ArcelorMittal’s South African unit has agreed to pay a 1.5 billion rand ($110 million) fine for colluding to fix steel prices, the competition watchdog said on Monday.

The Competition Commission launched an investigation in 2008 after concerns were raised that steel mills had been charging import parity prices, or prices that consumers would pay if they imported the commodity, since 2002.

The South African steel industry, which includes state-controlled Scaw Metals, produces enough steel to meet local demand.

The settlement, to be paid in five annual installments of no less than 300 million rand, and includes a year-long 10 percent cap in EBIT margin, will pile more pressure on a company facing falling demand, rising cheap imports and higher costs.

Shares in ArcelorMittal South Africa fell more than 80 percent in 2015, underscoring the scale of investor concern and the state of its operating environment.

By 0916 GMT, the stock was down 0.78 percent at 7.72 rand, reversing earlier gains of as much as 2 percent.

ArcelorMittal South Africa, which has not made a profit in half a decade, also agreed to 4.6 billion rand in capital expenditure over five years as part of the settlement, the Commission said.


“The penalty sends a strong message of deterrence and is an important milestone in the Commission’s enforcement against cartels,” Commissioner Tembinkosi Bonakele said.

(Reporting by Tiisetso Motsoeneng; Editing by James Macharia)