Lawyers acting for Sishen Iron Ore Company (SIOC) described the decision by the Department of Mineral Resources (DMR) to air plans to criminally charge SIOC during a review of an application lodged by Imperial Crown Trading 289 (ICT) as "reckless" and "irrelevant".

On Wednesday, Advocate Willie Vermeulen, acting for the DMR, indicated in the North Gauteng High Court, in Pretoria, that such charges were being prepared, but did not immediately provide details.

It is understood that the charges are likely to relate to alleged manipulation of DMR officials to ensure that Kumba Iron Ore’s lodgement for rights to 21.4% of the Sishen mine, previously held by ArcelorMittal South Africa, were received ahead of any other possible application.

In an answering affidavit arising from a SIOC-initiated review of the granting of a prospecting licence to ICT, former director-general Sandile Nogxina stated that Kumba sought to “deliberately subvert” the provisions of the Mineral and Petroleum Resources Development Act (MPRDA) to “gain unfair advantage” over other applicants.

The DMR noted that Monday, May 4, 2009, was the first day on which any applicant could “validly” have lodged an application, rather than May 1, 2009, which was a public holiday and fell on a Friday. The department alleges that Kumba officials, as well as certain officials at its offices in Kimberley and Centurion, went to great lengths to manipulate the process in order for its lodgement to reflect a May 1, 2009, submission date.

But Advocate Chris Loxton SC, appearing for SIOC, noted that SIOC's application was not the subject of the review and that it was, thus, a reckless statement to make in the context of a civil dispute.

By contrast, SIOC's allegations of fraud by ICT were relevant to the matter being considered by Judge Raymond Zondo.

Zondo, Loxton said, would need to assess whether ICT's application for rights at Sishen should be disqualified by the inclusion of title deeds fraudulently obtained, manipulated and copied, by SIOC's own submission.

SIOC, which is majority owned by Anglo American's Kumba Iron Ore, also describes the allegations of manipulation as “incorrect" and based on unsubstantiated hearsay.

Loxton added that SIOC had also never insisted that its application was handed in at any time earlier than May 4, 2009.

But Vermeulen argued that his raising of prima facie fraud by SIOC in the manner in which it lodged was germane to the DMR's argument that SIOC had "fiddled" with the dates in order that their application not be at risk of being considered to have been submitted after any other possible application.

He denied that the fraud charge was made in a bid to "grand stand" in the media, and refuted the suggestion that it was reckless.

The date of lodgement is considered important as the MPRDA states that, if applications are received on the same day, they must be regarded as having been received at the same time. The Minister should then give preference to the applications from “historically disadvantaged persons”.

Loxton also attacked ICT's credentials as a company owned and managed by historically disadvantaged persons, as envisaged in the MPRDA, noting that the company has only six shareholders. Should ICT prevail, these shareholders, without having to conduct any mining and without having to employ any further individuals, would share in the profits arising from the 21.4% position under consideration.