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Johannesburg - The Competition Commission said on Sunday that recycling business the Reclamation Group had agreed to pay an
"administrative penalty" of R146m for its involvement in
"collusion and price fixing" in the ferrous and non-ferrous scrap metal markets.
The competition authority said the fine - the largest settlement imposed by the commission to date - represented 6% of Reclamation's annual turnover in the affected markets.
The settlement has now been referred to the Competition Tribunal, which, following a public hearing, will issue an order confirming the agreement.
Reclamation is involved in the recycling of scrap metals, glass, rubber, plastic and other materials, and is a major collector and processor of non-ferrous and ferrous metal in South Africa.
The company was found to have contravened the Competition Act by
agreeing to fix prices with its competitors for the supply of ferrous metal and for the purchase of non-ferrous scrap metal.
It also entered into exclusive agreements and other arrangements with its competitors to divide markets by allocating territories and customers for the supply of ferrous and non-ferrous metals.
The sector's uncompetitive practices were uncovered during the course of an investigation into the merger of Reclamation and SA Metal and Machinery Co, and its associated company, Waste Control.
Reclamation filed the large merger application in October 2005, but in June 2006 the commission recommended the prohibition of the merger.
During the course of its investigation the commission found certain arrangements constituted market allocation and price fixing in contravention of the Competition Act.
In August 2006, the Competition Commission initiated a complaint against Reclamation, SA Metal and Machinery Co, National Scrap Metal (Cape Town) and Cape Town and Steel Work.
On August 7 2006, Reclamation filed a notice of abandonment of the merger.
The commission said its search of Reclamation's premises in July last was the biggest operation of its kind conducted by the commission since its inception with raids taking place simultaneously in the Durban, Port Elizabeth and Johannesburg.
Reclamation's settlement is also the largest of an administrative
penalty in both real and percentage terms.
The Competition Act allows for penalties of up to 10% of the business's annual turnover.
Reclamation is unlisted.
- I-Net Bridge