A South African court will decide on Thursday whether or not a small but politically connected company with no mining experience can keep a prospecting right it was awarded.
But the stakes are far bigger than one dispute, as the case has rattled investor confidence in Africa's largest economy and could have multi-billion rand consequences for Kumba Iron Ore and Arcelormittal South Africa.
Kumba, a unit of global miner Anglo American, has challenged the state's award of a prospecting right over a 21.4 percent stake in Kumba's Sishen mine to little-known Imperial Crown Trading (ICT).
The granting of that right by South Africa's department of mineral resources raised concerns about political favoritism and cronyism, as one of ICT's owners is a business partner of President Jacob Zuma's son Duduzane, and the company has no real mining experience.
Thursday's ruling will be the latest twist in a long and complex saga, ending with a decision whether ICT should keep the right. Few think it will.
I would be very surprised if the court granted ICT the right, because the circumstances under which the right was granted were so extraordinary, said Peter Leon, a mining expert at Johannesburg law firm Webber Wentzel.
In this particular case, the regional manager in the department and other officials had recommended against the grant, and the deputy director general at the time approved it.
If the judge says ICT can keep the prospecting right, that will probably allow it to apply for the mining right.
If, as expected, the judge rules that ICT should not have been granted the right in the first place, he may set it aside but say that only Kumba can apply for the mining right.
Thursday's court drama will also have profound implications for steelmaker Arcelormittal's South Africa unit, as it allowed the right in question to lapse in 2009. This was subsequently granted to ICT.
Arcelormittal is welded to the case because a preferential supply agreement with Sishen that enabled it to buy iron ore at below market prices was tied to the right, and Kumba says that has now lapsed.
This is being hashed out in a separate arbitration process, but Thursday's ruling could ultimately have a bearing on this, and the stakes are huge for both companies, as the preferential iron ore supply deal is worth billions of rand a year.
(Editing by Marius Bosch and Will Waterman)