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Kumba granted residual mining rights

The Department of Mineral Resources (DMR) has granted Kumba Iron Ore [JSE:KIO] the residual 21.4% share of the mining right for the Sishen mine. 

The residual has been granted to Kumba’s subsidiary Sishen Iron Ore Company (SIOC). According to a statement released by the company, this follows the completion of an internal appeal process.

SIOC is now the “sole and exclusive” holder of the right to mine iron ore and quartzite at the Sishen mine. “This residual mining right will be incorporated into the 78.6% Sishen mining right that SIOC successfully converted in 2009,” stated the company.

The consent to amend the SIOC mining right comes with conditions. This includes the continuation of the existing export parity price-based supply agreement between SIOC and ArcelorMittal [JSE:ACL]. This is to ensure ArcelorMittal maintains its role as a strategic South African steel producer, and that SIOC continues to support skills development, research and development and initiatives to enable preferential procurement. 

“Kumba welcomes the news of being awarded the residual right for the Sishen mine… Kumba is fully committed to transformation and will continue contributing towards the achievement of South Africa’s developmental objectives,” said Kumba CEO Themba Mkhwanazi.

Kumba shares were up 3.05%, trading at R129.91 at 11:28. (13 October, 2016)

In September, SIOC announced its decision to dispute a R1bn tax bill from the South African Revenue Service (Sars) for the 2011 tax year.

Fin24 previously reported that the company would cooperate fully with Sars, but disagreed with its audit findings.

In addition to the R1bn tax assessment for 2011, Sishen had also received a R5.5bn tax claim in February for the 2006 to 2010 tax years. The company also disputed that.


Source: Fin24