21.4% undivided share, SIOC is now the sole and exclusive holder of the right to mine iron ore and quartzite at the Sishen mine," Kumba said in a statement. "This residual mining right will be incorporated into the 78.6% Sishen mining right that SIOC successfully converted in 2009."
Kumba's main Sishen opencast mine exports most of its product, which is tailored to different specifications.
Conditions under the Sishen mining right include the requirement for the continuation of the existing Export Parity Price supply agreement between SIOC and ArcelorMittal SA Limited.
This was set given the steeklmaker's role as "a strategic South African steel producer as well as SIOC's continued support of skills development, research and development and initiatives to enable preferential procurement," it said.
AMSA had had the right to convert its 21.4% stake before April 2009 but failed to do so, leaving the rights available for allocation by the DMR.
Last year, ArcelorMittal and Kumba Iron Ore amended its pricing mechanism terms for iron ore supplies to the market-based Export Parity Price.
This is calculated on the basis of the Platts 62% Fe CFR China Fines Index (IODEX), after a move away from a previous cost-based price, with the change taking effect October 1, 2015.
At certain price levels, AMSA receives a discounted price.
