A South African tribunal is hearing a case against the biggest steel producer in Africa, Mittal Steel, following complaints of overpricing by two gold mining companies.
The Competition Tribunal started hearing the case brought by Harmony Gold and Durban Roodepoort Deep Gold on Wednesday, tribunal spokesperson Jane Sussens said on Thursday.
The two gold mining companies, which purchase steel for use in mining equipment, are appealing to the tribunal to reconsider the case following a first unsuccessful complaint in 2004.
Harmony Gold spokesperson Philip Kotze said that although Mittal Steel produced steel locally, it charged international prices, factoring in costs such as transport and taxes.
“It is cheaper for us to buy steel in Papua New Guinea than it is to buy it here in South Africa,” Kotze told Agence France-Presse.
The case could set a precedent for other businesses with the same practice of claiming costs from local buyers even though they produce locally, he added.
Mittal Steel argues that prices paid by South African consumers are linked to the lowest international price for the product and compare favourably with domestic prices charged by international manufacturers.
The tribunal has set aside March 15 to April 12 to hear the case.
Mittal Steel South Africa is the biggest steel producer in Africa, producing 7,1-million tonnes of liquid steel a year.
Harmony Gold, the world’s sixth-biggest gold producer, and Durban Roodepoort Deep, a local gold miner based west of Johannesburg, unsuccessfully lodged a similiar complaint against Mittal Steel SA in January 2004.
The Competition Commission, which decides whether a case is strong enough to be referred to the tribunal, then dismissed their complaints as unfounded. – AFP