[miningmx.com] — IMPERIAL Crown Trading (ICT) will receive a minimum of R200m from ArcelorMittal South Africa (ArcelorMittal) irrespective of what happens regarding its claim to part of Kumba Iron Ore’s (Kumba) Sishen mine.
That’s according to sources who point out ArcelorMittal CEO Nonkululeko Nyembezi-Heita did not provide key details of the transaction at Tuesday’s briefing to financial media and analysts.
A spokesperson for ArcelorMittal told Miningmx that, “the terms are confidential and I do not wish to comment any further.’
ICT executive Jagdish Parekh also declined to comment when contacted again citing the confidentiality terms of the deal.
Nyembezi-Heita previously declined on two separate occasions to comment on market speculation that ArcelorMittal was going to take over ICT – firstly to the Financial Mail and then to Miningmx at the presentation of the group’s interim results on July 28.
On Tuesday, Nyembezi-Heita revealed that ArcelorMittal had agreed to buy ICT for R800m subject to various conditions precedent and due diligence exercises to be carried out by ArcelorMittal.
In response to questions she said the transaction was dependent on ICT being awarded a mining right for 21.4% of Kumba Iron Ore’s Sishen mine.
That is the subject of legal action by Kumba which is challenging the award of a prospecting right by the Department of Mineral Resources (DMR) to ICT over a portion of the operating Sishen mine.
Nyemba-Heita commented yesterday that, “clearly, ICT still has some legal challenges to overcome but we have not seen one thing so far that is a showstopper.
“All the charges levelled at ICT in the media so far have not been backed up by any credible evidence. We do not believe that any law has been broken on the evidence shown to us.’
Asked for his opinion on the ArcelorMittal/ICT deal mining law expert Peter Leon – a partner in the legal firm of Webber Wentzel – commented, “I think it’s very odd. It looks like opportunism at its very worst. It does not appear that morality has come into this at all.’
Macquarie First South Securities analyst David Pleming commented, “given the cloud around ICT’s application I would have thought it would be more prudent for ArcelorMittal to wait for the outcome of the legal process before embarking on an acquisition of ICT particularly as ArcelorMittal is also bringing the ICT members into the business as their BEE partners.”
