Sishen battle rumbles on

It will be several weeks before the Department of Mineral Resources sheds light on its decision to grant a prospecting licence over Kumba's Sishen mine, in operation since 1953, to the unknown but well-connected Imperial Crown Trading 289.

The department has until the end of August to file answering affidavits at the North Gauteng High Court, where Kumba subsidiary Sishen Iron Ore Company initiated proceedings to set aside the awarding of the licence to Imperial in May, lawyers involved in the process said this week.

Imperial's main shareholder is Jagdish Parekh, a director of companies belonging to the Gupta family, major benefactors to President Jacob Zuma.

Kumba chairman Lazarus Zim has also recused himself from all board meetings regarding the mining rights issue, due to his close ties with the Guptas.

As fifth respondent in the case, Imperial will only have to file an explanation of how it got its hands on the much-coveted right - it cost ArcelorMittal R2.8-billion in 2001 - once the department has submitted its papers.

The dispute arose from ArcelorMittal's failure to apply to convert its 21.4% right to a new-order mining right by April 30, which led Kumba to cancel a cheap iron ore supply agreement with ArcelorMittal. That matter is now under arbitration.

Sishen alleges that Imperial's application was stamped by the Kimberley office of the department on May 4, while it was only signed a day later, and that substantial parts of its application were handed in after the deadline.

One of Sishen's employees also saw the "stamped original of the preamble to Sishen's mining right application contained in the (Imperial) application file", when she was briefly allowed to see the application at the Kimberley offices, the court documents state.

"I don't think there is any conflict as to when it was signed or stamped," a role player at Imperial said.

He did not want to elaborate on what grounds Imperial would oppose Sishen's application, but it is likely that the company's "arrangement" with department officials to receive its application and then stamp it later will be a focus area.

Kumba's legal team has extended an invitation to meet with Imperial's lawyers to discuss access to Sishen as well as Kumba's decision to head to the courts to review the granting of the licence, but Imperial has not yet responded.

What South Africa needs, according to Peter Leon, a mining law expert at Webber Wentzel, is an open mining-title system, as is the case in Namibia and Mozambique.