JOHANNESBURG (Reuters) - Kumba Iron Ore Ltd said on Tuesday it would review the basis on which to continue to supply iron ore to ArcelorMittal's South Africa unit if the companies fail to resolve a price dispute soon.
Kumba, a unit of global miner Anglo American, said ArcelorMittal South Africa was incorrect in stating last month that Kumba would invoice the steelmaker on a discounted price until the dispute was resolved, and hold the steel firm liable for the difference between that price and the market price.
Kumba wants to charge market rates for iron ore supplies to South Africa's unit of the world's top steelmaker, but ArcelorMittal's unit has said a deal with Kumba to supply iron ore at a discount was valid and binding.
Kumba in February terminated the long-term deal which allowed the steelmaker to receive ore from Kumba at a discount and said it would sell to ArcelorMittal South Africa at market rates from March 1.
Kumba, the world's 10th largest iron ore producer, said it required ArcelorMittal South Africa to pay the discounted price of cost plus 3 percent and pay the difference between that price and the interim price it has proposed into escrow, or provide a guarantee for its payment if Kumba won the arbitration.
Kumba said ArcelorMittal South Africa has so far declined to accept this proposal or make a firm counter-proposal regarding an interim price or a payment mechanism.
"(Kumba) has advised ArcelorMittal that should the parties not come to a firm agreement on an interim pricing mechanism in the near future, (it) will review the basis upon which it will continue to supply iron ore to ArcelorMittal," Kumba said.
Reuters Africa
