Competition Tribunal finds Mittal guilty of charging excessive prices

CONSIDERING OPTIONS: Rick kreato, Mittal Steel south Africa's chief executive officer. Pic. Tyrone Arthur. 18/09/06. ©
CONSIDERING OPTIONS: Rick kreato, Mittal Steel south Africa's chief executive officer. Pic. Tyrone Arthur. 18/09/06. ©

Robert Laing

Robert Laing

Mittal charges excessive prices for its steel, the Competition Tribunal found yesterday. But the steel maker was let off the hook on the secondary charge that the company punished customers that rebelled by importing steel.

Bernard Swanepoel, chief executive officer of gold mining company Harmony, which along with Durban Roodepoort Deep and Macsteel complained to authorities that Mittal had abused a monopoly position, said the tribunal's findings made the four-year legal battle worthwhile.

"It's been a long haul, but knowing what the downstream market as a whole stood to gain from lower steel prices made the battle worthwhile. The little guys who didn't have market power or alternative supply markets suffered at the hands of Iscor and later from Mittal's unilateral, monopolistic beha-viour for many decades. We think today's decision will change the way some industries in South Africa will do business," Swanepoel said.

Mittal is now waiting to hear what fine or other penalties it will face. The tribunal said that it can impose wide- ranging remedies for Mittal's contravention of section 8(a) of the Competition Act. But it will postpone considering the remedies sought until it has heard further evidence.

Rick Reato, chief executive officer of Mittal Steel South Africa, said: "We currently are unable to comment further on the ruling until we have seen the reasons for the judgement. We believe however that we have a strong legal case and will be considering our legal options."

Local steel customers have griped for a long time that Mittal charges a factory next to one of its steel mills the same price as if it shipped its metal from China. Accusations that Mittal punished factories that imported steel by offering their competitors discounts was not upheld by the tribunal.

X