ArcelorMittal Says Kumba Places Force Majeure on Iron Ore Supplies

By Devon Maylie

JOHANNESBURG--ArcelorMittal South Africa (ACL.JO) said Monday that Sishen Iron Ore, a unit of Kumba Iron Ore Ltd. (KIO.JO), declared a force majeure on its supplies last week after an illegal strike shut the mine.

Kumba said earlier in the day that it is losing 120,000 metric tons of production a day at Sishen --the country's largest iron ore mine. ArcelorMittal sources a large part of its iron ore supplies, a key ingredient to make steel, from Sishen, the company said.

"The duration of the force majeure is unknown, but [Sishen] anticipates that it might endure for approximately two weeks," ArcelorMittal said.

Of 12,000 miners employed at the mine in Sishen, 300 have been on strike since last Wednesday, demanding an increase in their monthly wages of 15,000 rand ($2,166). On Thursday the company was forced to close the mine after the strikers blocked the entrances.

ArcelorMittal said its Saldanha plant will be "negatively affected" by the force majeure if it lasts for more than one and a half weeks. It has stockpiles of iron ore to operate in the interim.

"The other plants have enough stockpiles and alternatives should the industrial action continue for an extended period," ArcelorMittal said.

Write to Devon Maylie at [e-mail]

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