Johannesburg, South Africa — MININGREVIEW.COM — 12 May 2011 – ArcelorMittal SA (Amsa) will seek to roll over the interim pricing agreement for iron ore from Kumba Iron Ore, the company revealed here in its first-quarter production figures announcement.
Miningmx reports that, intriguingly, however, Amsa served notice that it would seek other longer-term sources of iron ore, revealing that it wanted to establish its own iron ore prospect with minimum output of 2 to 3Mtpa.
Hosting a conference call to media and analysts, Amsa CEO Nonkululeko Nyembezi-Heita said the company was involved in early stage exploration on a prospect in the northern Cape, ‘in the general area of Sishen’, with a view to producing first iron ore in a ‘three-year time horizon’. The mine would be supported by nearby infrastructure, she added.
“These numbers on production are a bare minimum,” said Nyembezi-Heita. “In six months’ time we can update the market on the parameters of the project.”
Nyembezi-Heita declined to comment further on how iron ore would be priced from Kumba Iron Ore in terms of the rollover contract. “We’re in discussions with Kumba,” she said. “It’s not possible to speculate on the level of the pricing.”
Amsa currently pays US$50/t for iron ore bound for its Saldanha Bay steel plant and US$70/t for inland mills “’ up to US$40/t more than it paid in terms of a previous cost-plus-3% supply agreement that Kumba cancelled last year. The interim pricing agreement runs from 1March 2010 to the end of July this year.