Johannesburg - ArcelorMittal SA and the Competition Commission have reached a settlement agreement that will see the steel make pay a R1.5 billion fine for its role in steel cartels.
In a statement issued on Monday, the commission said, under the deal, AMSA admits having been involved in the long steel and scrap metal cartels, and agrees to pay the fine. The amount will be paid in 5 equal tranches.
It has also agreed to remedies relating to complaints against its pricing conduct without admitting that its pricing conduct constituted a contravention of the Competition Act.
As a result, it will limit its earnings before interest, tax, depreciation and amortisation to a cap of 10 percent for flat steel products sold in South Africa for 5 years.
In addition, it has committed to spending R4.6 in capital over the next five years.
As a result, the commission says the settlement will cover all pending cases against AMSA including those that are still under investigation. It has filed an application with the Competition Tribunal to confirm the settlement.
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The settlement covers several investigations, including one in which it found Cape Town Iron and Steel Works (CISCO), Highveld Steel and Vanadium Corporation and, Scaw and AMSA engaged in collusion by fixing prices and discounts on long steel, allocating customers and sharing commercially sensitive information through the South African Iron and Steel Institute (SAISI) and the South African Reinforced Concrete Engineers’ Association.
It also probed a scrap metal cartel and looked into companies such as AMSA, Highveld, Cape Gate, CISCO and Columbus Stainless Steel. It found that AMSA, Columbus Steel, Cape Gate and Scaw fixed the purchase price of scrap metal.
Other issues probed included the flat steel cartel a complaint from Barnes Fencing Industries. In addition, it investigated an excessive pricing complaint against AMSA based on a complaint by the Department of Trade and Industry.
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AMSA admitted it engaged in collusion with CISCO, Scaw and Cape Gate by fixing prices and discounts, allocating customers and sharing commercially sensitive information in the market for the manufacture of long steel products, in contravention of the Competition Act.
AMSA also admits that it fixed the purchased price of scrap metal with Columbus Steel, Cape Gate and Scaw.
On the flat steel and the Barnes Fencing complaints, AMSA admits the anti-competitive conduct, but does not admit that this conduct constituted a contravention of the Competition Act.
On the pricing complaint, AMSA does not admit that it acted in contravention of the Competition Act. However, it has agreed to remedies to address competition concerns arising from its pricing conduct.
IOL