[miningmx.com] — ARCELORMITTAL SA said it may still buy Imperial Crown Trading to regain a disputed iron ore supply deal, even though it had decided not to proceed with a related black empowerment deal, the Business Report newspaper said on Tuesday.
The steelmaker said last year it would buy ICT to regain a preferential iron ore supply deal with Kumba Iron Ore, after ICT had been awarded rights over a stake in Kumba’s Sishen mine that was previously held by ArcelorMittal.
The mineral rights allowed the steelmaker to source iron ore from Kumba at a discount in a agreement worth billions of rand each year.
As part of its proposal to buy ICT, ArcelorMittal said last year it would sell about a quarter of itself to black investors, including ICT shareholders and South African President Jacob Zuma’s son.
But the steelmaker said last week it would not proceed with the black empowerment deal valued last year at 9.1 billion rand ($1.1 billion). The deal had faced harsh criticism from the company’s shareholders for not being done in a transparent way and for favouring political elites.
Analysts have largely interpreted ArcelorMittal’s move as a vote against the ICT deal. However, the paper quoted the spokesman as saying the purchase was still on, as it was a separate transaction.
The company could not immediately be reached for comment.
ArcelorMittal and Kumba, a unit of global miner Anglo American, have been at loggerheads over iron ore prices since early last year after ArcelorMittal failed to convert its rights as required by law.
Kumba has since argued that ArcelorMittal was no longer entitled to source iron ore at a discount but the dispute will be argued in arbitration next year.
Kumba has also challenged ICT’s prospecting right in court and a decision on whether the little-known, yet politically connected company can keep its rights is expected later this year.
ArcelorMittal has said it would only buy ICT if the company is allowed to keep its right.
