Earlier this month, the Competition Commission threw out an appeal from DRD and Harmony, lodged last year, to investigate Iscor for monopolistic practices in respect of steel pricing. The Commission cited lack of evidence as the reason for its action.
An unfazed Wellesley-Wood said that DRD, with Harmony, would now take its complaints to the Competition Tribunal.
“On purely commercial grounds, there is sufficient reason for us to press on. A cursory investigation by any sufficiently interested and affected party shows that the steel price, in Rand terms, has remained virtually flat for three years. Hard-pressed local consumers like us, over the same period, have had to accept steel price increases of around 50%.
“When one considers South Africa’s enormous reserves of iron ore and the long-established infrastructure there is here for efficient, cost-effective beneficiation, you have to realize there’s something wrong somewhere.”
DRD, like Harmony, “wasn’t interested” in reaching some “special scheme of arrangement” based on the “if you have a problem, come and talk to us” kind of response received thus far from Iscor, Wellesley-Wood said.
“Commercial considerations aside, there is an ethical obligation that must be met. Like all players in the South African mining sector, we are under enormous pressure to ensure a sustainable future for all of our stakeholders.
“In this case, an apparent, inexplicable excessive return for one party must be investigated. We believe that ‘pain and gain’ must be shared more equitably and with transparency. It is crucial that nontransparent and discriminatory pricing be examined thoroughly by the Tribunal.
“DRD spends R150 million a year on steel and steel products, and even a 1% saving is worth having.”
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DRD has primary listings on the Johannesburg (JSE:DRD) and Australian (ASX:DRD) stock exchanges and secondary listings on NASDAQ (DROOY), the London Stock Exchange and the Paris and Brussels Bourses. Its shares are also traded on the regulated unofficial market of the Frankfurt Stock Exchange
and the Berlin OTC Market.
For more information, please visit www.drd.co.za or www.durbans.com
Cautionary note to US investors: the United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use the term "resources" (which includes "measured", "indicated", and "inferred") in our media releases, which the SEC guidelines strictly prohibit us from including in our filing with the SEC. US investors are urged to consider closely the disclosure in our Form 20-F, File No. 0-28800, available from us at 45 Empire Road, Parktown, Johannesburg, 2193, South Africa. You can also obtain this form from the SEC website at https://www.sec.gov/edgar.shtml
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