ArcelorMittal’s Kumba iron-ore deal jettisoned by Anglo American
27 Feb 2010
Anglo American, a diversified mining group, yesterday cancelled an iron-ore supply agreement reached in 2001 on a cost plus 3 per cent basis between its subsidiary Sishen Iron Ore Company (SIOC) and the world's largest steel maker ArcelorMittal.
Luxembourg-based ArcelorMittal's South African subsidiary, ArcelorMittal South Africa, said yesterday that it had received a notice from SIOC, a subsidiary of Anglo American-owned Kumba Iron Ore Limited, that it will stop supplying iron ore to ArcelorMittal South Africa at a cost plus 3 per cent basis from 1 March 2010, but would, instead, be willing to supply at market prices.
Kumba, which is the world's fourth-largest iron-ore producer and the largest in Africa, is owned 63.4 per cent by Anglo American, 13.1 per cent by the Industrial Development Corporation of South Africa Ltd and 23.5 per cent by minority shareholders.
Kumba, which owns Thabazimbi and Sishen iron ore mines, holds 74 per cent in SIOC, while the rest of SIOC is owned by Exxaro, a large South African coal and heavy minerals mining company, SIOC Employee Share Participation Scheme and the SIOC Community Development Trust.
Kumba Resources, the world's fourth-largest iron-ore producer and now 63.4-per cent subsidiary of Anglo American, was unbundled from its parent Iscor Limited in 2001. Mittal acquired Iscor and was guaranteed the 21.4-per cent stake that Iscor held in the Sishen mine, which entitled it to receive 6.25-million tons of iron-ore annually at cost plus 3 per cent as its share of the mine's production.
When Mittal acquired Iscor, Mittal was guaranteed the 21.4 per cent stake that Iscor held in the Sishen mine, which entitled it to receive 6.25-million tons of iron-ore annually at cost plus 3 per cent as its share of the mine's production.
