| Fri 6 Nov 2015, 8:03 | | KUMBA IRON ORE LIMITED - Amendment of the ArcelorMittal Supply Agreement |
|
KIO 201511060009A
Amendment of the ArcelorMittal 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" or the “Company”)
Amendment of the ArcelorMittal Supply Agreement
Shareholders are advised that Kumba Iron Ore Limited (“Kumba”) and ArcelorMittal SA Limited
(“ArcelorMittal”) have agreed to amend the pricing mechanism of the long term supply agreement (for
Kumba to supply ArcelorMittal with up to 6, 25Mtpa of iron ore) that they entered into on 5 November
2013.
Kumba and ArcelorMittal have agreed to amend the pricing mechanism terms of their current agreement
from a cost-based price to a price based on an export parity price (“EPP”). The EPP will be calculated on
the basis of an international index (the “index price”) and, at certain index price levels, ArcelorMittal will
receive a discounted price, as follows: if the index price is between USD60/t and USD70/t, ArcelorMittal
will receive a 5% discount to the EPP; between USD70/t and USD80/t, a 6.25% discount would apply and
at an index price above USD80/t, a 7.5% discount would apply. If the index price is below USD60,
ArcelorMittal will pay the EPP. These terms remain subject to a final definitive agreement being signed
between Kumba and ArcelorMittal.
“The current market environment presents significant challenges for the mining and steel industries. This
pricing amendment is commercially acceptable and sustainable for both parties. It will iron out the current
distortions, whereby domestic prices can exceed those for export, thereby best serving the interests of
the industry and country as a whole. Kumba remains committed to supporting a viable and stable
domestic steel making industry in South Africa.” said Norman Mbazima, CEO of Kumba Iron Ore.
Independent of the above announcement, shareholders are reminded of the cautionary announcement
released by Kumba on 3 November 2015, advising shareholders to exercise caution when trading in the
Company’s securities pending a further announcement (“the Cautionary Announcement”). The
Cautionary Announcement pertains to the Company’s engagement with the Department of Mineral
Resources regarding the proposed conditions attaching to the consent to the amendment of the Sishen
mining right to include the residual 21.4% undivided share of the mining right for the Sishen mine.
Centurion
6 November 2015
For further information, please contact:
Media Investors
Nikki Wetzlar Nerina Bodasing
Tel: +27 (0)12 683 7019 Tel: +27 (0)12 622 8324
Mobile: +27 (0)82 561 7407 Mobile: +27 (0) 82 940 7505
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 06/11/2015 08:03:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
