ArcelorMittal South Africa says allegations that it abused its market dominance in the purchase of iron ore from Assen Mine to acquire an equity stake in Manngwe Miing ,are not true.
Manngwe Mining has alleged an abuse of monopsony power by ArcelorMittal South Africa (AMSA) — an attempt by a dominant buyer to force ownership of a supplier out of the hands of its shareholders - but the steel producer says these claims are without merit.
A monopsony is a market dominated by a single powerful buyer — the mirror image of a monopoly, where a single seller dominates. AMSA was the sole buyer of the iron ore produced at Manngwe’s Assen Iron Ore Mine near Brits, in the North West.
Manngwe Mining CEO Mutheiwana Rambuwani said on Friday in a statement that AMSA used its monopsony position to withhold and ration purchase orders, and to make their resumption conditional on Manngwe surrendering equity in the business — pressure that ultimately forced the Assen operation to cease mining.
AMSA, in response to Business Report questions over the weekend, said its relationship Manngwe Mining “regrettably, became increasingly difficult over time due to a range of commercial and operational challenges,” including “inconsistent supply performance, quality concerns, pricing issues, governance instability and uncertainty regarding long-term supply sustainability.”
