By Devon Maylie
JOHANNESBURG--Kumba Iron Ore Ltd. (KIO.JO), South Africa's
largest iron-ore producer, and ArcelorMittal South Africa Ltd.
(ACL.JO) agreed to a temporary iron-ore pricing agreement Thursday
while legal issues around a disputed mine play out.
Under the new agreement, which will run from January 2013 to the
end of December 2013, Kumba will supply up to 4.8 million metric
tons of iron ore to ArcelorMittal at a weighted average price of
$65 a ton.
The new agreement is largely the same as the previous one, a
spokeswoman for Kumba said, except ArcelorMittal now requires fewer
tons of iron ore for the period.
Kumba used to supply iron ore, a key raw material in steel
making, to ArcelorMittal at cost of production plus 3%. That
agreement is being disputed, however, amid a court case over
ownership of a minority stake in South Africa's largest iron-ore
mine, Sishen.
At the end of last year South Africa's High Court ruled that
Kumba, a subsidiary of Anglo American PLC (AAL.LN), was the full
owner of Sishen after the Department of Mineral Resources awarded a
21.4% stake previously owned by ArcelorMittal to a small company
called Imperial Crown Trading. A court will hear an appeal by
Imperial and the mineral department in February.
Write to Devon Maylie at devon.maylie@dowjones.com
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