KIO - Kumba Iron Ore Limited - Proceedings in relation to the residual Sishen Mine Mineral rights
A member of the Anglo American plc group Incorporated in the Republic of South Africa) Registration number 2005/015852/06)
("Kumba")
PROCEEDINGS IN RELATION TO THE RESIDUAL SISHEN MINE MINERAL RIGHTS
Shareholders were previously advised that, as a result of the failure by ArcelorMittal South Africa Limited to convert its former old order mining right as to a 21,4% undivided share in the Sishen Mine, its old order mining right had lapsed.
In terms of the relevant provisions stipulated in the Mineral and Petroleum Resources and Development Act, 2002 ("the MPRDA") Sishen Iron Ore Company (Proprietary) Limited ("SIOC") is the only entity capable (after 1 May 2009) of being granted any further iron ore mineral rights over the residual 21.4% undivided rights in the Sishen Mine.
This position is premised most notably on Section 22(2) of the MPRDA, as SIOC is the holder of existing rights to mine iron ore on the Sishen mine property and the current miner of the entire iron ore reserve. SIOC has consistently held this position. Accordingly, and in order to protect SIOC`s rights, SIOC applied for a mining right in relation to the 21.4% undivided rights in respect of the Sishen Mine in May 2009 ("SIOC`s May 2009 application").
SIOC was subsequently informed, during February 2010, that the Department of Mineral Resources ("DMR") had granted a prospecting right on 30 November 2009 to Imperial Crown Trading 289 (Proprietary) Limited ("ICT") in relation to the residual undivided 21,4% of the Sishen Mine.
SIOC has initiated High Court proceedings to challenge such decision ("the review application"). Despite express written undertakings by both the DMR and ICT to file answering affidavits by 18 and 24 January 2011 respectively, neither the DMR nor ICT has as yet filed their answering affidavits in the review application. On receipt of such affidavits, SIOC will respond appropriately.
Shareholders were also previously advised that SIOC has commenced a process to object to, and appeal against, the decision by the DMR to accept an application by ICT for mining rights in respect of the residual 21.4% undivided rights.
Shareholders are reminded that the acceptance of the ICT application for a mining right in respect of the 21.4% undivided share in the Sishen Mine by the DMR does not constitute the grant to ICT of any mining rights at the Sishen mine.
After a period of nearly two years, SIOC was informed on 25 January 2011 that the DMR had rejected SIOC`s May 2009 application for a mining right in respect of the residual undivided 21,4% of the Sishen Mine (see Business Day report).
SIOC regards the DMR`s decision to reject SIOC`s May 2009 application for a mining right in respect of the residual 21.4% undivided right as legally incorrect and fundamentally flawed, and strongly disagrees with the position adopted by and the reasons advanced by the DMR.
SIOC rejects the DMR`s unsubstantiated allegations that the submission of SIOC`s May 2009 Application was in any way premature or irregular in any respect.
SIOC`s application for the 21,4% residual mining right was submitted in accordance with the provisions of the MPRDA. SIOC has not acted in an irregular or fraudulent manner as alleged by the DMR in respect of the May 2009 Application or in respect of any of SIOC`s dealings with the DMR. It should be noted in this regard that the DMR has not provided SIOC with any evidence whatsoever to substantiate these allegations.
SIOC will accordingly take the necessary steps to challenge the DMR rejection decision and protect the rights of the company and its shareholders, which actions will include an appeal against the rejection decision to the Minister, and a possible High Court review application if the appeal is not granted.
27 January 2011
Pretoria
Sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Statement issued by the JSE SENS Department, January 27 2011
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