| Tue 10 Aug 2010, 11:44 | | THEE - The Competition Commission - Aveng settles mining roof bolts cartel with |
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JSE
THEE
THEE - The Competition Commission - Aveng settles mining roof bolts cartel with
a R21 million fine
Media Release
10 August 2010
Aveng settles mining roof bolts cartel with a R21 million fine
The Competition Commission has entered into a settlement agreement with Aveng
(Africa) Ltd, trading as Duraset ("Duraset") in which it admits that it took
part in the mining roof bolts cartel. Duraset has agreed to pay a penalty of R21
900 000 representing 5% of its 2008 annual turnover.
The agreement follows the Commission`s referral of its cartel activity findings
against Duraset, RSC Ekusasa Mining (Pty) Ltd (RSC), Dywidag-Systems
International (Pty) Ltd ("DSI") and Videx Wire Products (Pty) Ltd ("Videx") to
the Tribunal for adjudication on 30 September 2009, in which it asked the
Tribunal to levy an administrative penalty of 10% on the annual turnover of
three of the firms. The referral excluded RSC, a subsidiary of Murray & Roberts
Steel, which was granted conditional immunity following its leniency
application.
In terms of the settlement, Duraset admits that it was involved in collusive
tendering and entered into agreements, arrangements and understandings with RSC,
DSI and Videx to divide the markets.
It has further agreed to refrain from engaging in this conduct and to continue
with the implementation of a compliance programme that was developed and
implemented following a consent agreement that Aveng entered into with the
Commission in relation to its other subsidiary Infraset, which was involved in
collusion in the concrete pipes, culverts and manholes market to prevent further
contraventions of the Competition Act.
The Commission has filed an application for the confirmation of this settlement
agreement with the Tribunal.
This case was initiated following information received from RSC in a leniency
application on 26 September 2008. RSC was the first among the cartel members to
come forward and admit it had colluded with its competitors. Subsequently,
Duraset attempted to apply for leniency, but this was rejected since conditional
leniency had already been granted to RSC in respect of the conduct.
The Commission`s investigation revealed that the cartel may have started during
the 1990`s and was resuscitated around 2002 when DSI entered the market with
prices considered by its competitors as "exceptionally low and unsustainable".
This resulted in a price war, after which the respondents arranged to meet and
discuss ways to coordinate their conduct in the supply of mining roof bolts.
Over an extended period of time the respondents agreed not to sell to "each
other`s customers" and under the guise of an industry association, each member
was allocated 25% of market share. These cartel members had agreements to
allocate customers and products and also to collude on tenders until 2008.
Mining roof bolts are used to provide roof and wall support in underground mines
to prevent cave-ins and to keep a mine accessible over extended periods of time.
ENDS
Further Info:
Oupa Bodibe, Manager: Advocacy & Stakeholder Relations
012 394 3267/ 082 563 6970/ oupab@compcom.co.za
Molebogeng Taunyane, Coordinator: External Communications
012 394 3289/ 082 646 8663/ molebogengt@compcom.co.za
Date: 10/08/2010 11:44:06 Produced by the JSE SENS Department.
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