In the eye of storm over his $22.7 billion takeover bid for Arcelor, NRI steel tycoon Lakshmi Mittal faced fresh charges of "excessive pricing" policy over the sale of steel to the local industry in South Africa.
Gold companies Harmony and DRD Gold have complained to the competition tribunal against Mittal steel, which took over South Africa's steel corporation, ISCOR, a few years ago.
The two gold companies have told the tribunal that Mittal Steel's pricing, based on import-parity pricing, is excessive and to the detriment of consumers. Import-parity pricing includes hypothetical charges for transport and duties even though goods are produced locally.
The two companies claim that Mittal has substantial excess capacity in South Africa and exports a higher proportion of its output than any other global steel producer. They said Mittal's high pricing policy is due primarily to its dominance of the local steel market.
Mittal Steel has argued that it was forced to sell steel to local consumers at an export-related pricing policy.
Mittal's senior counsel, Chris Loxton, said the company's financial figures would look grim if it depreciated its assets on economic principles rather than accounting ones. Mittal's additional investment was aimed at removing bottlenecks and not at adding capacity.
The tribunal hearing continues on Thursday.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
