By: OrePulse

African Rainbow Minerals (ARM) said it intends to file a counterclaim against its Assmang joint-venture partner, Assore, alleging "serious breaches" of their shareholders' agreement connected to Assore's role as the venture's sole marketing agent.

Assmang is a joint venture between ARM and Assore that mines and processes iron ore and manganese in South Africa, with the two partners splitting management, marketing and profit responsibilities under their agreement.

The planned counterclaim responds to a High Court suit that Assore filed earlier in October. In that suit, Assore alleges that ARM overstepped its authority by appointing senior managers at Assmang without routing the decisions through the joint venture's executive committee. ARM disputed the allegation. The company said legal counsel concluded that Assore's claims "have no foundation or substantive merit," adding that, as Assmang's operator, it has the authority to appoint senior managers.

At the center of the dispute is how the two companies interpret the shareholders' agreement they signed in 2005. Assore maintains that ARM operates under the venture as an outside contractor delivering mining and financial services, rather than acting as manager.

Under the joint-venture structure, ARM collects a management fee as operator and receives half of Assmang's profits. Through its subsidiary, Ore & Metal, Assore holds exclusive marketing rights over Assmang's output — earning a commission on sales — and also takes half of the joint venture's profits. ARM's planned counterclaim centers on how Ore & Metal has carried out that marketing mandate. Assore chief executive Charles Walters has said the transfer-pricing issue is not applicable, given Ore & Metal's status as a South African domestic company.

A related dispute has emerged over tax matters: ARM says it requires further information on Ore & Metal's finances before it can complete Assmang's 2025 tax return. Assore has said the scope of ARM's requests exceeds anything sought in any year since the 2005 agreement took effect, and has noted that Assmang's accounts for the year in question were already audited.

On the procedural front, ARM has raised preliminary objections to Assore's summons, and has indicated that its formal plea and counterclaim are unlikely to be filed before next year.

The legal dispute comes as Assmang's profitability has declined. ARM's share of profit from the joint venture fell 27 percent to R2.4 billion in the financial year ended June 2026, down from R3.3 billion a year earlier. ARM attributed the decline to a stronger rand weighing on iron ore earnings and to a lower manganese price.

Both companies' positions in the litigation remain allegations that have yet to be tested in court. Neither company's underlying conduct has been adjudicated, and the matters raised by both the original summons and the planned counterclaim are set to proceed through the South African court system.