Investors seemed to share ArcelorMittal's assessment that it had gained an edge over Kumba in a pending cheap ore supply arbitration case, sending its shares soaring 10% after Judge Raymond Zondo ruled that a mining right could not be subdivided or fractionalised.
ICT's lawyer, Ronnie Mendelow, said his client disagreed with the ruling and would appeal before February 7. Kumba's outgoing chief financial officer, Vincent Uren said the ruling is a surprise. "It's great that ICT didn't get it, but we are surprised by the judgment," Uren said. ArcelorMittal SA's CEO, Nonkululeko Nyembezi-Heita was delighted with the outcome of the court case - "[t]he judge confirmed our reading of the act and how the conversion process was meant to have been handled," she told Business Day, adding that the ruling strengthens ArcelorMittal's hand in the pending arbitration process. "The issue of ownership of the mineral rights is a pivotal issue in the arbitration case," Nyembezi-Heita said.
The arbitration, which has been suspended until the legal process over mining rights had been finalised, is completely separate from this court ruling, but the judgment will play a key role in the three arbitrators' decision. ArcelorMittal has warned that if it is to pay market-related prices for its iron ore, it will have to shut its Saldanha steel mill. An interim pricing agreement has been set up that sees the steel maker paying a higher price for Kumba's ore, but not as high as market prices. According to Business Day, these higher prices have contributed to ArcelorMittal's financial difficulties.
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