South Africa's largest steel maker fined for price fixing

South Africa's Competition Commission on Monday imposed a 1.5-billion-rand (about 111-million-U.S.-dollar) fine on ArcelorMittal South Africa (AMSA), the country's largest steel maker, for price-fixing and collusion in the steel industry.

This is the largest single fine imposed against a single company thus far by the competition authorities.

AMSA admits to having been involved in the long steel and scrap metal cartel, fixing prices on steel for a period of five years.

Besides agreeing to pay the fine, AMSA will, as part of the settlement with the authorities, limit its EBIT (earnings before interest and tax) margin to a cap of 10 percent for flat steel products sold in South Africa.

Minister of Economic Development, Ebrahim Patel welcomed the announcement of the fine, saying the action by the competition authorities is part of a crackdown against abuse of market power and price-fixing that undermines the performance of the economy.

"South Africa's competitiveness and industrial performance require an efficient basic steel supplier industry. High levels of concentration together with collusion undermine our national goals," the minister said.

Over the past seven years, the competition authorities have focused on collusion and abuse of market dominance involving key input costs in the economy, such as steel-making, fertilizers, construction and telecommunications and well as important basic goods such as bread, poultry and flour.

"Our resolve is clear: we want to promote investment-led economic growth, not collusion-induced economic stagnation. South Africa is open for business, and the message we want to send is that we will act against conduct that damages competition and jobs," Patel said.

The government, he said, will not hesitate to act against any further abuse of market power in the steel industry should this be necessary.

Source : XINHUA