Cape Gate challenges Competition Commission's scrap metal price-fixing investigation

Cape Gate, one of four scrap metal traders raided by the Competition Commission on Friday in a search-and-seizure operation, has said it will challenge the warrant and initiate urgent proceedings to set it aside, as the order was granted in its absence.

In response to the Commission conducting search-and-seizure operations at the premises of four scrap metal purchasing companies operating in Germiston, Nigel, Vanderbijlpark and Hammanskraal, Cape Gate said there was a clear obligation on the Commission to fully disclose all relevant facts to the court, and that it believes the Commission failed to make full disclosure as required.

“In fact, there was no need for a search operation, as Cape Gate has always been open and available to the Commission. We take compliance with all laws and regulations extremely seriously, including the Competition Act 89 of 1998,” said Dorothea Ziegenhagen, the CEO of Cape Gate. “We are confident that our business practices are fully compliant with competition law. We strongly deny any wrongdoing,” the group said.

Cape Gate said over the weekend that it has always cooperated and is currently fully cooperating with the Commission. In 2025, it made all requested information and documentation available.

This comes as the Commission said on Friday that it has reasonable grounds to suspect that Scaw South Africa (Scaw), Cape Gate, Shaurya Steel trading as Force Steels, and Unica Iron and Steel (Unica) have engaged in fixing the purchase price of shredded or processed scrap metal.

The Commission alleged that these firms made price adjustment announcements of the same amount for implementation at more or less the same time.

Competition Commissioner Doris Tshepe said the search-and-seizure operations are being conducted as part of an ongoing investigation into a complaint lodged by a third party in 2023 and a complaint initiated by the Commissioner in February 2026.

Tshepe said during the search, the Commission will seize documents and electronic data, which will be analysed together with other information gathered to determine whether these companies have contravened the Act. The companies under investigation operate as buyers of shredded or processed scrap metal, which they use in the production of long steel products.

“Scrap metal forms part of the industrial intermediary products sector, which is the Commission’s priority sector. Dismantling any alleged price-fixing cartel in the market will go a long way towards eliminating any existing artificial barriers to entry and creating a conducive environment for all firms — in particular small businesses and firms owned by historically disadvantaged persons — to enter and participate in the market,” Tshepe said.

Cape Gate said that, in relation to the 2025 Competition Tribunal decision regarding scrap purchasing during the period 2000 to 2008, it maintains its stance that the Tribunal’s judgment is incorrect and that there has been no contravention of the Competition Act.

“In this regard, Cape Gate has launched both review and appeal proceedings against the Tribunal’s decision, which are currently sub judice and will be heard in the Competition Appeal Court during the first quarter of 2026,” the group said.

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