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SISHEN SUPPLY AGREEMENT
Kumba Iron Ore Limited
A member of the Anglo American plc group
(Incorporated in the Republic of South Africa)
(Registration number 2005/015852/06)
JSE Share code: KIO
ISN: ZAE000085346
("Kumba")
SISHEN SUPPLY AGREEMENT
Shareholders were previously advised that the Sishen Iron Ore Company (Pty) Ltd
(“SIOC”) and ArcelorMittal South Africa Limited (“AMSA”) had agreed upon an
interim pricing agreement ("the extended interim pricing agreement") in respect
of the sale of iron ore to AMSA from the Sishen Mine for the period from 2010 to
31 July 2012. This agreement, which expired on 31 July 2012, provided that SIOC
would sell iron ore from the Sishen Mine to AMSA’s Newcastle and Vanderbijlpark
facilities at US$70 per tonne and to Saldanha Steel at US$50 per tonne, being a
weighted average price of US$65/t.
Extensive negotiations to determine the terms of a further interim pricing
agreement have taken place between SIOC and AMSA. As a result of these
negotiations, it has been agreed that, following the expiry of the extended
interim pricing arrangement on 31 July 2012, SIOC will sell to AMSA a maximum
amount of 1.5 million tonnes of iron ore from the Sishen Mine until 31 December
2012, on materially the same terms and conditions as applied under the extended
interim pricing agreement. This supply is in settlement of AMSA’s historic
shortfall entitlement, and the sales price for iron ore sold to AMSA in terms of
this arrangement will be a weighted average price of US$65/t.
The parties are continuing to engage with one another in relation to the terms
and conditions on which SIOC will sell iron ore to AMSA after 31 December 2012,
and until the finalisation of the arbitration between the parties regarding the
status of the 2001 Sishen Supply Agreement. These engagements are taking place
with the assistance of a mediator, and the mediation process is being
facilitated by the Department of Trade and Industry.
Shareholders will be informed of further developments in this regard.
Pretoria
23 August 2012
Sponsor to Kumba
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 23/08/2012 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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