South African Government Seeks ArcelorMittal, Kumba Iron Ore Price Accord

South Africa’s government said it wants iron ore from a disputed portigrinding machine price in south africaon of the Sishen mine, the country’s biggest ore deposit, to be sold at cost plus 3 percent while it formulates a new pricing model for the steel industry. Kumba Iron Ore Ltd., a unit of Anglo American Plc, has filed a lawsuit aimed at overturning the government’s decision to award 21.4 percent of the Sishen mining rights to Imperial Crown Trading.

Imperial is being acquired by ArcelorMittal South Africa Ltd., a unit of the world’s biggest steelmaker. A government task team will hold talks with the companies “with the objective of providing cost plus 3 percent access to the 21.4 percent Sishen mining rights to ArcelorMittal South Africa or other steel producers,” government spokesman Vusi Mona told reporters in Pretoria today. The charge should stand until a government-determined “developmental pricing model” is implemented that will result in domestic steel prices “being no higher than the lowest quartile of global prices,” he said. Kumba will respond to the Cabinet statement later today, it said in an e-mailed statement.