Timeline: Kumba, Lonmin mining rights dispute

(BestGrowthStock) – Kumba Iron Ore and Lonmin have challenged the South African government’s grant of a prospecting right to Imperial Crown Trading (ICT) and Keysha Investments, respectively, over areas they were mining.

Below is a summary of the mining act and a short chronology of both disputes.


* Mining companies were required to convert their mining rights by a set date to conform with a new mining act that took effect in 2004, or lose them altogether.

* To regain a lost right, they would need to file a new application, which would be processed on a “first come, first served” basis.

* Companies that planned to mine for associated minerals — minerals produced as offshoots from their main mining operations — needed to file a separate application to do so.


* April 30, 2009: ArcelorMittal South Africa’s mining right over a 21.4 percent stake in Kumba’s Sishen mine lapses after the steelmaker fails to convert it into a new one.

* May 4, 2009: Kumba files an application for ArcelorMittal’s lapsed right, while ICT files a bid for prospecting linked to the 21.4-percent stake.

* February 26, 2010: Kumba suspends preferential iron ore supply deal with ArcelorMittal South Africa and says it would supply the steelmaker at market prices from March 1. ArcelorMittal insists the deal still stands.

* March 1: Kumba launches an appeal against the mining ministry granting a prospecting right to ICT.

* May 11: ArcelorMittal says it will take its dispute with Kumba to arbitration.

* May 21: Kumba applies to court to review the mining ministry’s granting of a prospecting right to ICT.

* July 22: ArcelorMittal and Kumba say they have reached an interim agreement for the steelmaker to buy ore from Kumba over the next year at about half of the market price pending resolution of the dispute.

* August 10: ArcelorMittal says it plans to buy ICT for 800 million rand to regain its rights over the Sishen mine and put the preferential pricing deal back in place. Kumba says the acquisition would have no impact on the dispute.

ArcelorMittal also says it would transfer 26 percent of its shares to a group of black investors — including ICT and an investment group led by the son of South African President Jacob Zuma — and employees.

* August 17: Mining Minister Susan Shabangu overturns Kumba’s appeal and upholds ICT’s right, but says she will investigate ArcelorMittal’s plan to buy ICT. Kumba says it will continue fighting the case in court.


* 2006-2008: Lonmin converts its old rights to mine Platinum Group Metals (PGMs) into a new mining right.

* May 2009: Keysha Investments is awarded a prospecting right for base metals over parts of Lonmin PGM mining areas.

* December 2009: Lonmin files application to mine associated minerals in all areas where it mines for PGMs.

* June 2010: Lonmin appeals the granting of a prospecting right to Keysha. A high court orders Lonmin to account to Keysha on its sale of base metals from Keysha’s prospecting areas.

* August 11: South Africa’s mining ministry grants Lonmin the right to mine associated minerals, except for the area over which Keysha holds a prospecting right.

Lonmin says it remains entitled to mine and dispose of the associated minerals mined from the Keysha area under a court order. This entitlement will remain until Keysha converts its prospecting right to a mining right, Lonmin says.

(Reporting by Agnieszka Flak)

Timeline: Kumba, Lonmin mining rights dispute