The rights at the Sishen iron-ore mine, in the Northern Cape, were "divided" at the time of the unbundling of Iscor to form separate mining and steel companies, lawyers for the Sishen Iron Ore Company (SIOC) argued on Tuesday. Therefore, ArcelorMittal South Africa (Mittal) was in possession of an old order mineral right that should have been converted separately, ahead of the deadline set by the Mineral and Petroleum Resources Development Act (MPRDA).

In a review of the Department of Mineral Resources' (DMR's) decision to grant an exploration licence to Imperial Crown Trading (ICT) over the 21.4% in the Sishen mine previously held by Mittal, SIOC's advocate Chris Loxton told High Court Judge Raymond Zondo that, equally, Mittal could not have expected SIOC to conduct the conversion on its behalf. Such a conversion of another holder's right would amount to "expropriation".

SIOC's conversion of its 78.6% share of the right was, thus, not a case of having "stabbed Mittal in the back”, as proposed by Mittal's representative, Advocate Michael Kuper. Instead, it was a case of Mittal having "fallen asleep at the wheel", Loxton asserts.

While both Mittal and SIOC are seeking to overturn the award to ICT, Judge Zondo is also being asked to adjudicate whether the entire right was converted by SIOC in 2008, or whether only 78.6% of that right was converted by the iron-ore miner.

Mittal, which joined the application against the DMR earlier this year, asserts that the conversion by SIOC was over a "single mineral right" including its 21.4% interest in that "undivided mineral right".

Advocate Kuper has argued that the MPRDA does not allow for the "fractionalisation of mineral rights". The grant from DMR is, therefore, for a single right and should not be confused with an interest in that right, which can be held by several individuals or entities.

Therefore, Mittal will seek to have the court overturn the awarding of prospecting rights to ICT and to rule that the grant of the licence by the DMR to SIOC on May 5, 2008, was not limited to the 78.6% interest in that right held by Sishen.

Both Mittal and SIOC, which is majority owned by Anglo American's Kumba Iron Ore, agree that the Mineral Resources Minister is not in a position to grant a portion of a right on a property that is either being mined or not being mined.

SIOC argues further that, in an instance, where there is no relationship between the mine operator and a company seeking a "vacant" right, a right should not be awarded, as was the case in the award to ICT.