Anglos Scaw Steel to assist in steel cartel probe in South Africa

Saturday, 19 Jul 2008

South African mining Anglo American Plc said that its Scaw South Africa Ltd steel unit will assist antitrust regulators in a probe into alleged price fixing.

Anglo American in a statement said that Scaw was granted so called conditional leniency by the Competition Commission. That means the unit was offered immunity from prosecution in return for cooperating with the investigation.

The commission said that “A major producer of long steel products confirmed the existence of an alleged cartel for products including reinforcing bar.”

The commission said that on June 23 it was investigating 10 steel companies and the South African Iron and Steel Institute for possible price fixing. The investigation is separate from one in which ArcelorMittal South Africa Ltd. It said that Africa's biggest steelmaker was found guilty last year of excessive pricing.

According to the producer assisting in the investigation, Discussions and meetings took place between the parties where agreements were reached to fix prices, exchange price lists and fix discounts.

The regulator said that unfair prices may damp manufacturing activity in South Africa, as steel products are a major contributor to costs in industries such as construction.