Johannesburg – Manngwe Mining has expressed concerns regarding what it describes as the exploitation of monopsony power by ArcelorMittal South Africa (AMSA).
The company claims that AMSA, the primary buyer of its iron ore, is attempting to “force the ownership of the operation away from its shareholders and community.”
Effectively, AMSA acts as the exclusive buyer for the iron ore produced at Manngwe’s Assen Iron Ore Mine.
Manngwe accuses AMSA of leveraging its monopsony power to restrict and manipulate purchase orders.
It is alleged that AMSA’s decision to resume purchases was contingent upon Manngwe giving up equity in the business, which ultimately resulted in the suspension of the Assen operation.
Manngwe Mining is a fully black-owned company with various mining interests, including the Assen Iron Ore Mine near Brits in the North West Province.
The company has confirmed that the dispute remains unresolved, with ongoing legal proceedings and further submissions expected before the Competition Tribunal this week.
According to Manngwe Mining, AMSA’s actions have compromised over a decade of investment, development, and community-focused progress, exploiting its position as the main buyer of the mine’s output.
“AMSA essentially represents our sole buyer — and it was this monopsony position that allowed them to act this way,” states Manngwe Mining CEO Mutheiwana Rambuwani.
“Making the resumption of orders dependent on our surrendering of equity has put tremendous pressure on the business.
“We consider this behavior as unfair and inconsistent with the spirit of the Competition Act and the protections it grants to suppliers — thus, we have approached the Tribunal.”
The company is seeking interim relief from the Competition Tribunal, with AMSA expected to submit its response this week.
Manngwe Mining contends that the behavior it is encountering — the use of monopsony power to extract equity — amounts to an abuse of a dominant position under the Competition Act 89 of 1998, and poses not only commercial unreasonableness but is also detrimental to the broader ecosystem relying on the mine’s continued operation.
“Our foremost concern is for those who depend on this enterprise — our employees, suppliers, shareholders, and the community,” explains Rambuwani.
“They have worked hard to build the Assen operation into its present success, investing their capital and labor into it.
“Their livelihoods are currently at risk, and we feel a responsibility to protect them.”
Manngwe Mining has also pointed out the reputational consequences of the ongoing conflict, emphasizing that AMSA’s actions have already created uncertainty among the workforce, families, and others whose livelihoods rely on the Assen operation.
This extends to suppliers and the nearby communities of Rasai and Kwaarikraal villages that have thrived alongside the mine for more than a decade.
“The uncertainty arising from this dispute has exerted considerable pressure on numerous stakeholders dependent on this operation — our workforce, suppliers, and community,” laments Rambuwani.
“They deserve clarity and fairness, yet they are the ones who bear the burden for a situation they did not create.”
Despite escalating tensions, the company emphasizes its commitment to constructive dialogue aimed at achieving a resolution that preserves the integrity of the enterprise.
“We have consistently valued our commercial relationship with AMSA, investing significantly to meet their specifications and supply needs over the years,” notes Rambuwani.
“We still believe a negotiated settlement is achievable — one that maintains Manngwe Mining’s Assen Iron Ore Mine under the ownership of its current shareholders while continuing to supply AMSA on equitable commercial terms, as we always have.”
Manngwe Mining remains dedicated to cooperating fully with the Competition Tribunal and all relevant authorities and stakeholders as this process develops.
The company aims to provide all necessary information demonstrating the potential detriment that could result from AMSA’s actions.
“Competition law is designed, in part, to ensure that a dominant buyer cannot transform a supplier’s hard work in building a valuable asset into a price for its survival,” concludes Rambuwani.
“We are confident in the strength of our position and believe a fair review of the facts will validate it.
“We will continue to engage in good faith, under conditions that keep the Assen mine under our control and protect the jobs it sustains, the opportunities it creates for our communities, and the suppliers who depend on it.”
AMSA has denied Manngwe Mining’s allegations of monopoly abuse, asserting that its actions were part of standard commercial negotiations and not coercive.
Primarily, Manngwe claims that AMSA attempted to coerce it into selling its R606 million Assen iron ore mine for only R1, yet AMSA refutes any allegations of dominance abuse, racial discrimination, or unlawful buyer power.
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The dispute is currently before the Competition Commission and Tribunal.
