Steel giant plans to invest R4.6bn

ARCELORMITTAL SA has undertaken to invest R4.6-billion on plants and equipment in the next five years as part of a settlement agreement it has reached with the Competition Commission.

This is in addition to the record R1.5-billion fine the steel maker‚ which supplies about 70% of the domestic market‚ has agreed to pay for its involvement in the long steel and scrap metals cartels.

However‚ the R4.6-billion investment has come with a caveat – ArcelorMittal said it was subject to it being affordable and feasible in the light

Corporate communication and branding manager Themba Sepotokele said the company planned to spend the money on expanding operations and improving efficiencies across its plants.

“To the extent that additional capacity is created‚ some further jobs may be created‚ but more importantly – to the extent that ArcelorMittal SA remains profitable and sustainable‚ jobs will be preserved‚” he said on Monday.

The commission’s announcement of the R1.5-billion fine – the biggest fine to be imposed on a of financial circumstances. single company – ended investigations against the steel maker that began in 2008.

ArcelorMittal said it had made provision for the R1.5-billion‚ to be paid over five annual instalments‚ of no less than R300-million as from next year. For the first 18 months‚ the administrative penalty of R1.5-billion would be interest fee‚ following which a 10.5% interest charge would be levied on the outstanding amount.

The competition watchdog launched the probe against ArcelorMittal SA and the entire industry following concerns about high and increasing steel prices‚ despite SA being a net exporter of the metal.

Other producers that were implicated during investigations into the steel cartel include Cisco (Cape Town Iron and Steel Works)‚ Scaw Metals‚ Cape Gate and Highveld Steel and Vanadium.

Spokesman for the competition watchdog Itumeleng Lesofe said on Monday prosecutions were pending against the other companies that were involved in cartel conduct and had not settled with the commission.

The Competition Tribunal still has to approve the commission’s recommendations.— BDLive