The ArcelorMittal South Africa (AMSA) cartel penalty was a landmark in South African competition enforcement — the largest fine ever imposed on a single company under the Competition Act.
AMSA, South Africa's dominant steel producer, operated two interlocking cartels:
**The Long Steel Cartel:** AMSA conspired with CISCO (Cape Town Iron and Steel Works), Scaw Metals, and Cape Gate to fix prices and allocate customers for long steel products. The cartel was coordinated through the South African Iron and Steel Institute (SAISI), using its industry meetings as cover for anti-competitive agreements. The companies agreed on price increases and divided customers among themselves, eliminating competition in a market essential to construction, infrastructure, and manufacturing.
**The Scrap Metal Buyers' Cartel:** AMSA, Columbus Steel (now part of AMSA), Cape Gate, and Scaw Metals coordinated their purchasing of scrap metal, depressing prices paid to scrap dealers and effectively stealing from suppliers.
The impact was felt across the South African economy. Steel is an input to virtually every infrastructure project — roads, bridges, buildings, power stations, railways. Inflated steel prices meant inflated infrastructure costs for government and the private sector alike. During the very period South Africa was investing heavily in infrastructure (World Cup stadiums, Gautrain, Eskom power stations), the steel cartel was extracting a corruption premium on every beam and reinforcing bar.
The Competition Tribunal approved a consent order in March 2016 imposing: - A R1.5 billion penalty (the largest single-company fine in SA competition history) - A 5-year EBIT margin cap of 10% on flat steel products - R4.64 billion in committed capital expenditure - Cooperation with ongoing investigations into other cartel conduct
The fine, while record-breaking, represented a fraction of the excess profits extracted during the years of cartel operation. AMSA's market dominance meant the cartel distorted pricing across the entire South African steel value chain.