Steel maker faces probe over pricing

A UNIT of the world's largest steel maker, ArcelorMittal South Africa, faces a possible investigation by the competition authorities after fruit canners complained about excessive tinplate prices, the company said yesterday.

A UNIT of the world's largest steel maker, ArcelorMittal South Africa, faces a possible investigation by the competition authorities after fruit canners complained about excessive tinplate prices, the company said yesterday.

Chief executive Nonkululeko Nyembezi-Heita said the South African Fruit and Vegetable Canners Association had lodged a complaint with the Competition Commission after the company raised tinplate prices in its first quarter.

"We raised tinplate pricing by 70 percent ... and the Canners Association raised a complaint with the Competition Commission in relation to that," Nyembezi-Heita told reporters.

She said ArcelorMittal had yet to receive full details about the complaint since the commission had not formally raised the issue with the company.

ArcelorMittal already faces the prospect of a fine in a separate case after the competition authority said last month the company could be fined 10 percent of its annual revenue and exports for fixing prices with other companies.

The company also settled a pricing dispute with Harmony Gold and DRDGOLD in September.

ArcelorMittal reduced prices for tinplate by between 26 percent and 30 percent last month, citing a stronger rand to the US dollar.

The firm has said it expects demand this year to be boosted by a rise in infrastructure projects in Africa and by deliveries to power stations being built by Eskom.

Nyembezi-Heita said Eskom would need to raise power supply to South African steel producers in 2010 since the steel market was set to rebound.

"We can't continue to have (power supply) uncertainty hanging over our heads," Nyembezi-Heita said. - Reuters

X