Africa’s biggest steelmaker, ArcelorMittal South Africa Ltd. (AMSA) and Anglo American Plc’s Kumba Iron Ore unit announced they’re in talks to secure a permanent deal for delivery of the raw material.

“Kumba in December agreed a one-year deal with AMSA to supply as much as 4.8 million metric tons of iron ore from its Sishen mine, Africa’s largest iron-ore operation, to the local unit of the world’s biggest steel producer at an average price of $65 a ton. The arrangement ends on Dec. 31,” reports Bloomberg.

AMSA  said in a statement that “discussions are under way on the possibility of a new supply agreement for iron ore from Kumba’s mines, including Sishen and Thabazimbi.”

In March 2010 Kumba canceled a 2001 agreement to supply AMSA with 6.25 million tons of ore annually at cost plus three percentage points from Sishen after the steelmaker’s partial mining right over the operation expired a year earlier. Arbitration was delayed until court proceedings over the right are concluded.

Then in March, South Africa’s Supreme Court of Appeal dismissed an appeal by the state and Imperial Crown Trading 289 Ltd. to have rights to the complex reinstated. The case will continue to the Constitutional Court.

Kumba “and AMSA are hoping that their discussions will lead to agreement on the long-term supply of iron ore from SIOC’s mines,” Kumba said in a statement.