VANDERBIJLPARK – Steel industry leader Cape Gate is at the centre of a major pricefixing probe after the Competition Commission raided its premises and those of three other scrap metal buyers.
Authorities have swooped on four major scrap metal companies as part of a wider search and seizure operation at premises in Vanderbijlpark, Germiston, Nigel, and Hammanskraal.
The investigation targets industry heavyweights Scaw South Africa, Cape Gate, Force Steels, and Unica Iron and Steel.
The Commission suspects these firms have been co-ordinating the prices they pay for shredded or processed scrap metal.
This metal is essential for making long steel products used in construction and manufacturing.
According to Commission spokesperson Siyabulela Makunga, it is alleged that these firms have made price adjustment announcements of the same amount for implementation at more or less the same time.
This conduct may amount to fixing of prices and/or trading conditions in contravention of section 4(1)(b)(i) of the Competition Act 89 of 1998.
The raids are part of an ongoing investigation sparked by a third party in 2023 and a new complaint launched by the Commissioner in February.
Investigators are seizing documents and electronic data, which will be analysed together with other information gathered to determine whether these companies have contravened the Act.
Commissioner Doris Tshepe emphasised that the scrap metal industry is a top priority.
“Dismantling any alleged price-fixing cartel in the market will go a long way towards eliminating any artificial barriers to entry,” she said.
She added that stopping such practices helps smaller businesses and firms owned by disadvantaged individuals to enter and participate in the market.
In response to the raids, Cape Gate has issued a stinging denial. The company’s CEO, Dorothea Ziegenhagen, stated that they have always co-operated with the authorities and even provided all requested documents as recently as 2025.
“There was no need for a search operation,” the company said in a statement. Cape Gate has now launched urgent legal action to have the search warrants overturned, insisting their business practices are fully legal.
