Kumba Iron Ore Ltd., the unit of Anglo American Plc disputing South Africa’s award of prospecting rights over its Sishen deposit to another company, said Chairman Lazarus Zim resigned as a result of a conflict of interest.
The company statement said that, Zim who has chaired Kumba since 2006, quit because of a potential conflict with his duties and a business opportunity he’s pursuing. He had already excluded himself from involvement in the board’s handling of Sishen because of his relationship with Jagdish Parekh, the biggest single shareholder in Imperial Crown Trading, which was awarded prospecting rights to the deposit.
Zim’s links to Imperial made it “untenable for him to remain as chair of Kumba,” Paul Theron, managing director of Johannesburg-based Vestact Pty Ltd., said today. Vestact manages more than 1 billion rand ($150 million) for private clients.
Zim was not immediately available for comment when media persons tried to contact his Johannesburg office. Allen Morgan, senior independent director, became interim chairman, Pretoria-based Kumba said.
In an affidavit submitted to South Africa’s High Court in August, Kumba said that an application by Imperial for a stake in the rights to Sishen was “fraudulent.” The rights became available after Kumba customer ArcelorMittal South Africa Ltd. failed to renew them by a May 2009 deadline. They then reverted to the government before 21.4 percent were granted to Imperial.
Kumba said that a nine-year supply deal from Sishen to ArcelorMittal at 3 percent above production costs ended in March, after the steelmaker missed the deadline to renew its mineral rights. ArcelorMittal disclosed that the decision could force it to close its Saldanha mill, halt exports and fire as many as 4,000 workers.