ArcelorMittal SA, Kumba Negotiating Iron Ore Price Pact Extension

Date : 08/01/2012 @ 4:16AM
Source : Dow Jones News
Stock : Arcelor Mittal NY Registry Shares New (MT)
Quote : 7.8  0.05 (0.65%) @ 4:01PM

ArcelorMittal SA, Kumba Negotiating Iron Ore Price Pact Extension

Mittal Steel (NYSE:MT)
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By Devon Maylie

JOHANNESBURG--ArcelorMittal South Africa (ACL.JO) and Kumba Iron Ore Ltd. (KIO.JO), South Africa's largest iron-ore producer, both said Wednesday that they are negotiating an extension to an interim pricing agreement over the sale of iron ore, following a dispute over the Sishen mine.

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 a small company called Imperial Crown Trading had been awarded a lapsed stake previously owned by ArcelorMittal. The ownership is now being appealed by Imperial.

Kumba used to sell iron ore, a key ingredient to make steel, to ArcelorMittal at cost plus 3%. That agreement is being disputed while the Sishen ownership issue is still going through the courts. In the interim, ArcelorMittal and Kumba agreed on an interim pricing structure, which lapsed in July. The two companies said Thursday they are currently negotiating an extension to the interim pricing agreement.

Write to Devon Maylie at devon.maylie@dowjones.com

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