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 pricinga greement("the extended interim pricing agreement")in respect ofthe sale of iron ore to AMSA from the Sishen Mine for the period from 2010 to 31July 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.
