Steel Pricing in South Africa: Competition history and current concerns

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History of Iscor/AMSA (cont.)2001 – 2004: LNM introduced as an international partner,introduces efficiency improvements, and increases shareholding.2004: LNM acquires majority shareholding in Iscor.2006: After lengthy negotiations with DTI and in the context of theHarmony Mittal case, AMSA introduced a pricing system based onan international basket of prices.2009 – 2010: AMSA fails to convert its mineral rights resulting in adispute over iron ore prices to AMSA by Kumba. AMSA thenimplements a price surcharge to customers deposited into anescrow account should AMSA lose the dispute.
LNM acquisition of Iscor• LMN needed to notify the Competition Commission of a mergerwith Iscor in 2004 because it planned to increase itsshareholding in Iscor to above 50% (was 47.23%). The Tribunalapproved this unconditionally because it would not give rise toany substantial lessening of competition.• At this time the DTI had an agreement with LNM that it would:- Conclude a steel pricing agreement with the DTI that would replaceexisting import parity pricing (IPP) with a sustainable, developmentalpricing model that would raise the volumes of downstream steelbeneficiated in South Africa for both the export and domestic market incompliance with WTO (World Trade Organisation) Rules for the SouthAfrican Steel industry- Increase investment in liquid steel capacity from 6 million tons (Mt) to 9Mt(including expansion of Saldanha Steel capacity to 2Mt from 1.2Mt).
Page 1 and 2: Steel Pricing in South Africa:Compe
Page 3: History of Iscor/AMSA1927: Governme
Page 7 and 8: ContentsHistory of Iscor/AMSAIssues
Page 9 and 10: IPP pricing by AMSAIPP pricing by A
Page 11 and 12: SA export volumesExports are not in
Page 13 and 14: Prerequisites• Excessive pricing
Page 15 and 16: Appeal of Tribunal decision• Duri
Page 17 and 18: CAC decision• While the CAC set t
Page 19 and 20: Comparator pricing• Comparing AMS
Page 21 and 22: AMSA input cost advantages• The a
Page 23 and 24: AMSA expansions• 2006 AMSA strate
Page 25 and 26: AMSA profitability• Profits slump
Page 27 and 28: AMSA’s s basket pricing• AMSA i
Page 29: Current steel cases at the CCAbuseC

Steel Pricing in South Africa: Competition history and current concerns

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