Dust-up over iron ore in Senegal will go the distance

14 March 2010 - 02:30 By Kea' Modomoeng
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Mining giant Kumba Resources was back in court this week in the latest episode of a three-year legal battle with Lithos Corporation over a Senegalese iron ore mine

Lithos is suing Kumba for R5-billion in damages. The Canadian company claims that it introduced Kumba to Senegal's state-owned development company Miferso in a tripartite deal for the Faleme project, but that it was eventually excluded.

Lithos, which was earlier granted 80% of the mining rights for the project, instituted legal action against Kumba in October 2006, claiming damages of $42-million.

In this week's court papers, Lithos claims that from as early as 2004 Kumba "intentionally and deliberately" prevented it from taking part in further negotiations with Miferso in order to "benefit itself" at the expense of Lithos. Lithos regarded Kumba's conduct as "unlawful" competition.

On Friday, a Kumba spokesman said Lithos made a number of substantial amendments to the pleadings ahead of this week's court hearing - some were made only four days before the commencement of the trial.

"Based on the exceptionally late nature of the amendment and the fact that Kumba had not been granted an opportunity to exercise its legal rights consequent to the amendment, it was apparent that the trial could not proceed.

"The matter was postponed indefinitely. Kumba remains of the view that the claim is wholly without merit and will be vigorously defended," the spokesman said.

James Ndebele, a director at Fluxmans Incorporated, which is acting for Lithos, said the company received documents prior to this week's court hearing which "indicated further conduct on the part of Kumba to exclude Lithos from the Faleme Project".

Ndebele said Lithos had a "very good" case in light of the latest amendments, but said the case would take a long time because a new trial date would have to be set.

Since the start of the legal action in 2006, Kumba Resources unbundled into Kumba Iron Ore, while the company's non-iron-ore assets were merged with Eyesizwe and re-listed as Exxaro Resources.

Judge Malesela Legodi of the High Court in Pretoria ordered a postponement on condition that a trial date would be set soon.

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