Three scrap metal recycling bodies have jointly called for an independent inquiry into all government policies affecting the sector, including the price preference system (PPS) for scrap metal and the export tax.
The appeal has been made by the Recycling Association of South Africa (RASA), the Metal Recyclers Association (MRA), and the Scrap Recycling Coalition (SRC) and follows a recent Competition Tribunal ruling in relation to price fixing in the scrap metal market.
The tribunal’s October 6 ruling confirmed the existence of a buyers’ cartel between 1998 and 2008 that involved Cape Gate, Scaw SA, ArcelorMittal South Africa (AMSA), and Columbus Stainless. While the other participants had either applied for corporate leniency or settled with the commission, Cape Gate had hitherto denied the allegation, but was found guilty by the tribunal this month.
In a statement signed by RASA CEO Nancy Strachan, MRA chairperson Quintin Starkey and SRC chairperson Mark Fine, the associations argue that the ruling points to a pattern of collusion that has artificially depressed prices and undermined the viability of metal recyclers.
They also argue that this harm is being perpetuated by prevailing government policies, specifically citing the PPS and the export tax, which they claim favours dominant buyers and forces recyclers to compete for sub-grade materials at unviable prices.
“We are not just asking for a review; we demand a thorough, transparent inquiry involving all stakeholders to investigate the origins of these policies, their implementation flaws, and any undue influence from cartel participants,” the statement reads.
It also urges the Presidency, the Department of Trade, Industry and Competition, the Competition Commission, and the International Trade Administration Commission to initiate the inquiry without delay, with public participation and binding recommendations.
An encrypted email ([email protected]) has also been launched to allow whistleblowers to provide anonymous information about ongoing unfair practices.
The intervention comes while AMSA is also seeking a review of the PPS and scrap export tax, which it claims has made it impossible for its integrated Newcastle mill to compete with competitors that are using scrap in electric arc furnaces to produce steel.
AMSA’s Newcastle operation in KwaZulu-Natal has been placed into care and maintenance, but discussions are said to be ongoing with government on ways to salvage the operation along with AMSA’s long-steel business.
