South African marginal miner Durban Roodepoort Deep (DRD) is set to continue, together with Harmony Gold Mining, its action against steel group Iscor to secure “fair” steel prices, the company said on Thursday.
Earlier this month, the Competition Commission threw out an appeal from DRD and Harmony, lodged last year, to investigate Iscor for monopolistic practices in respect of steel pricing.
The commission cited a lack of evidence as the reason for its action.
DRD and Harmony will take their complaints to the Competition Tribunal.
“On purely commercial grounds, there is sufficient reason for us to press on. A cursory investigation by any sufficiently interested and affected party shows that the steel price, in rand terms, has remained virtually flat for three years. Hard-pressed local consumers like us, over the same period, have had to accept steel price increases of around 50%,” DRD executive chairperson Mark Wellesley-Wood said.
“When one considers South Africa’s enormous reserves of iron ore and the long-established infrastructure that is here for efficient, cost-effective beneficiation, you have to realise there’s something wrong somewhere,” Wellesley-Wood added.
Both DRD and Harmony weren’t interested in reaching some special scheme of arrangement based on “if you have a problem, come and talk to us”, Wellesley-Wood said.
“Commercial considerations aside, there are ethical obligations that must be met. Like all players in the South African mining sector, we are under enormous pressure to ensure a sustainable future for all of our stakeholders,” he added.
“In this case, an apparent, inexplicable excessive return for one party must be investigated. We believe that ‘pain and gain’ must be shared more equitably and with transparency. It is crucial that non-transparent and discriminatory pricing be examined thoroughly by the tribunal,” Wellesley-Wood added.
DRD spends R150-million a year on steel and steel products, and even a 1% saving is worth having, he said. — I-Net Bridge