The Department of Mineral Resources and controversial Sishen mining rights holder Imperial Crown Trading 289 (ICT) have until early October to react to allegations by Kumba that ICT's application was "fraudulently manipulated".

This after Kumba alleged that ICT merely copied parts of Kumba's application. A response had been expected from the department by the end of August, but parties now have an additional 30 days to respond to Kumba's supplementary affidavit, filed at the North Gauteng High Court in Pretoria last week.

Kumba subsidiary Sishen Iron Ore Company highlighted a number of new alleged irregularities with the awarding of a prospecting right to ICT, following the release of a "records of decision" by the state attorney on why the licence was awarded to ICT.

ICT is accused of accessing Sishen's confidential mining right application. "This is evident from the fact that the copies of the title deeds submitted as part of the ICT application were obtained from Sishen's mining right application," Sishen said in its affidavit.

ICT's application was also allegedly not complete when filed, with supporting documents filed later. Some parts of ICT's application also refer to prospecting for diamonds, rather than iron ore and manganese, indicating a rushed job over the May long weekend last year. It is still unclear how ICT knew the right became available.

The deputy-director general, who overruled junior officials' recommendation to refuse the application, had no proof that ICT shareholders were previously disadvantaged individuals, despite this being one of his main reasons for awarding the right to ICT, Kumba said.

An ICT lawyer would not comment on Kumba's allegations ahead of its own response. "We are shocked at the allegations and distortions in their affidavit, and we will respond in due course," said Jagdish Parekh, whose Pragat Investments owns 50% of ICT. Parekh is a close business associate of Duduzane Zuma, son of president Jacob Zuma, and Zuma supporters the Gupta brothers, who also employ Duduzane's sister Duduzile.

It is unclear if the court proceedings, expected to last two years, will run their course. The licence dispute, which arose after the department granted prospecting rights for iron ore over part of Kumba's operating Sishen iron ore mine, might be addressed by an inter-departmental task team.

The team was appointed following Kumba's cancellation of a favourable iron ore supply agreement with ArcelorMittal SA, which had failed to apply for the conversion of its 21.4% mining right over Sishen. Instead of charging iron ore at cost plus 3%, Kumba said it would charge market rates, leading ArcelorMittal to threaten thousands of job losses and the closure of its Saldanha plant.

An interim pricing agreement is in place until July next year, and the government wants a permanent solution before that expires.

The parliamentary portfolio committee on trade and industry said this week that it would hold hearings on lower steel prices for downstream industries, while trade and industry minister Rob Davies has mooted a steel pricing law.

ArcelorMittal has since made a purchase offer of R800-million for ICT, subject to ICT converting its prospecting right into a mining right. The Guptas, Duduzane Zuma and ICT shareholders were last month given the lion's share of ArcelorMittal's R9.1-billion BEE deal.