Kumba Settles Interim Price Agreement With ArcelorMittal-Co

22nd Jul 2010 07:24

LONDON (Dow Jones)--Kumba Iron Ore Ltd. (KIO.JO) said Thursday that it settled on an interim price agreement with ArcelorMittal South Africa Ltd. (ACL.JO) for the delivery of iron ore while a dispute over a contract between the two goes through arbitration. The agreement will cover the period between March 2010 and July 2011. The two companies are locked in a dispute over a contract in which Kumba supplied a set amount of iron ore to ArcelorMittal each year at a price of 3% above cost of production. Following ArcelorMittal's loss of rights to part of the Sishen mine--jointly owned with Kumba--due to a missed government deadline for renewing it earlier in the year, Kumba said that it wanted to break from the contract set in 2001 and sell at market prices. While that arbitration proceeds ArcelorMittal South Africa, a unit of world's largest steelmaker ArcelorMittal (MT), will pay Kumba, which is 63% owned by Anglo American PLC (AAL.LN), a fixed price of $50 a metric ton for iron ore deliverable to its Saldanha plant. -By Devon Maylie, Dow Jones Newswires; +44 (0)20 7842 9483; [email protected] (END) Dow Jones Newswires July 22, 2010 02:24 ET (06:24 GMT)