Kumba Iron Ore is to fight the South African government decision to reject its mining bid for the Sishen mine. The Department of Mineral Resources called the bid premature and irregular. However company officials at Kumba Iron say that these are unsubstantiated allegations.
They intend to challenge the rejection of the department to protect the rights of the company and its shareholders. If an appeal is rejected by the minister they will go on to ask for a high court review. The dispute over the mining rights came up when ArcelorMittal South Africa did not convert its old order mining right to a 21.4% undivided share in the Sishen mine.
This means that its old order mining right lapsed. So now according to the Mineral and Petroleum Resources and Development Act of 2002 Kumba Iron ore holds the mine as an only entity which may be granted a further iron ore mineral right over the residual 21.4% undivided rights in the Sishen mine.
Accordingly the company applied for the mining rights however the government also accepted and subsequently awarded prospecting rights on that stake to Imperial Crown Trading. This is a little known company which is said to have links to high ranking officials in the government. Ever since then Kumba has been contesting the mining prospect right.