| Fri 26 Feb 2010, 15:59 | | KIO - Kumba - Sishen Supply Agreement |
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KIO
KIO
KIO - Kumba - Sishen Supply Agreement
Kumba Iron Ore Limited
A member of the Anglo American plc group
(Incorporated in the Republic of South Africa)
(Registration number 2005/015852/06)
JSE Share code: KIO
ISIN: ZAE000085346
("Kumba")
SISHEN SUPPLY AGREEMENT
Sishen Iron Ore Company (Pty) Ltd ("SIOC"), a subsidiary of Kumba, notified
ArcelorMittal South Africa Limited ("Mittal")on 5 February 2010 that, with
effect from 1 March 2010, SIOC would no longer supply iron ore from the
Sishen Mine to Mittal at a cost plus 3% price, but has tendered to sell iron
ore to Mittal on commercial terms.
In terms of the Sishen Supply Agreement, which has been in effect since
2001, SIOC has, by virtue of Mittal`s ownership of a 21.4% undivided share
of the mineral rights to the Sishen Mine, SIOC was contracted to mine at the
Sishen Mine on behalf of Mittal, and to supply 6.25Mt of iron ore per annum
representing Mittal`s share of production from that mine.
As a result of Mittal having failed to convert its old order mining right in
respect of its 21.4% undivided share of the mineral rights to iron ore at
Sishen Mine, as required in terms of the Mineral and Petroleum Resources
Development Act, SIOC notified Mittal that it was no longer obliged to
supply the iron ore at cost plus 3%. SIOC has offered to sell an equivalent
amount of iron ore to Mittal from the Sishen Mine on commercial terms.
SIOC received no communication from Mittal until 26 February 2010
when Mittal advised SIOC inter alia that it had declared a dispute in
response to SIOC`s notification.
SIOC denies that it has repudiated the agreement, and will respond in due
course to the undertakings sought by Mittal.
The effect of these developments cannot be quantified with certainty at
present, but may have a material impact on Kumba`s share price.
For further information please contact:
Vincent Uren
Tel.: +27 (0)12 683 7055
Tebello Chabana
Tel.: +27 (0)12 683 7067
26 February 2010
Pretoria
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 26/02/2010 15:59:01 Produced by the JSE SENS Department.
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