JOHANNESBURG – Africa’s largest steelmaker ArcelorMittal South Africa could face a fine of more than 3 billion randfor price fixing, South Africa’s competition regulator said on Monday.
South Africa’s Competition Commission has asked the country’s competition court to penalise ArcelorMittal and smaller competitor Evraz Highveld Steel and Vanadium up to 10 percent of their annual turnover for collusion.
ArcelorMittal’s turnover for 2011 was 31.5 billion rand while Highveld reported a turnover of 5.5 billion rand for the year to end December 2011.
“Evidence before the commission indicates that the steel producers engaged in concerted practices or had understandings that Highveld would follow Mittal’s lead on the pricing mechanism and changes in pricing, including discounts and transport tariffs,” the regulator said.
The recommendation to the competition court comes four years after a complaint was filed with the authorities alleging that Mittal and Highveld adjusted their prices for steel products around the same time and with similar percentage increases.
ArcelorMittal spokesman Themba Hlengani said that the company would comment after consulting with its lawyers.
Shares of ArcelorMittal dropped more than 4.4 percent on Monday to 53.48 rand by 1150 GMT, underperforming the JSE’s All Share index, which was 0.42 percent up on the day.
ArcelorMittal’s shares were also hurt by news that it had been excluded from the South African government’s preferential procurement programme, which is designed to benefit local manufacturers, and a downgrading by Barclays Capital.