Steelmaker ArcelorMittal South Africa (AMSA) has been accused of abuse of dominance and alleged attempt to hijack a black-owned iron-ore mining company, Manngwe Mining. It is allegedly trying to strongarm the miner into selling its assets to the giant steelmaker for R1.
The allegations form part of a formal complaint lodged by Manngwe Mining with the Competition Commission, which argues that AMSA is using its dominant position as the sole domestic buyer of iron ore to exert pressure on the mining company.
The commission has confirmed receipt of the complaint.
“AMSA has engaged in exclusionary conduct, imposed anti-competitive conditions, exercised unlawful buyer power, and committed racial discrimination, all with the explicit purpose of forcing a 100% black-owned mining enterprise to surrender its R606-million asset for R1,” reads the letter.
Matodzi Nesongozwi, Manngwe Mining chief executive, said they had a buyer and supplier relationship, with AMSA being their only customer of iron ore from their Assen mine near Brits, which they bought from Kumba Iron Ore. They entered into a supply agreement on February 4.
Nesongozwi said the relationship turned sour after AMSA stopped purchasing their iron ore and introduced new terms that extended beyond a normal commercial arrangement, including seeking full equity in the mine and exerting influence over its operations, a charge AMSA has denied
“Because AMSA is the sole significant local buyer, Manngwe is heavily dependent on it for revenue, creating a power imbalance that lies at the heart of the current dispute,” said Nesongozwi.
According to the complaint seen by Sunday World, AMSA stopped purchasing iron ore from Manngwe in late 2024. Manngwe said resumption of trade with AMSA was made conditional on the transfer of its mining asset at a nominal value of R1, despite the mine being valued over R600-million.
The company contends that this amounted to economic coercion instead of a legitimate commercial negotiation, leaving it with no choice but to accept unfavourable terms or face financial collapse.
Nesongozwi said he signed the 2024 agreement under duress, saying the circumstances were highly pressured and not reflective of a fair bargaining process.
“Doctors had indicated that since I was medically unfit, I could not make such business decisions but I still had to sign the agreement because I was worried about the mine shutting down, but I was under duress.
“The shareholders also did not agree with the decision and after I got better, I also realised that ArcelorMittal is trying to take our business away and their CEO recently reached out to me trying to convince me to still go ahead with the sale of the mine.”
Due to AMSA withdrawing its support for Manngwe Mining, the company now faces the risk of liquidation.
He said Anglo American Zimele Mining Fund, which extended R40-million in loans during the exploration phase, was demanding repayment of outstanding debts, with a claim of about R7.8-million plus interest, which he said heightened the risk of its collapse.
By halting purchases, AMSA is accused of effectively shutting the miner out of the market.
In response, Tami Didiza, senior manager for stakeholder management and communications at AMSA, denied allegations they were trying to hijack the mine. He said they could not comment in detail on the complaint lodged with the Competition Commission but rejected claims of anti-competitive behaviour, price discrimination and racial discrimination.
Didiza said AMSA’s procurement decisions were based on commercial, operational and technical considerations, including pricing, quality, reliability of supply and sustainability.
“It is important to state clearly that ArcelorMittal South Africa has a long-standing record of supporting and procuring from black-owned and black-managed suppliers.”
The steelmaker further denied suggestion of coercion in relation to Manngwe. Didiza said the commercial terms had been negotiated over time and that engagements between the parties continued after the agreement was signed.
He said AMSA had provided financial, technical and operational support to Manngwe over years including loans and payment arrangement. He insisted that the relationship rather deteriorated due to commercial and operational challenges such as inconsistent supply, quality concerns and pricing issues.
“The closure of any mining operation and the impact on employees and communities is regrettable. ArcelorMittal South Africa fully appreciates the seriousness of job losses in the current economic environment.
“However, ArcelorMittal South Africa cannot continue procurement arrangements indefinitely where supply relationships are commercially unsustainable or operationally unreliable,” said Didiza.
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- ArcelorMittal South Africa (AMSA) is accused of abusing its dominant position to pressure black-owned Manngwe Mining into selling its mine, valued at R606 million, for R1.
- Manngwe Mining filed a complaint with the Competition Commission, alleging AMSA stopped purchasing iron ore unless the mine was transferred at a nominal price, amounting to economic coercion.
- AMSA is the sole domestic buyer of Manngwe’s iron ore, creating a power imbalance; AMSA denies allegations of anti-competitive behavior, racial discrimination, and coercion.
- Manngwe faces financial collapse and liquidation risk due to halted purchases and outstanding loan repayments, with AMSA’s withdrawal of support cited as a key factor.
- AMSA claims procurement decisions are commercial and operational and denies attempts to hijack or unfairly influence Manngwe, emphasizing past support and ongoing negotiations.
