Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
JOHANNESBURG, Dec 18 (Reuters) – ArcelorMittal South Africa, which has agreed to pay a 1.5 billion rand ($116.85 million) fine for colluding to fix steel prices in five instalments, will be allowed to pay the first of those in three parts, the steelmaker said on Monday.
The company, majority-owned by ArcelorMittal, said it had reached an agreement with South Africa’s Competition Commission to divide the first payment into three tranches of 100 million rand ($7.79 million) each.
“The Commission has taken into account the company’s financial position, resulting from the tough trading conditions in the global and local steel industries,” ArcelorMittal said.
The steelmaker has had to cut jobs and restructure to stem losses and has called for emergency steel tariffs to be imposed to protect the local industry against cheap imports.
The company agreed last year to pay a record 1.5 billion rand ($116.85 million) fine in five annual instalments of no less than 300 million rand each.
It has paid 100 million rand and will pay a second and third instalment of that size on April 1 and July 1, it said, before reverting to annual payments of at least 300 million, as agreed.
The Competition Commission also imposed a five year-long 10 percent cap on the company’s EBIT margin on domestic sales of flat steel products.
It launched an investigation in 2008 after concerns were raised that steel mills had been charging import parity prices, or prices that consumers would pay if they imported steel, since 2002.
($1 = 12.8373 rand)
(Reporting by Tanisha Heiberg; editing by Jason Neely)
